- Pope steps down, citing frailty (Reuters)
- Japan’s economic minister wants Nikkei to surge 17% to 13,000 by March (Japan Times)
- Venezuelan devaluation sparks panic (FT)
- Rajoy releases tax returns, but fails to clear up doubts over Aznar years (El Pais)
- Companies Fret Over Uncertain Outlook (WSJ)
- Home Depot Dumps BlackBerry for iPhone (ATD)
- Kuroda favors Abe's inflation target, mum about BOJ role (Kyodo)
- A Cliff Congress May Go Over (WSJ)
- U.S., Europe Seek to Cool Currency Jitters (WSJ)
- Radical rescue proposed for Cyprus (FT)
- Franc Is Still Overvalued, SNB’s Zurbruegg Tells Aargauer (BBG)
- Northeast Crawls Back to Life After Crippling Blizzard (WSJ)
Overnight Media Digest
WSJ
* In his second inaugural address, U.S. President Barack Obama laid out a roster of social policies that cheered his base and infuriated Republicans. In Tuesday's State of the Union, the president is expected to do the same as he pushes to complete the unfulfilled pieces of his economic vision.
* U.S. regulators would likely clear US Airways Group Inc's proposed merger with American Airlines, despite particularly active antitrust enforcement over the last year.
* Apple Inc is experimenting with designs for a watch-like device that would perform some functions of a smartphone, according to people briefed on the effort. The company has discussed such a device with its major manufacturing partner Hon Hai Precision Industry Co, one of these people said, as part of explorations of potentially large product categories beyond the smartphone and tablet.
* The newspaper union that battled Tribune Co over a $67 million executive bonus proposal for 2009 has asked the court to order the publisher to cover its professional fees, a sum of $358,000.
* Constellation Brands Inc asked a U.S. federal judge to include the company in legal proceedings on the Justice Department's challenge to the proposed merger between beer makers Anheuser-Busch InBev and Mexico's Grupo Modelo .
* The 55th Grammy Awards Sunday night presented a mixture of newcomers and veterans, as the organization that presents the show sought to stay relevant to young viewers while honoring music that voters consider enduring.
FT
A unit of EADS, Europe's biggest aerospace company, is under scrutiny of the FBI, which is probing corruption allegations relating to a contract in Saudi Arabia for the UK's Ministry of Defence. Barclays will target at least 2 billion pounds in cost savings from its 20 billion pounds annual cost base when the bank announces its strategic overhaul on Tuesday. The overhaul includes plans to boost profitability by cutting about 2,000 investment bank jobs and shuttering some operations in parts of Europe.
American Airlines and US Airways are putting the finishing touches to their merger that will create the biggest US carrier by revenues in a deal expected to be announced this week.
Sir Stelios Haji-Ioannou, founder of EasyJet, is set to vote against plans to award the company's CEO a 5 million pounds pay package at the budget airline's annual general meeting next week. The horse meat scandal, which has rocked Britain's food industry, has spread across the continent with some of France's biggest retailers taking their in-house beef products off shelves fearing adulteration.
Canadian pension fund Caisse de Depot is close to buying a 25 percent stake in London Array, the world's largest offshore wind farm, for 500 million pounds. The current owner of the shares, Denmark's Dong Energy, is looking to sell half of its 50 percent stake. Private equity firm Lion Capital struck a 300 million-pound deal with Montagu Private Equity to buy GHD, a UK-based hair straightening brand endorsed by singer Katy Perry.
According to a confidential memorandum prepared ahead of Monday's meeting of eurozone finance ministers, a radical financial rescue plan for Cyprus entails uninsured depositors in Cypriot banks, as well as investors in the country's sovereign bonds, incurring losses.
NYT
* After months of negotiations, American Airlines and US Airways Group Inc appeared likely to announce a merger this week, which would create the nation's biggest airline and concentrate even further a once-fragmented industry.
* Southeastern Asset Management, one of the biggest investors in Dell Inc, said that it would oppose the company's plans to go private, setting up a major potential roadblock for the biggest buyout since the financial crisis.
* On Monday, NBCUniversal will announce that it has concluded a deal with Hearst Magazines to rebrand one of NBC's existing cable properties, the G4 network, as a new entity, the Esquire Network.
* The Project on Government Oversight, a non-profit watchdog group, is set to release a study on Monday highlighting a pattern of alumni of the U.S. Securities and Exchange Commission going to bat for Wall Street firms - and winning. The report, similarly sceptical of Wall Street lawyers joining the regulator, cites recent enforcement cases and scuttled money market regulations to underscore its concerns.
* Robert Wolf, a former chairman of UBS, was expected to formally announce on Monday several hires for his firm, 32 Advisors, including former members of the Obama administration.
* American regulators dealt a major blow to the hopes of Novo Nordisk, the Danish drug maker, for its new long-acting insulin Tresiba by demanding that it conduct additional clinical tests to assess potential heart risks.
* Several journalists who cover Myanmar said Sunday that they had received warnings from Google Inc that their e-mail accounts might have been hacked by "state-sponsored attackers."
Canada
THE GLOBE AND MAIL
* Premier-designate Kathleen Wynne turned to her leadership rivals and some Liberal backbenchers for key positions in her new cabinet, which will be sworn-in Monday afternoon, The Canadian Press has learned.
Sources said leadership contender Charles Sousa, a former banker, will become Ontario's new finance minister, taking over from Dwight Duncan, who will officially resign his Windsor seat on Thursday.
* Canada is in danger of losing a major international battle over its management of polar bears with former allies reversing their position and supporting a proposed ban on cross-border trade in parts of the animals.
Reports in the business section:
* The sawmills of three major Canadian lumber producers are expected to enjoy brisk orders this year, especially as housing markets in the United States perk up.
West Fraser Timber Co Ltd, Canfor Corp and International Forest Products Ltd, which report their fourth-quarter results this week, have regained their swagger during the long road to recovery over the past four years.
NATIONAL POST
* An evangelical organization that describes homosexuality as a "perversion" and a "sin" is receiving funding from the Government of Canada for its work in Uganda, where gays and lesbians face severe threats.
* Thousands of vending machines still can't digest those plastic C$20 ($20) bank notes the government released two months ago, with machine owners blaming the Bank of Canada for their problems.
As many as half a million machines that scan bank notes needed reprogramming to accept the radically redesigned $20 bills, the most popular denomination in Canada.
FINANCIAL POST
* Ernst & Young foresees a lot of "for sale" signs being posted on energy assets around the world - and Canada's oilpatch is no exception. The global advisory firm found 37 percent of oil and gas respondents it surveyed globally are either in the process of selling assets or plan to do so over the next two years.
* The inability to get oil sands crude to the right markets is costing the Canadian economy dearly, according to a new report paid for by the Saskatchewan government. Each stalled pipeline project means a loss to the Canadian economy of between C$30 million and C$70 million every day, said the report penned by the Canada West Foundation, a Calgary-based think-tank.
Fly On The Wall 7:00 Am Market Snapshot
ANALYST RESEARCH
Upgrades
AOL (AOL) upgraded to Outperform from Sector Perform at RBC Capital
Astronics (ATRO) upgraded to Buy from Hold at KeyBanc
Banco Bilbao (BBVA) upgraded to Neutral from Underweight at JPMorgan
Graphic Packaging (GPK) upgraded to Buy from Hold at Deutsche Bank
H.B. Fuller (FUL) upgraded to Buy from Hold at Deutsche Bank
Heartland Express (HTLD) upgraded to Buy from Hold at KeyBanc
Knight Transportation (KNX) upgraded to Buy from Hold at KeyBanc
Marten Transport (MRTN) upgraded to Buy from Hold at KeyBanc
Nike (NKE) upgraded to Overweight from Neutral at JPMorgan
Questar (STR) upgraded to Equal Weight from Underweight at Morgan Stanley
Renasant (RNST) upgraded to Outperform from Market Perform at Keefe Bruyette
Swift Transportation (SWFT) upgraded to Buy from Hold at KeyBanc
Downgrades
Alnylam (ALNY) downgraded to Hold from Buy at MLV Equity
Charles Schwab (SCHW) downgraded to Sell from Neutral at Citigroup
Elan (ELN) downgraded to Neutral from Buy at UBS
Fossil (FOSL) downgraded to Hold from Buy at Benchmark Co.
PDC Energy (PDCE) downgraded to Neutral from Buy at SunTrust
PharMerica (PMC) downgraded to Sector Perform from Outperform at RBC Capital
Power Integrations (POWI) downgraded to Hold from Buy at Deutsche Bank
Primerica (PRI) downgraded to Market Perform from Outperform at Keefe Bruyette
Sigma-Aldrich (SIAL) downgraded to Sell from Neutral at UBS
Sprint (S) downgraded to Neutral from Overweight at Atlantic Equities
Initiations
Cosi (COSI) initiated with a Buy at Roth Capital
Hydrogenics (HYGS) initiated with a Buy at Roth Capital
Partner Communications (PTNR) initiated with a Neutral at Goldman
USA Compression (USAC) initiated with a Market Perform at Wells Fargo
USA Compression (USAC) initiated with an Overweight at Barclays
USA Compression (USAC) initiated with an Overweight at JPMorgan
USA Compression (USAC) initiated with a Buy at Goldman
HOT STOCKS
Dell (DELL) said go-shop process provides opportunity for superior offer
Google (GOOG) Chairman Schmidt to sell 3.2M shares of company stock
GOL Linhas Aereas Inteligentes’ (GOL) board okays Smiles unit to begin IPO process in Brazil
Novo Nordisk (NVO, SNY, LLY) received FDA “Complete Response Letter" for Tresiba and Ryzodeg
Acacia Research (ACTG) subsidiary entered into license, settlement agreement with Charles Schwab (SCHW)
Cameco (CCJ) sees little improvement in Japan, but seeing clarity on some issues
NXP Semiconductors (NXPI), Delphi Automotive (DLPH) entered strategic collaboration agreement
JAKKS Pacific (JAKK), LucasFilm announced agreement
EARNINGS
Companies that beat consensus earnings expectations last night and today include:
American Capital Mortgage (MTGE)
Companies that missed consensus earnings expectations include:
CNA Financial (CNA)
Companies that matched consensus earnings expectations include:
Boardwalk Pipeline (BWP), 1st United Bancorp (FUBC)
NEWSPAPERS/WEBSITES
- While investors have pushed the Dow Jones Industrial Average up this year near its record high, a different mood is pervading U.S. companies, where executives are less optimistic about the global economy and their own prospects, and many are lowering financial forecasts, the Wall Street Journal reports
- The potential deal between American Airlines parent AMR Corp. (AAMRQ) and US Airways Group (LCC) to create the world's biggest airline likely would fly clear of government objections, experts said, the Wall Street Journal reports
- Apple (AAPL) has been ordered to appear before Australia's parliament with Microsoft (MSFT) and Adobe Systems (ADBE) to explain why local consumers pay so much for their products, despite the strong Aussie dollar, Reuters reports
- Since the days of Henry Ford’s (F) Model T, automakers have considered the "global car" to be their Holy Grail - the same basic design that can be built, in subtle variations, and sold in different markets. Take that fundamental concept, stretch it across many different vehicle types, sizes and brands, then build them by the millions, and you begin to sense the enormity of Volkswagen's (VLKAY) rapidly evolving "mega-platform" strategy and its potential impact on competitors around the globe, Reuters reports
- China passed the U.S. in 2012 to become the world’s biggest trading nation as measured by the sum of exports and imports of goods. U.S. exports and imports of goods last year totaled $3.82T, the U.S. Commerce Department said. China’s customs administration reported last month that the country’s trade in goods last year totaled $3.87T, Bloomberg reports
- Anheuser-Busch InBev’s (BUD) bid to buy Grupo Modelo SAB (GPMCF) may face an obstacle unforeseen by the parties when the Justice Department sued to block the deal: assignment of the case to U.S. District Judge Richard Roberts, Washington’s slowest judge who was randomly picked to handle antitrust litigation over the $20.1B deal, Bloomberg reports
Dell (DELL) deal could falter due to objection by largest shareholder Southeastern Asset Management which holds an 8.5% stake
CSX (CSX) could increase about 33% this year
Hospira (HSP) stock could surge with successful inspection of facility
Wendy's (WEN) could rise 40% amidst remodeling, new marketing campaign
VMware (VMW) shares could drop another 20%, no rebound in sight
SYNDICATE
Jacksonville Bancorp (JAXB) files to sell 100M shares of common stock for holders
Pacific Ethanol (PEIX) files to sell 33M shares of common stock for holders
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