>>> Bank of America beats by $0.08, reports revs in-line --> +1.75% Pre Open - 3

Bank of America beats by $0.08, reports revs in-line
Reports Q3 (Sep) loss of $0.01 per share, $0.08 better than the Capital IQ Consensus Estimate of ($0.09); revenues fell 2.4% year/year to $21.43 bln vs the $21.33 bln consensus.

Highlights
  • BAC reported net income of $168 million for Q3. After deducting dividends on preferred shares, the company reported a loss of $0.01 per share. The results include the previously announced pretax charge of $5.3 billion for the settlement with the DoJ which impacted earnings per share by $0.43.
  • Including the incremental credit costs associated with the DoJ Settlement, the reserve release was $407 million in Q3, compared to a reserve release of $1.4 billion in the third quarter of 2013.
  • Consumer and Business Banking reported net income of $1.9 billion, up $69 million, or 4% y/y, driven by lower provision for credit losses. Revenue was relatively stable compared to the year-ago quarter, as lower net interest income resulting from lower loan balances and yields was partially offset by higher noninterest income due to higher service charges and card income.
  • The company originated $11.7 billion in first-lien residential mortgage loans and $3.2 billion in home equity loans in the third quarter of 2014, compared to $11.1 billion and $2.6 billion, respectively, in the second quarter of 2014, and $22.6 billion and $1.8 billion, respectively, in the year-ago quarter.
  • Fixed Income, Currency and Commodities sales and trading revenue, excluding net DVA, increased 11 percent from the year-ago quarter, driven by strong results in currencies due to increased volatility in the period as well as gains in mortgages and commodities. Equities sales and trading revenue, excluding net DVA, increased 6 percent, from the year-ago quarter, driven by increased client financing revenue.
Capital Levels
  • Common equity tier 1 capital ratio was 12.0%.
  • Estimated SLR for the parent company was approximately 5.5%.
  • Tangible book value per share was $14.13.
  • Book value per share was $21.03.

WSJ : Watch Corporate Bonds for Clues to Markets’ Meltdown

Watch Corporate Bonds for Clues to Markets’ Meltdown
Investment-Grade Corporate Bonds Indicators of Stormy Weather

The reversal in markets in October has been sharp. But is it the start of something more sinister, or is it just a scare? Investors should watch the corporate bond markets for an answer.
Equity markets have given investors a rough ride. The S&P500 is down 6.6% from its September peak; Europe has fared even worse with the Stoxx Europe 600 down 8.4%. The market has flipped from worrying about the U.S. Federal Reserve starting to tighten policy to worrying about the global outlook for growth. Government bond yields have plummeted, inflation is low and falling, oil prices are collapsing and a string of extremely poor economic data from Germany has spooked investors.
But it isn’t clear that so much has changed in the big picture. The German industrial data for August has been distorted by holiday patterns; September’s numbers should show a bounce. Lower oil prices may mechanically feed lower headline inflation, but will also put more cash in consumers’ pockets. Lower sovereign bond yields signal concern, but also ease financial conditions.
An indicator of how worried investors really are might come from the corporate debt markets. High-yield bonds in the U.S. and Europe have suffered along with equities. But investment-grade bonds have remained remarkably stable.
If global financial markets are headed for more trouble, then investment-grade corporate bonds could be the canary in the coal mine. So far they have exhibited few signs of worry. The yield spread between U.S. corporate bonds and Treasurys has widened just 0.1 percentage point in the past month, Barclays BARC.LN -1.31% data show. Even this has only been because corporate debt has failed to keep up with the rally in government paper: yields have fallen.
In Europe, the market has been even more resilient, with spreads little changed from a month ago and yields lower. And Europe is really the market to watch: it is where growth is being questioned most. If European corporate bond spreads start to widen in earnest, then that spells trouble as it would signal a downturn in the fortunes of major companies. That said, even stable spreads might not be reason for optimism on stocks: corporate bonds fare better with slow growth than equities.
Conversely, high-yield bonds could yet offer reason for hope. In the U.S., yields have hit a high for the year of 6.3%; junk bonds now offer a pickup of 4.7 percentage points over similar-maturity Treasurys. Given the better growth outlook for the U.S., which should mean that defaults remain limited, that pickup could look attractive. The market is likely to be volatile, since high-yield bonds often suffer as the interest-rate cycle turns. But if investors start buying, that would indicate underlying confidence in the economy’s future.
So far, investors have been voting with their feet. Money has been piling into investment-grade bond funds. If corporate bond markets don’t crack, equity investors can still hunker down and hope that September and October’s pain will pass.

NYT - TPG plans to boost stake in Creative Artists to 51%

The Wall Street guys are tightening their grip on Hollywood.
Private-equity firm TPG Capital is negotiating for a controlling stake in powerhouse Hollywood talent agency Creative Artists Agency (CAA), The Post has learned.
The talks between CAA, the No. 2 agency in size behind WME/IMG, and David Bonderman’s TPG are in their late stages, sources said.
A deal between the two — which would increase TPG’s stake to 51 percent from 35 percent — could be announced within the week, one source familiar with the talks said.
If no snags materialize, an agreement could be presented to key employees next week, the source added.
“They’re going to take the money and spread it around,” the source said. “There are people in comedy, movie and sports divisions who all feel they want to know what their future is.”
Like all negotiations before a deal is signed, they could still fall apart.
CAA, formed in 1985, represents scores of A-list Hollywood talent, including George Clooney, Tom Cruise, soccer star Cristiano Ronaldo and Cate Blanchett.
TPG’s first investment in CAA, in October 2010, valued the agency at $700 million and involved the creation of a $500 million joint-venture investment fund to expand interests in sports and tech.
The current talks involve TPG pumping more cash into CEO Richard Lovett’s CAA to unlock some end-of-year cash for its employee bonuses, sources said.
It would also put CAA on a path toward an initial public offering, according to sources — a route also being eyed by investors in Silver Lake-backed WME/IMG.
CAA’s main partners are Lovett, Bryan Lourd, Kevin Huvane and David O’Connor.
“They’ll take money out to use it to lure people to stay,” said the source.
There is certainly something buzzing around the Century City headquarters building — with a series of intense meetings between Lovett’s team and TPG this week, a second source noted.
TPG is definitely hoping for an IPO exit for its investment, people familiar with the talks said.
“There is no real easy exit as it stands,” the second source said. “ The thought is to buy it and build and do an IPO. TPG wants control of CAA to do it.”
Meanwhile TPG Growth, a division of TPG Capital, is one of the financial backers of the creation of a new movie and TV studio by producer Robert Simonds.
The studio has $1 billion in funds, its executives have boasted in several news reports.
China’s Hony Capital is also a backer of the yet-unnamed studio, according to reports.
TPG Growth also formed a separate entity, Evolution Media, an investment vehicle formed with Jeff Skoll’s Participant Media, with the aim of investing $350 million in entertainment assets.
TPG Growth also holds stakes in Uber, Airbnb, vRide, Fender, SuccessFactors, and SurveyMonkey, according to the company.
A TPG spokesperson declined to comment for this ctory. CAA did not return calls requesting comment.

(BFW) EU Civil Aero 3Q to Be Challenging, Prefer Rolls, Zodiac: JPM

EU Civil Aero 3Q to Be Challenging, Prefer Rolls, Zodiac: JPM
2014-10-15 10:38:56.655 GMT


By Brian Lysaght
Oct. 15 (Bloomberg) -- Go long into Rolls-Royce Oct. 20-21
CMD, where co. will provide medium-term guidance, JPMorgan says
in note.
* Expect strong rebound in Zodiac earnings after fixing
production issues
* Airbus, Safran have upside, though 3Q results to be
lackluster
* Expected 3Q sector themes: confidence in large aircraft
cycle; mixed aftermkt data; EPS upside if dollar strength
sustained; “growing pains” from R&D, production ramp ups:
JPM
* NOTE: MTU Aero 3Q earnings Oct. 23; Safran 3Q sales Oct. 23;
Meggitt trading update Nov. 5; Airbus 3Q earnings Nov. 14;
Zodiac FY earnings Nov. 24: Bloomberg data
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Reuters-Tech firms HP, EMC call off merger talks

(Reuters) - Hewlett-Packard Co has ended merger talks withEMC Corp and may announce this development as soon as Wednesday, deciding to walk away after months of fruitless negotiations, people briefed on the matter told Reuters.
The official cessation of discussions to merge two of the tech industry's largest enterprise-oriented firms may come as a disappointment to activist investors Elliott Management, which has pushed hard for storage products maker EMC to pursue merger or spinoff opportunities.
Pressure is building on EMC as rival technology companies, such as eBay Inc and Symantec, begin spinning off operations in an attempt to unlock shareholder value, become more agile, and capitalize on faster-growing businesses.
It is unclear when talks ended following months-long discussions, the people said on condition of anonymity because the talks were private.
Executives from the two companies were still trying to hammer out a deal as recently as last week, but talks bogged down on price and are now dead, the people said.
HP has temporarily suspended its stock buyback program ahead of its Nov. 25 earnings because the company said it is in possession of material non-public information. When pressed by stock analysts, Chief Financial Officer Cathie Lesjak noted on a conference call that the non-public information pertains to a possible acquisition.
HP and EMC declined to comment on Tuesday.
It is also unclear what specifically was discussed. A straight-up merger of the two companies would have created one of the industry's largest providers of data storage, and created a computing giant with deep penetration in the business of providing computing hardware and services to corporations.
Elliot Management, which owns 2.2 percent of EMC, has been vocal about wanting EMC to merge or spin off some of its assets, such as software subsidiary VMWare. But EMC has publicly said it plans to keep its company together.
HP is now engaged in a breakup of its own, which analysts say should discourage merger thoughts.
HP has said it will split into Hewlett-Packard Enterprises, a tech infrastructure, softwareand services business, and HP Inc, a leading player in the slow-growing PC and printermarkets.

(BFW) Swiss ZEW Falls to Lowest Since September 2012 on Euro Area

Swiss ZEW Falls to Lowest Since September 2012 on Euro Area
2014-10-15 09:00:00.4 GMT


By Catherine Bosley
Oct. 15 (Bloomberg) -- Credit Suisse ZEW financial market
indicator, which tracks analysts’ expectations on economy for
the coming six months, fell to minus 30.7 points in Oct. from
minus 7.7 points
* ZEW: Outlook for Switzerland likely reflects fears of
contagion from euro area
* ZEW: Present state of euro-area economic activity rated
“poor” by majority of financial analysts
* ZEW: Though current state of Swiss economic activity not yet
being viewed as “poor,” outlook has “dimmed
dramatically”
* ZEW: Inflation expectations receded again in Oct.
* NOTE: German investor confidence fell to weakest level in
almost two years as recession concerns mount in Europe’s
biggest economy


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(BFW) Russian Hackers Earned $2.5b Last Year: Group-IB Security Co.

Russian Hackers Earned $2.5b Last Year: Group-IB Security Co.
2014-10-15 08:55:15.920 GMT


By Ilya Khrennikov
Oct. 15 (Bloomberg) -- Of $2.5b sum, $841m from spam,
illegal software sales; $680m from bank card fraud, $426m from
Internet fraud, according to report by Moscow-based cyber-
security firm Group-IB.
* Remainder of sum drawn from hacker attacks aimed at denial
of service, virus sales, access to third-party traffic,
other illegal services: Group-IB
* CEO Ilya Sachkov says that in coming year, may be more
hactivist attacks linked to political protest; also may be
more attacks on banks, payment systems

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