- ECB to decide on bond-buying plan to revive euro zone (Reuters)
- Draghi Is Pushing Boundaries of Euro Region with QE Program (BBG)
- Investors Wonder Whether ECB Will Do Enough (WSJ)
- Treasuries Drop With Bunds Before ECB; U.S. Futures Rise (BBG)
- European shares hit seven-year high (Reuters)
- At least eight civilians killed in shelling of Ukrainian trolleybus (Reuters), both sides blame each other
- OPEC Will Blink First in Battle With Shale Drillers, Poll Shows (BBG)
- China Injects $8 Billion Into Banking System (WSJ)
- New York says Barclays not cooperating in 'dark pool' probe (Reuters)
- Revenge of Disaffected Europe Risks Crisis Sparked in Greece (BBG)
- Regulators Boost Margin Requirements on FX Trades (WSJ)
- Disenchanted militants in South Asia eye Islamic State with envy (Reuters)
- Obama visits GOP strongholds of Idaho, Kansas (AP)
- Google to Sell Wireless Service in Deals With Sprint, T-Mobile (WSJ)
- Hillary Clinton declines to take position on Keystone (AP)
- Houthis welcome Yemeni president's concessions but gunmen remain (Reuters)
- S&P Lowered Standards on Ratings, SEC Says (WSJ)
Overnight Media Digest
WSJ
* A proposal from the ECB's executive board calls for bond purchases of roughly 50 billion euros ($57.96 billion) a month that would last for a minimum of one year, according to people familiar with the matter. (http://on.wsj.com/1CAWz4k)
* Google Inc is preparing to sell wireless service directly to consumers after striking deals with Sprint Corp and T-Mobile US Inc, a move likely to prod the wireless industry to cut prices and improve speeds. (http://on.wsj.com/1zxLgwn)
* KKR & Co LP refunded money to investors in some of its buyout funds after regulators found it overcharged them, marking one of the highest-profile results yet of regulators' increased scrutiny of the private-equity business. (http://on.wsj.com/1uwfmil)
* New Jersey Governor Chris Christie is bringing in an emergency manager to take over the day-to-day operations and troubled finances of Atlantic City, an unprecedented extension of state control over a New Jersey municipality. The Republican governor is expected to announce Thursday that he is hiring Kevin Lavin, a corporate-finance and business-restructuring lawyer who most recently worked for FTI Consulting Inc in New York, according to a senior Christie administration official familiar with the matter. (http://on.wsj.com/1ChOUtL)
* New York state's top prosecutor raised the pressure on Barclays Plc on Wednesday, alleging the bank hasn't cooperated with an investigation into the activity of high-speed traders in its "dark pool" and naming specific employees who allegedly were involved in wrongdoing. (http://on.wsj.com/1Bgpnzr)
* Regulators took steps to address steep losses suffered by traders and brokers in the wake of last week's unexpected surge in the Swiss franc, moving to temporarily restrict the amount of borrowed money, or leverage, used by foreign-currency traders. (http://on.wsj.com/1GyVgsW)
* The prolonged slide in oil prices is increasingly scaring investors in regional banks, even as executives caution that it is too early to tell the impact of the drop. (http://on.wsj.com/1JjgIOJ)
* Standard & Poor's Ratings Services agreed to pay nearly $80 million to resolve an investigation by the Securities and Exchange Commission and two states into its mortgage-backed securities. (http://on.wsj.com/1ChP6sZ)
* Procter & Gamble Co has broadened the responsibilities of senior executive David Taylor, putting him in the lead to succeed Chief Executive A.G. Lafley. (http://on.wsj.com/1yJ5oIV)
* Kinder Morgan Inc will spend $3 billion to buy a new oil pipeline and other energy assets in the Bakken Shale from a private partnership controlled by oil billionaire Harold Hamm. (http://on.wsj.com/1umXwbO)
* eBay Inc is cleaning house before its planned breakup later this year. The Internet commerce company is cutting 2,400 jobs, adding three board members and exploring the sale or spinoff of its eBay Enterprise unit, which helps companies with their Web sales effort. (http://on.wsj.com/1wpvY5s)
* American Express Co said it would eliminate 4,000 jobs later this year, but the company's cost cutting isn't moving fast enough for some investors. (http://on.wsj.com/1xBH5Kh)
FT
* Britain's sporting goods retailer Sports Direct confirmed that its founder Mike Ashley had sold a 2.6 percent stake in the company, raising 112 million pounds ($170 million).
* Administrators for Alpari are looking to sell the UK retail foreign exchange broker in the coming seven days after receiving expressions of interest. The co-founder of Alpari applied a year ago to wind up the parent company fearing it was "doomed" without a reliable source of capital.
* The European Central Bank's policy makers proposed a programme that would see the ECB buy 50 billion euros ($58 billion) in bonds per month for between one and two years. However, the Officials stressed that no formal decision had been made by late Wednesday evening.
* Hedge fund group Brevan Howard made peace with its co-founder Christopher Rokos and agreed to help him set up his own business, bringing the legal battle to an end.
NYT
* In the face of European Union opposition to the South Stream pipeline project, Gazprom is moving to an alternate route. While some analysts doubt the feasibility of Turkish Stream, others say a route to Turkey makes strategic and economic sense. Russia would solidify its position in that country, a fast-growing gas market that is already Gazprom's second-largest gas customer in the European region after Germany. (http://nyti.ms/1BINcCJ)
* Microsoft Corp unveiled an unexpected new headset at a Windows 10 event on Wednesday. The headset allows interaction with holographic images, enabling people to play video games, build 3D models and hold immersive videoconferences with colleagues. (http://nyti.ms/1yI89Mf)
* U.S. President Barack Obama's push for a new "middle-class economics" may go nowhere in Congress, but his ambitious array of proposals to raise stagnant incomes and provide more government support for struggling working families will frame his last two years in office and help make the politics of rich and poor a central issue in the campaign to succeed him. (http://nyti.ms/1AR2IqV)
* Goldman Sachs Group Inc has found ways to put its money to work in formats that appear to comply with the Volcker Rule, but its investments have caused concern among some of its big clients. (http://nyti.ms/15BQNWd)
* Top financial regulators on Wednesday discussed ways to improve how so-called too-big-to-fail institutions are singled out for closer supervision, but they stopped well short of reversing any designations made so far. (http://nyti.ms/1t0BccQ)
* New York State's top law enforcer has claimed that Barclays Plc made a false statement in court documents and that it defied subpoenas seeking the testimony of two executives, a move that builds on a previous lawsuit over the bank's private stock trading platform. (http://nyti.ms/15v1uce)
* Standard & Poor's, the credit rating agency blamed for helping inflate the subprime mortgage bubble, has settled accusations that it orchestrated a similar fraud years after the bubble burst. S&P has agreed to settle an array of government investigations stemming from 2011, paying nearly $80 million and admitting some misdeeds, federal and state authorities announced on Wednesday. (http://nyti.ms/1uw94PT)
* Facing stiff competition and the declining growth of its auctions business, eBay Inc announced a shakeup of the company on Wednesday, saying it planned to cut 2,400 positions, or 7 percent of its global work force. (http://nyti.ms/15v2jBQ)
* Kinder Morgan Inc said on Wednesday that it had agreed to buy Hiland Partners LP, an oil pipeline and gathering company owned by the billionaire Harold Hamm, for about $3 billion, expanding its presence in the oil-rich Bakken rock formation in the northern United States. (http://nyti.ms/1Jb3tBm)
* Uber, the popular ride-hailing start-up, has closed $1.6 billion in financing from clients of Goldman Sachs Group Inc's private wealth arm, the investment bank confirmed on Wednesday. (http://nyti.ms/1CCvayJ)
Canada
THE GLOBE AND MAIL
** Insolvent Target Canada owes billions of dollars to a long list of companies - big and small - including such familiar names as Procter & Gamble Co, Mattel Inc and Nestle. (http://bit.ly/1yvqgEs)
** The state of Alaska on Wednesday cancelled bids for a ferry terminal update that the Canadian government threatened to block because of a dispute over the use of American steel. (http://bit.ly/1GA15Gy)
** Canada's labour market is already limping, and lower oil prices could further dampen income growth and employment opportunities, the Bank of Canada says. (http://bit.ly/1CSWs4v)
NATIONAL POST
** Samsung Electronics Co Ltd is actively pursuing a plan to take over or buy a significant stake in BlackBerry Ltd despite statements from both companies this week denying that such a plan may be in the works, according to a source. (http://bit.ly/1wpG0Ue)
** The Bank of Canada on Wednesday became the first major developed world bank to cut interest rates in response to collapsing oil prices, warning the resulting fallout poses a threat to Canada's economy and financial stability. (http://bit.ly/1yQwPnk)
** The financing window is open for Canadian gold miners, and they are rushing through it at a frantic pace before it shuts. Six companies have announced bought deal offerings since Tuesday evening: Romarco Minerals Inc, Detour Gold Corp , Osisko Gold Royalties Ltd, Primero Mining Corp , Asanko Gold Inc and Richmont Mines Corp. Between them, they are raising a whopping C$789.8 million. (http://bit.ly/1yvC89M)
China
CHINA SECURITIES JOURNAL
- China's investments overseas last year exceeded foreign direct investment, meaning the country has become a net capital exporter, Shen Danyang, a spokesman at the Ministry of Commerce, said at a press conference on Wednesday.
- Newly merged brokerage Shenwan Hongyuan Group Co Ltd will begin trading on Shenzhen on Jan. 26. The company is set to become the second largest listed brokerage next to CITIC Securities Co Ltd.
- China Development Bank will lend more than 400 billion yuan ($64.40 billion) to support slum renovation, 100 billion yuan for railway projects, and a further 90 billion yuan for water conservation projects in 2015, Zheng Zhijie, the bank's president, said at a meeting in Beijing.
SHANGHAI SECURITIES NEWS
- Chinese funds made profit of close to 300 billion yuan in the last quarter of 2014 as strong financial sector stocks propelled the country's bourses, according to public filings. This was the highest Q4 profit since 2010.
- China's far-western province of Xinjiang is likely to see economic growth of 9 percent this year after posting 10 percent growth in 2014, according to a regional congress meeting.
CHINA DAILY
- China will introduce rules to protect the country's cyberspace security later this year, a senior official at the Cyberspace Administration said on Wednesday.
SHANGHAI DAILY
- Chinese steamed bun chain Goubuli has signed a deal to run the China operations of Australian coffee group Gloria Jean's Coffees, a senior executive at the Chinese firm said on Wednesday. Goubuli will hold 80 percent of a newly formed joint venture.
Britain
The Times
Balfour Beatty Plc is expected to announce a near-doubling of losses when it reveals the outcome of an independent investigation into its UK construction division. Balfour has already made a provision of 135 million pounds ($204.40 million) related to its British building business. However, it is expected to announce additional losses of more than 100 million pounds. (http://thetim.es/184bjzr)
Plans to start fracking in Britain have suffered a setback after Lancashire County council planning officers recommended refusing two applications because of the level of noise and traffic. Councillors will vote on the recommendations next week and it will be a significant blow to the government's plans for shale gas development if they accept them. (http://thetim.es/1Ja1Io4)
The Guardian
The tobacco company Japan Tobacco Inc has rejected a trade union plan to save 500 jobs at the Gallaher cigarette factory site in Northern Ireland. Unite, the union representing most workers at the plant at Lisnafillan, just outside Ballymena in County Antrim, confirmed that the Japanese owners plan to end production there by 2017. (http://bit.ly/1GwuOA5)
The UK government is to press ahead with legislation on plain packaging for cigarettes before the general election after years of delay and conflicting claims about the success of an Australian scheme. (http://bit.ly/1xzNYeY)
The Telegraph
Barclays Plc is facing new fraud allegations over its "dark pool" trading platform. New York State Attorney General Eric Schneiderman wants to expand his lawsuit against the British bank after his investigation "uncovered significant and additional wrongdoing." (http://bit.ly/1CCZc5v)
The European Central Bank is preparing to pump up to 50 billion euros ($58.14 billion) a month into the eurozone sending markets into a spin. The size of the monthly bond-buying stimulus could total as much as 1.1 trillion euros, as part of a rescue package intended to boost the euro area economies and combat falling price growth. (http://bit.ly/15uDeXO)
Sky News
One of Britain's most respected businessmen has rejected a call from Prime Minister David Cameron for companies to increase workers' wages on the back of the slump in oil prices. Speaking to Sky News, ex-Centrica Chairman Roger Carr said the prime minister's request last week made little economic sense and was unlikely to be adopted. (http://bit.ly/1E3upTH)
The energy regulator has announced new rules to ensure trust in price comparison websites amid claims some have hidden the best deals from consumers. Ofgem said its "confidence code" would have to be implemented in full by websites by the end of March or they risked losing their accreditation. (http://bit.ly/1um1Yrl)
The Independent
Unemployment fell again in November to 5.8 percent, its lowest level in more than six years. The Office for National Statistics said that the number of people without a job dropped by 58,000 to 1.9 million, while pay grew faster than inflation. (http://ind.pn/184h548)
Fears over persistent low inflation forced the Bank of England's two "hawks" to drop their calls for an interest-rate rise in a stunning U-turn, it has emerged. The change of heart from monetary policy committee members Martin Weale and Ian McCafferty came after the bank's official Consumer Prices Index inflation benchmark slipped to an almost 15-year low of just 0.5 percent in December. (http://ind.pn/1APVzXL)
Fly On The Wall Pre-market Buzz
ECONOMIC REPORTS
Domestic economic reports scheduled for today include:
Jobless claims for week of Jan. 17 at 8:30--consensus is 300K
FHFA house price index for November at 9:00--consensus up 0.3%
EIA natural gas storage change for week of Jan. 16 at 10:30
DOE petroleum status report for week of Jan. 16 at 11:00
ANALYST RESEARCH
Upgrades
Alcatel-Lucent (ALU) upgraded to Conviction Buy from Neutral at Goldman
Chuy's (CHUY) upgraded to Outperform from Market Perform at Wells Fargo
Joy Global (JOY) upgraded to Outperform from Market Perform at BMO Capital
Lennox (LII) upgraded to Buy from Neutral at UBS
Downgrades
Advent Software (ADVS) downgraded to Underperform at Raymond James
Altra Holdings (AIMC) downgraded to Neutral from Outperform at RW Baird
Arrowhead (ARWR) downgraded to Hold from Buy at Deutsche Bank
Aspen Technology (AZPN) downgraded to Underweight from Neutral at JPMorgan
CBL & Associates (CBL) downgraded to Equal Weight from Overweight at Barclays
CTPartners (CTP) downgraded to Market Perform from Outperform at William Blair
Check Point (CHKP) downgraded to Neutral from Overweight at JPMorgan
Dunkin' Brands (DNKN) downgraded to Market Perform from Outperform at Wells Fargo
EV Energy (EVEP) downgraded to Market Perform from Outperform at Raymond James
Education Realty (EDR) downgraded to Neutral from Buy at BofA/Merrill
Education Realty (EDR) downgraded to Sell from Neutral at UBS
Emerson (EMR) downgraded to Neutral from Outperform at RW Baird
Equity Residential (EQR) downgraded to Equal Weight from Overweight at Barclays
Essex Property Trust (ESS) downgraded to Equal Weight from Overweight at Barclays
F5 Networks (FFIV) downgraded to Hold from Buy at Stifel
Fifth Third Bancorp (FITB) downgraded to Market Perform from Outperform at FBR Capital
Flowserve (FLS) downgraded to Neutral from Outperform at RW Baird
Fortress (FIG) downgraded to Perform from Outperform at Oppenheimer
Legacy Reserves (LGCY) downgraded to Market Perform from Outperform at Raymond James
Magnum Hunter (MHR) downgraded to Hold from Buy at Stifel
Navistar (NAV) downgraded to Underperform from Market Perform at BMO Capital
PACCAR (PCAR) downgraded to Underperform from Market Perform at BMO Capital
Packaging Corp. (PKG) downgraded to Market Perform from Outperform at BMO Capital
Pentair (PNR) downgraded to Neutral from Outperform at RW Baird
SanDisk (SNDK) downgraded to Neutral from Buy at B. Riley
VeriSign (VRSN) downgraded to Underweight from Neutral at JPMorgan
Initiations
3M Company (MMM) initiated with a Buy at UBS
Babcock & Wilcox (BWC) initiated with a Buy at BofA/Merrill
Chanticleer Holdings (HOTR) initiated with a Speculative Buy at Taglich
Chicago Bridge & Iron (CBI) initiated with an Underperform at BofA/Merrill
Crane (CR) initiated with a Buy at UBS
Danaher (DHR) initiated with a Buy at UBS
Dover (DOV) initiated with a Neutral at UBS
Eaton (ETN) initiated with a Buy at UBS
Emerson (EMR) initiated with a Neutral at UBS
Encana (ECA) initiated with an Equal Weight at Morgan Stanley
General Electric (GE) initiated with a Buy at UBS
Honeywell (HON) initiated with a Neutral at UBS
ITT Corp. (ITT) initiated with a Neutral at UBS
Ingersoll-Rand (IR) initiated with a Buy at UBS
Nokia (NOK) reinstated with a Buy at Goldman
Pentair (PNR) initiated with a Neutral at UBS
Rockwell Automation (ROK) initiated with a Buy at UBS
Roper Industries (ROP) initiated with a Buy at UBS
Rose Rock Midstream (RRMS) initiated with an Outperform at RBC Capital
SPX Corp. (SPW) initiated with a Buy at UBS
SemGroup (SEMG) initiated with an Outperform at RBC Capital
Synaptics (SYNA) initiated with an Outperform at BMO Capital
Tyco (TYC) initiated with a Sell at UBS
COMPANY NEWS
eBay (EBAY) said plans 'on track' to separate eBay, PayPal. The company also said it will reduce workforce globally by approximately 7% in Q1 and entered a standstill agreement with Carl Icahn. Further, the company said it will explore strategic options for eBay Enterprise, including a sale or IPO
Kinder Morgan (KMI) to acquire Hiland Partners for approximately $3B. Kinder Morgan also announced that, effective June 1, Steven J. Kean, currently President and COO of KMI, will become CEO of KMI, and Richard D. Kinder will become Executive Chairman of the KMI Board of Directors
Endo (ENDP) will replace Covidien (COV) in S&P 500 as of 1/26 close
Minerva Neurosciences (NERV) announced that preliminary results from a Phase 1 clinical study showed that treatment with MIN-202, a selective orexin-2 antagonist, resulted in significant improvements in sleep onset and sleep duration in patients with comorbid insomnia related to major depressive disorder
SanDisk (SNDK) announced expansion of stock repurchase program by $2.5B
EARNINGS
Companies that beat consensus earnings expectations last night and today include:
eBay (EBAY), American Express (AXP), KeyCorp (KEY), Alaska Air (ALK), BB&T (BBT), TAL Education (XRS), Quality Systems (QSII), Signature Bank (SBNY), Logitech (LOGI), Farmers Capital Bank (FFKT), Briggs & Stratton (BGG), Old Second Bancorp (OSBC), Access National (ANCX), Innovative Solutions (ISSC), Xilinx (XLNX), Eagle Bancorp (EGBN), United Rentals (URI), F5 Networks (FFIV), Dolby (DLB), SanDisk (SNDK), Texas Capital (TCBI)
Companies that missed consensus earnings expectations include:
Flagstar Bancorp (FBC), Pacific Continental (PCBK), Cohen & Steers (CNS), Susquehanna (SUSQ), Navient (NAVI), BancorpSouth (BXS), Sallie Mae (SLM), Community Bank System (CBU), Kinder Morgan (KMI)
Companies that matched consensus earnings expectations include:
CVB Financial (CVBF), East West Bancorp (EWBC), Cathay General (CATY), Trustco Bank (TRST), Banner Corp. (BANR)
eBay (EBAY) sees Q1 adjusted EPS 68c-71c, consensus 76c, sees FY15 adjusted EPS $3.05-$3.15, consensus $3.26
SanDisk (SNDK) sees year over year revenue declines in Q1, Q2; sees return to year-on-year revenue growth in 2H
Discover (DFS) sees FY15 revenue margin down modestly
NEWSPAPERS/WEBSITES
Google (GOOG) to launch phone service with Sprint (S), T-Mobile (TMUS), The Information says
American Express (AXP) plans several thousand job cuts this year, Bloomberg reports
U.S. Steel (X) to idle plants, cut 545 jobs, WSJ reports
Northrop Grumman (NOC) CEO sees no shift in U.S.views on Defense M/A, Reuters reports
Google (GOOG), Viacom (VIA) win dismissal of suit on children's web privacy, Re/code reports
Oracle's (ORCL) Ellison said Virtual Compute Appliance is half the price of equivalent Cisco (CSCO) hardware, Bloomberg reports
SYNDICATE
Auspex Pharmaceuticals (ASPX) files to sell 4M shares of common stock
BioMarin (BMRN) 8.5M share Spot Secondary priced at $93.25
Chatham Lodging (CLDT) files to sell 2.5M shares of common stock
Keryx (KERX) 9.17M share Secondary priced at $12.00
Otonomy (OTIC) files to sell $75M in common stock
Puma Biotechnology (PBYI) 1M share Secondary priced at $190.00
ServiceMaster (SERV) files to sell 25M shares for holders