- Here come the rolling blackouts: Obama takes on power plant emissions as part of climate plan (Reuters)
- Walking Back Bernanke Wished on Too Much Information (BBG)
- As previewed last week: Bridgewater “All Weather” is Mostly Cloudy, down 8% YTD (Reuters)
- U.S. Said to Explore Possible China Role in Snowden Leaks (BBG)
- Coeure Says No Doubt ECB Loose Monetary Policy Exit Distant (Bloomberg)… so a “recovery”, but not at all
- U.S. steps up pressure on Russia as Snowden stays free (Reuters)
- Texas’ Next Big Oil Rush: New Pipelines Ferrying Landlocked Crude Expected to Boost Gulf Coast Refiners (WSJ)
- Singapore Offsets Bankers as Vacancies Fall (BBG)
- Asian Stocks Fall as China Sinks Deeper Into Bear Market (BBG), European Stocks Rally With Bonds as Metals Advance (BBG)
- Qatar emir hands power to son, no word on prime minister (Reuters)
- Toyota President Delivers Highest Returns for Lowest Pay (BBG)
Overnight Media Digest
WSJ
* The U.S. Supreme Court avoided a sweeping ruling on affirmative action in a closely watched case involving the University of Texas, sending the case back to a lower court for review.
* Students attending charter schools posted slightly higher learning gains overall in reading than their peers in traditional public schools and about the same gains in math, but the results varied drastically by state.
* The recession ended four years ago, and the job market is recovering. But for many job seekers, it hasn’t felt like much of a recovery.
* The rout in the credit markets has gotten so messy some investors are having trouble finding people willing to buy what they are selling. From municipal bonds to corporate debt to mortgage-backed securities, prices fell sharply again Monday, extending big declines that began last week.
* Bridgewater Associates, which built a $150 billion hedge-fund empire with the promise of strong performance even in turbulent markets, is suffering from the market’s recent convulsions.
* New pipelines are beginning to carry a glut of domestic crude from the middle of the country to Texas’ Gulf Coast, boosting the fortunes of the area’s big refineries.
* The sharp weakening of the South African rand spells more bad news for precious-metal investors, who already are reeling from the fall in gold prices.
* John Hammergren, current chairman and CEO of drug distributor McKesson, would have received a record pension benefit of $159 million in a lump-sum payment had he voluntarily departed on March 31.
* The co-founder of Specialty Medical Supplies has been held since Friday in his factory on the outskirts of Beijing, he said, as about 80 employees are refusing to let him go until they get severance packages.
* Oracle and Microsoft agreed to allow pieces of Oracle’s software more closely mesh with Microsoft’s software and online services in a nod to their role in customers’ Web-accessed “cloud services.”
* Angry Birds maker Rovio said its U.S.-based head of strategic partnerships, Andrew Stalbow, has decided to leave the company, marking the latest in a string of high-level management changes at the company.
* KKR has agreed to buy clinical-research firm PRA International in a deal that shows private equity’s ongoing interest in research-for-hire firms that cater to drug developers.
FT
Silvio Berlusconi was handed a seven-year jail sentence and banned from holding public office for life on Monday for abuse of office and paying for sex with a minor, further complicating relations between the two main parties in Italy’s fragile left-right government.
Spanish oil major Repsol SA is under increasing pressure from Catalan savings bank La Caixa, its largest shareholder, and Pemex, the Mexican state oil group and number-three investor, to accept a non-cash compensation offer from Argentina over the expropriation of its majority stake in energy firm YPF, several people close to the talks in Spain and Argentina said.
Dublin is facing fresh calls for a full inquiry into the collapse of Ireland’s financial system on Monday, after recordings of talks between Anglo Irish Bank executives about a bailout were revealed. The recordings suggest the bank deliberately misled regulators as it sought help during the financial crisis.
A $4.7 billion bid by the founders of Eurasian Natural Resources Corporation to buy out the Kazakh miner has gained the support of the board of its largest shareholder Kazakhmys Plc, even as an independent committee set up by the company said it could not recommend their new offer.
Vodafone Group Plc has agreed to buy Germany’s largest cable operator Kabel Deutschland Holding AG for 7.7 billion euros ($10 billion), which will turn the mobile operator into a combined TV, internet and telecoms group with more customers and higher margins.
Insurers have warned that the speed at which oceans are warming increasingly around the world is threatening their ability to sell affordable policies.
NYT
* A warning from the central bank against excessive lending worried investors overseas and brought fears of economic slowdown in China. The People’s Bank of China, the central bank, let the world know on Monday that it was putting the nation’s banks on notice: the loose money and the speculation it fed had to stop.
* In two decisions issued on Monday, the Supreme Court effectively made it harder for workers to prove that they had suffered employment discrimination. One ruling narrows the definition of what constitutes a supervisor in racial and sexual harassment cases, while the other adopts a tougher standard for workers to prove that they had faced illegal retaliation for complaining about employment discrimination.
* The Supreme Court ruled on Monday that generic drug manufacturers could not be sued by patients who claim that the drugs they took were defectively designed. The decision is a significant victory for the generic drug industry, but further narrows the recourse for people who are injured by such drugs.
* The news on Monday that Weil, Gotshal & Manges, among the nation’s most prestigious and profitable law firms, was laying off a large number of lawyers and support staff while also reducing the pay of some of its partners, sent shock waves through the industry and underscored the financial difficulties facing the legal profession.
* Courts must take a skeptical look at affirmative-action programs at public colleges and universities, the Supreme Court ruled Monday, in a decision that is likely to set off a wave of challenges to race-conscious admissions policies nationwide.
* Richard Baker, a shopping mall developer who emerged as a major player in the department store business with his purchases of Lord & Taylor and Hudson’s Bay, is now exploring a bid for Saks Inc, according to a person briefed on the matter.
* Warner Brothers on Monday announced a new leadership team for its film division while informing the staff that Jeff Robinov was leaving as the motion picture group’s president. Combined with a shake-up at its television unit, the moves greatly concentrate power at Hollywood’s largest studio in the hands of one executive.
* A federal appeals court has upheld the conviction of Raj Rajaratnam, the former hedge fund manager who was charged with orchestrating a vast insider trading conspiracy.
* Federal regulators are poised to sue Jon Corzine over the collapse of MF Global and the brokerage firm’s misuse of customer money during its final days, a blowup that rattled Wall Street and cast a spotlight on Corzine, the former New Jersey governor who ran the firm until its bankruptcy in 2011.
* Two of Dell Inc’s biggest outside investors on Monday laid out the most comprehensive defense of their plan for the company to date, while attacking the company’s planned $24.4 billion sale to Michael Dell and the investment firm Silver Lake.
Canada
THE GLOBE AND MAIL
* Weeks before rising floodwaters devastated Calgary and other municipalities along the Bow River, a hint of the impending disaster was apparent in data from a pair of NASA satellites. Observations by the Gravity Recovery and Climate Experiment show groundwater in the region has been at progressively higher levels than average – leaving the land with little extra capacity to take up additional water coming in from rainfall and melting snow.
* The Canadian government, trying to balance its books, is cracking down on tax evasion by forcing taxpayers to reveal more details of foreign holdings. National Revenue Minister Gail Shea will unveil new reporting requirements Tuesday that will apply to taxpayers with more than C$100,000 ($95,000) of offshore assets.
* Seven Conservative MPs are seeking a combined C$355,907 from a group of voters who went to court and lost their bid to overturn election results in their federal ridings because of misleading robocalls. A document recently filed in Federal Court says the Tories are asking for a “modest fixed amount” in legal fees plus disbursements.
Reports in the business section:
* Barrick Gold Corp plans to overhaul its board of directors in the wake of a backlash from powerful shareholders. Two of Barrick’s independent directors, Donald Carty and Robert Franklin, recently met or telephoned officials from eight major Canadian pension funds that spearheaded a revolt by shareholders complaining about lavish compensation practices.
* Ernst & Young LLP is facing allegations from the Ontario Securities Commission that it failed to properly audit the books of a small Chinese athletic-shoe manufacturer Zungui Haixi Corp.()
* Estimates of the size of a pipeline spill in northern Alberta have grown dramatically, causing concern among area aboriginals. Penn West Petroleum says between 400,000 and 600,000 litres of salty waste water escaped from the pipeline in addition to 5,000 litres of oil initially reported.
NATIONAL POST
* Alberta is handing out pre-loaded debit cards to displaced people and pledging C$1 billion in reconstruction cash to affected communities after the worst flooding in the province’s history.
* Immigration authorities are concerned that Iranians with “sinister motives” may enter Canada along with the flow of undocumented refugees, according to a declassified government report obtained by the National Post. The Canada Border Services Agency intelligence report said 19 Iranian nationals, most of whom had arrived in the country without legitimate travel documents, had been found “inadmissible” on security grounds since 2008.
FINANCIAL POST
* The worst flooding in Alberta’s history could knock C$2 billion off the Canadian economy in June, according to BMO Capital Markets.
* The Ontario government is investigating a Toronto-based web development bootcamp that it believes has been operating as an unregistered school – a violation of the Private Career Colleges Act, 2005 – leaving its founders no choice but to temporarily shut the program down
China
CHINA SECURITIES JOURNAL
- The London Metal Exchange is considering yuan settlement for transactions at its exchange, according to an official at Hong Kong stock exchange.
SECURITIES TIMES
- China’s Ministry of Land and Resources and National Energy Administration are working on an industrial policy for shale gas and plan to invite tenders for projects, an official said.
SHANGHAI SECURITIES NEWS
- The liquidity squeeze in China’s interbank market is leading to large-scale redemptions by investors in money-market mutual funds, forcing fund managers to sell bonds at steep discounts to meet redemption demand.
SHANGHAI DAILY
- Excessive use of toxic pesticides in traditional Chinese herb farming is endangering health and the environment, according to a report by the campaign group Greenpeace.
PEOPLE’S DAILY
- A bailout of the stock market is not beneficial to the development of a sound capital market, although some analysts are suggesting the China Securities Regulatory Commission and the People’s Bank of China should intervene, the newspaper said in an editorial.
7:00 AM Fly On The Wall Market Snapshot
ANALYST RESEARCH
Upgrades
CEMEX (CX) upgraded to Overweight from Equal Weight at Morgan Stanley
CME Group (CME) upgraded to Neutral from Underweight at JPMorgan
Hercules Offshore (HERO) upgraded to Strong Buy from Buy at ISI Group
Hittite Microwave (HITT) upgraded to Neutral from Sell at Goldman
Kinder Morgan Energy (KMP) upgraded to Buy from Neutral at BofA/Merrill
Marvell (MRVL) upgraded to Buy from Hold at Brean Capital
Royal Dutch (RDS.A) upgraded to Neutral from Underperform at Exane BNP Paribas
TE Connectivity (TEL) upgraded to Conviction Buy from Buy at Goldman
Valero Energy (VLO) upgraded to Neutral from Sell at Goldman
Waters (WAT) upgraded to Buy from Neutral at Goldman
Downgrades
Agilent (A) downgraded to Neutral from Buy at Goldman
Allergan (AGN) downgraded to Market Perform from Outperform at Wells Fargo
American Vanguard (AVD) downgraded to Neutral from Overweight at Piper Jaffray
Demand Media (DMD) downgraded to Hold from Buy at Stifel
Demand Media (DMD) downgraded to Market Perform from Outperform at JMP Securities
Genomic Health (GHDX) downgraded to Sell from Neutral at Goldman
IPC The Hospitalist Co. (IPCM) downgraded to Neutral from Overweight at Piper Jaffray
Keynote Systems (KEYN) downgraded to Neutral from Buy at B. Riley
Melco Crown (MPEL) downgraded to Hold from Buy at Deutsche Bank
Pan American Silver (PAAS) downgraded to Market Perform from Outperform at Cowen
QIWI (QIWI) downgraded to Neutral from Overweight at JPMorgan
Sunoco Logistics (SXL) downgraded to Neutral from Buy at BofA/Merrill
Western Gas Partners (WES) downgraded to Neutral from Buy at BofA/Merrill
Initiations
Becton Dickinson (BDX) initiated with a Buy at ISI Group
Blackhawk (HAWK) initiated with a Buy at Jefferies
Clovis (CLVS) initiated with a Buy at Mizuho
Encore Wire (WIRE) initiated with a Neutral at DA Davidson
Epizyme (EPZM) initiated with a Buy at Citigroup
Francesca’s (FRAN) initiated with an Outperform at William Blair
Jarden (JAH) initiated with a Neutral at Goldman
Kamada (KMDA) initiated with a Buy at Jefferies
Kamada (KMDA) initiated with an Outperform at Oppenheimer
Liberty Global (LBTYA) initiated with an Outperform at Macquarie
Magellan Health (MGLN) initiated with a Hold at Jefferies
Mast Therapeutics (MSTX) initiated with an Overweight at Piper Jaffray
Merrimack (MACK) initiated with a Buy at Mizuho
Michael Kors (KORS) initiated with a Buy at Deutsche Bank
NCI Building Systems (NCS) initiated with a Neutral at DA Davidson
Newell Rubbermaid (NWL) initiated with a Neutral at Goldman
Nike (NKE) initiated with a Buy at Deutsche Bank
Ralph Lauren (RL) initiated with a Buy at Deutsche Bank
Synthetic Biologics (SYN) initiated with a Buy at Ascendiant
Tesaro (TSRO) initiated with a Buy at Mizuho
Under Armour (UA) initiated with a Hold at Deutsche Bank
VF Corp. (VFC) initiated with a Buy at Deutsche Bank
William Lyon Homes (WLH) initiated with a Buy at Citigroup
William Lyon Homes (WLH) initiated with a Neutral at JPMorgan
William Lyon Homes (WLH) initiated with an Outperform at Credit Suisse
lululemon (LULU) initiated with a Hold at Deutsche Bank
HOT STOCKS
Meade Instruments (MEAD) said considering $3.65/share tender offer from
MIT Capital subsidiary VictoryOne
Cimarex Energy (XEC) announced joint development agreement with Chevron (CVX)
Demand Media (DMD) acquired Society6 for $94M in cash and common stock
Polypore (PPO) to divest Microporous assets following Supreme Court decision
Bascom filed patent infringement suit against salesforce.com (CRM)
EARNINGS
Companies that beat consensus earnings expectations last night and today include:
Mitel (MITL)
Companies that matched consensus earnings expectations include:
Sonic (SONC)
NEWSPAPERS/WEBSITES
- As President Obama plans a trip to Africa, U.S. companies such as GE (GE), GM (GM) and Procter & Gamble (PG) are expanding in the long-neglected frontier market of Africa, the Wall Street Journal reports
- Amazon (AMZN) has made itself known as one of the most formidable competitors in business, but after getting into video streaming, it has yet to unseat Netflix (NFLX) as king of the hill, the Wall Street Journal reports
- Two top Fed officials–Minneapolis Fed President Kocherlakota and Dallas’ Richard Fisher– downplayed the notion of an imminent end to monetary stimulus and said the market reaction was not yet cause for concern, Reuters reports
- The Financial Stability Board, which sets rules for global banks, will set up a taskforce to look at reform of Libor after a scandal in which three banks were fined for rigging the global interest rate benchmark, Reuters reports
- Dish Network (DISH) Chairman Charlie Ergen may have one last shot at being a hunter before he’s forced to turn his company into prey, with T-Mobile US (TMUS) as his last shot at buying a national wireless carrier, Bloomberg reports
- Google (GOOG) can’t be forced to remove material from its search engine that was legally posted on other websites, an adviser to the EU’s top court said in a case that may set boundaries between free speech and data-protection rights, Bloomberg reports
SYNDICATE
Flotek (FTK) files to sell 3.28M shares of common stock for holders
Investors Real Estate (IRET) files to sell 927,626 common shares
Mitek Systems (MITK) files to sell common stock
    
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