A recent research report by analysts Howard Chen, Adam C. Eling and Ashley N. Serrao from Credit Suisse (ADR) (NYSE: CS) has expressed bullish signs on CME Group (NASDAQ: CME).

The company’s announcement that it has reached agreements with a group of leading broker-dealers to participate in its CDS clearing offering, has been taken very positively by Credit Suisse.

While successfully entering the OTC markets has never been an easy mandate for the exchanges, Credit Suisse views commitment from both the sell-side and buy-side community as an important factor in improving the odds of success for CME Group. Credit Suisse also expressed its bullishness owing to CME’s best-in-class clearing and risk management capabilities coupled with the launch of CDS Clearing.

While ICE has established a clear first-mover advantage in CDS clearing, Credit Suisse believes that the market opportunity is significant enough to support multiple offerings.

• Treasury has Citi locked in TARP. With Bank of America (BAC) exiting TARP, Citigroup (C) is getting restless, but sources say the Treasury's refusal to sell its 34% stake in the bank is stopping Citi from selling shares to repay the $20B it still owes, because investors may be reluctant to buy shares if a Treasury sale could drive down the price. Executives have been trying to convince the Treasury to move for three months; it's currently carrying a paper gain of $6B on a $25B stake. In a report, CreditSights said Citi could repay the $20B by selling $10B of common stock and $10B or more of junior debt securities. Even if the Treasury does sells its shares, and the bank paid off the remaining $20B, it could still be subject to compensation oversight due to $301B in government asset guarantees.
• Bernanke defends Fed leadership. Fed Chairman Ben Bernanke defended his leadership of the Fed and urged the Senate Banking Committee to preserve the central bank's independence during his reconfirmation hearing (webcast, testimony). Next week, the House could vote on legislation that could put the Fed's monetary policy decision-making under a congressional watchdog agency. Bernanke said the Fed's credibility "depends on the market's perception that we are independent in making monetary policy decisions." On other key topics, he said he did not see any asset bubbles emerging in the U.S.
• Cisco falls short, takes Tandberg anyway. Cisco Systems (CSCO) is pressing ahead to buy Norway's Tandberg ASA for 19B Norwegian crown ($3.4B), despite falling short of its self-imposed 90% threshold for acceptances; 89% of shareholders said yes to the offer. Cisco, which raised its bid by 10% after shareholders rejected its first offer, wants to create the world's leader in video conferencing equipment. Cisco said it may try to squeeze above the 90% level - which would force a sale by the holdouts - through open market purchases. Cisco CEO John Chambers has pegged the total value of collaboration tools at around $34B.
• Recycling TARP for jobs. House Speaker Nancy Pelosi suggested recycling leftover funds from the $700B TARP fund to create jobs and boost some salaries. Pelosi floated the idea at a press conference Thursday, the same day President Obama met with business and labor leaders to examine job-creating options. Banks have now repaid much of what they borrowed, with Bank of America (BAC) the latest to do so on Wednesday after it said it will repay the $45B it borrowed.
• Kraft hastens Cadbury bid. Kraft (KFT) plans to launch its £9.8B ($16.4B) hostile bid for Britain's Cadbury (CBY) on Friday, one business day earlier than the Monday deadline, sources say. Kraft will stick to the same cash and share offer it made in early September, which Cadbury's board spurned. Under U.K. takeover rules, Kraft has until day 46, or the middle of January, to raise its bid for the world's largest confectionery group, while Cadbury will have until day 14 to publish its defense. Hershey (HSY), meanwhile, is thought to be mulling a $17B bid for Cadbury - an offer the U.K. confectioner has indicated it would prefer.
• Goldman on bonuses: give them stock. Suggesting some sensitivity to public wrath over its huge compensation packages, Goldman Sachs (GS) is reportedly weighing plans to hike the equity portion of its pay packages, including awarding all annual bonuses to senior executives, including CEO Lloyd Blankfein, in company stock. The firm has been meeting with major investors to explain why it deserves the record pay-packs it's awarding itself after accepting TARP funds. Goldman's board appears hesitant to grant shareholders a non-binding, advisory vote on pay policy as it could lead to investors pushing for a bigger say on other policies.
• Hearst to go digital. Publisher Hearst Corp. plans to compete head-on with Amazon.com's (AMZN) Kindle store with a new digital service called Skiff, which will sell digital versions of newspapers and magazines for electronic readers and other devices. Hearst says Skiff publications will more closely resemble their print counterparts, including advertising, which could make them more lucrative for media companies. "The platforms and devices that other people are building are not really appropriate for newspapers and magazines," Hearst Interactive president Kenneth Bronfin said. "We are going to create an entity by publishers, for publishers."
• Whitacre begins GM shakeout. Interim GM Chairman Ed Whitacre will announce new responsibilities for Vice Chairman Bob Lutz as part of an overhaul of the management team this morning, sources say. Whitacre is building a team to run the company until a replacement is hired, in a push to make GM more nimble and to hold employees accountable.
• AIG hopes to raise up to $10B in AIA IPO. AIG (AIG) selected Hong Kong's stock exchange to list its Asian life insurance unit, AIA Group, an apparent sign the troubled insurer will go ahead with an IPO in the hopes of raising up to $10B. Preparations for the IPO had stalled since Robert Benmosche took the helm in August; Benmosche has repeatedly said AIG is in no hurry to sell assets at unfavorable prices. "The planned listing is in the best interests of policyholders, distribution partners, AIG shareholders and U.S. taxpayers," Benmosche said. "AIA's roots are in Asia, and a listing in Hong Kong is a natural choice." AIA left the date open.
• Banks back CME CDS clearing house. CME Group (CME), the world's dominant derivatives exchange, said it will have a clearing house for the $26T credit default swap market up and running by December 15, after securing commitments from 8 of the largest credit derivative dealers: Barclays Capital (BCS), Citigroup (C), Credit Suisse , Deutsche Bank (DB), Goldman (GS), JPMorgan (JPM), Morgan Stanley (MS) and UBS (UBS).
  The launch coincides with legislative efforts to put the $450T derivative markets on a tighter regulatory leash and elevate the role of central clearing houses to reduce risks posed by the default of a major swaps dealer, and the web of exposure the contracts create among large financial companies.
• Google gets into the DNS business. Google (GOOG) unveiled Google Public DNS, a new service that will allow web surfers to use Google as their DNS (Domain Name System) provider. DNS is what translates understandable domain names into the binary identifiers network routers require. The benefits to users are a theoretically faster and more stable browsing experience, and more security against malware type sites. The benefit to Google appears to be a huge store of data to mine, and potential new revenue streams. The service competes directly with OpenDNS, backed by private-equity firms Sequoia and Greylock.
• GM to expand in India. As it struggles to shed brands and find a new CEO, General Motors plans to expand its presence in the lucrative Indian market through a JV with China's SAIC Motor; sources say a deal will be announced Friday. Together, the two companies, which already make and sell vehicles in China, plan to produce passenger vehicles already made by GM in India, including the Chevrolet Spark. The expected move is significant because it provides GM, which already has a foothold in India, with additional resources through the cash-rich, state-owned Chinese auto maker.
• Banks may get capital reprieve. U.S. banks such as Citigroup (C) and JPMorgan (JPM) may get much-sought breathing room to phase in capital requirements, rather than be forced to raise capital immediately when new rules take effect next month, according to FDIC chief Sheila Bair. The rule, which the Financial Accounting Standards Board approved in May, eliminates off-balance-sheet trusts known as Qualifying Special Purpose Entities and will force banks to move billions of dollars of assets and liabilities onto their books. Banks have argued the rule would force them to cut financing for securitizations that would directly impact consumers through credit-card lending, residential mortgages and student loans. "Giving some breathing room in terms of when they can transition in is acceptable to us," Bair said in an interview yesterday.
• Delay for GE, Comcast marriage? While GE (GE) and Comcast (CMCSA) prepare for their nuptials, industry sources warn it may take up to a year to tie the knot because they first must pass a potentially tough regulatory review. The process could force Comcast to give cable and satellite competitors like Verizon (VZ) and DISH Network (DISH) access to NBCU's TV shows and movies. Herb Kohl, chair of the Senate's antitrust and competition policy subcommittee, called on regulators to "ensure that all content providers are treated fairly on the Comcast platform." Experts expect the deal will ultimately get the green light.
• Biogen ups offer for Facet. Aiming to force the hand of Facet Biotech (FACT), Biogen Idec (BIIB) - the world's largest maker of MS drugs - said it would pay $493M, or $17.50/share for the company, and that this was its "best and final" offer. The bid represents a 98% premium over the company's closing share price of $8.82 the day before the bid was initially announced in September. Facet and Biogen have been jointly developing daclizumab for MS and volociximab for cancer since 2005. Biogen CEO James Mullen took the bid directly to shareholders after the board rebuffed him previously. He warned failure to complete a transaction could cause Facet shares to "decline significantly toward pre-offer levels." The offer expires Dec. 16.
• Service sector shrinks. Signs of recovery in the service sector continued to lag manufacturing, as ISM's index of non- manufacturing businesses unexpectedly fell to a reading of 48.7 from 50.6 in October and short of consensus estimates of 51.5 (below 50 indicates contraction). Service businesses make up almost 90% of the U.S. economy. On Friday, the Labor Department is expected to report that the U.S. economy lost 125,000 jobs in November, following a 190,000 decline the month earlier, though some economists say the drop in be as low as 50,000, or even a small rise. The jobless rate probably stayed at 10.2%, the highest level in 26 years.
• Wealthy may forfeit tax exemption. America's wealthy will not be able to benefit from a tax exemption that was slated for next year, and will continue to be subject to a tax rate as high as 45%. The House voted 225-200 to indefinitely extend the current tax, to prevent the federal estate tax from expiring on Dec. 31, and to permanently exempt couples' fortunes of up to $7M. The estate tax was slated to disappear in 2010 and be reinstated in 2011 at the previous higher top rate of 55% for estates valued at more than $1M. The measure now goes to the Senate, which plans to consider its own version.
• Luxury homebuilder loss widens. Luxury homebuilder Toll Brothers said its Q4 loss widened to $111.4M from a year-earlier loss of $78.8M, blaming rising unemployment and other factors. Even so, it said conditions were brightening somewhat as the cancellation rate declined and contract signings picked up. Last month, Toll said new contracts jumped 42% for the latest quarter. Pulte Homes (PHM) and D.R. Horton (DHI), the nation's No. 1 and No. 2 home builders, also said orders jumped last month, even though all have been hurt by land-related charges as land and home values have fallen. Most homebuilders remain under pressure due to rising foreclosures, unemployment and inventory levels.

Earnings: Fri. Before Open

• Big Lots (BIG): Q3 EPS of $0.27 beats by $0.09. Revenue of $1.04B (+1.3%) in-line. Sees 2010 EPS of $2.15-2.20 vs. $2.01 consensus. Authorizes $150M share buyback. (PR)

Earnings: Thur. After Close

• Marvell Technology Group (MRVL): Q3 EPS of $0.35 beats by $0.08. Revenue of $803M (+2%) vs. $770M. Shares +0.9% AH. (PR)
• Novell (NOVL): FQ4 EPS of $0.11 beats by $0.04. Revenue of $216M (-12%) in-line. Sees FQ1 revenue of $200M-210M vs. $214M. Shares -3.4% AH. (PR)
• Smith & Wesson (SWHC): FQ2 EPS of $0.10 beats by $0.01. Revenue of $109M (+49%) vs. $105M. Sees FQ3 revenue of $90M-95M vs. $105M. Shares -9.9% AH. (PR)

Today's Markets

Shanghai moved higher in an otherwise mixed day in Asia. Europe stocks are lower at midday, reflecting Thursday's late-day selloff in the U.S. Futures are flat ahead of the much-awaited payroll data.

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• BofA's $45B TARP exit. Less than a year after two multibillion-dollar government bailouts, a resurgent Bank of America (BAC) said it would repay all $45B of its TARP loans, underscoring the banking industry's swift recovery from the gravest financial crisis since the Depression. BofA plans to use $26.2B in "excess liquidity," and raise another $18.8B by selling "common equivalent securities" which will convert to common shares; the repayment will save it $3.6B/year in dividend costs. The bank also agreed to boost its liquidity by $4B through asset sales, and save another $1.7B by issuing restricted shares in lieu of compensation. Post payback, BofA's Tier 1 capital ratio will be 11% and its Tier 1 Common capital ratio will be 8.5%. Removing the TARP stigma should help BofA in its quest to find a new CEO. The deal was largely engineered by Greg Curl, chief risk officer and a candidate to replace Lewis. BAC +4.4% premarket.
• Comcast and GE tie NBCU knot. GE (GE) and Comcast (CMCSA) made it official, announcing a $30B agreement to shift control of NBC Universal from GE to the Comcast. Details were as expected: Comcast will control 51% of the new entity, for which it will pay $6B in cash and throw in its content assets. GE will cough up NBCU along with its $9B in debt, and will buy out Vivendi's (VIVDY.PK) 20% stake in NBCU for $5.8B. Jeff Zucker, who will lead the new NBCU, commented: "Combining the assets of NBCU, ranging from our suite of cable properties and two broadcast networks to a legendary film studio and global theme park business, with the content assets and resources of Comcast, will enable us to continue to thrive in an ever-changing media landscape." In this morning's New York Times, Andrew Ross Sorkin and Tim Arango tell the tale of Comcast's (CMCSA) closelipped courtship of NBC Universal (GE).
• Goldman: Because we're better. Goldman Sachs (GS) has begun meeting with key shareholders in an effort to ward off an investor backlash over its record compensation pool, a first for the secretive investment bank. According to a senior executive, shareholder response to shrinking the bank's compensation has been "almost uniformly no," and spokesman Lucas van Praag says the company's "puzzled" at the suggestion shareholders are looking for concessions. In a document called Goldman Sachs Compensation Practices (.pdf), Goldman notes it has "substantially outperformed peers from a shareholder value creation perspective," adding that it has "still been able to pay out more on average per employee" while generating "the highest average EPS growth rate."
• American's $1.1B offer to JAL tops Delta. American Airlines (AMR), members of its Oneworld alliance, and private-equity firm TPG offered to invest up to $1.1B in troubled Japan Airlines, a deal they argued is "vastly superior" to a $1B offer from Delta Air Lines (DAL) and its SkyTeam alliance. JAL is already a member of Oneworld, and American said staying the course would result in a substantial increase in revenue in coming years, which makes its offer worth an effective $1.8B, while a JAL-Delta tie-up would face severe regulatory opposition “because of the stranglehold this combination would hold on Japan-USA travel." Delta president Edward Bastian told reporters SkyTeam will consider boosting its offer. Despite deep losses and $15B in debt, JAL remains Japan's top carrier.
• Rechanneling TARP. With the financial industry stabilized, and many banks having or about to repay the government's aid with interest, the government is in talks with lawmakers to use unspent TARP money to offset jobs spending and aid the long-term unemployed. According to the Treasury, the $700B bailout fund created in October 2008 has a balance exceeding $200B, not including the $45B BofA (BAC) said Wednesday it will repay. In testimony Wednesday, Treasury Secretary Tim Geithner warned against shuttering the program given continued weakness in some markets, but said much of the money would not be needed: "I think we are at the point now we're going to be able to return very, very substantial amounts of money to address the critical economic needs, long-term fiscal needs, of this country."
• Senator questions AIG debt swap. Sen. Chuck Grassley challenged the Fed's decision to exchange AIG's (AIG) debt for shares, asking the Treasury and New York Fed to explain how taxpayers get a better deal from holding equity instead of debt. AIG on Tuesday sealed a pact with the New York Fed to slash its debt under a credit facility by more than half, to $17B, a move Grassley said in a letter puts "billions of dollars in taxpayer money in jeopardy." Grassley also noted that AIG recently failed to make dividend payments, giving the Treasury rights to name at least two members to its board, and asked about the status of its efforts to find candidates.
• CME on verge of CDS clearing deal. Sources say CME Group (CME) is near a breakthrough deal with some of the world's biggest banks to clear credit default swaps, capping more than a year of negotiations. The CME has held talks with the world's main OTC dealers - Barclays Capital (BCS), Citigroup (C), Goldman Sachs (GS), JP Morgan (JPM), Deutsche Bank (DB), Morgan Stanley (MS), UBS (UBS) and Credit Suisse (CS) - though it remains unclear how many of them are ready to ink the proposed deal, which would see the CME begin clearing CDS starting December 15.
• Astra to pay up to $1.24B for Targacept's antidepressant. AstraZeneca (AZ) said it has bought rights to Targacept's (TRGT) experimental antidepressant (TC-5214) in a deal worth up to $1.24B, boosting its pipeline and slapping a big endorsement on its U.S. biotech partner's drug. AstraZeneca badly needs new medicines to replace those about to lose their patents, like heartburn treatment Nexium and schizophrenia drug Seroquel. Targacept will receive $200M upfront, pending regulatory approval, $540M for reaching first commercial sale, and another $500M for hitting sales milestones.
• BoE mulls dealing in corporate debt. The Bank of England said it may boost liquidity in corporate-bond markets by acting as a dealer. While conditions in the primary U.K. corporate-bond market have improved, trading conditions in secondary markets "continue to be somewhat restricted," the Bank said. "The changes proposed today are aimed at improving secondary market liquidity by the Fund operating as a seller, as well as a buyer, of bonds."
• Nov. jobs gain? ADP's pre-NFP employment report (.pdf) counted 169K private-sector job losses in November (vs. -150K expected, -203K in October), the eighth straight month during which the decline in employment moderated. "Although overall economic activity is stabilizing, employment usually trails economic activity, so it is likely to decline for at least a few more months," ADP said. Consensus for tomorrow's nonfarm payroll data, which includes government hiring, is for a decline of 125,000, but economists say the drop in jobs could be as low as 50,000, or even a small rise, due to the year-on-year comparison with last November's 610,000, which included the Lehman collapse.

Earnings: Before Open

• A-Power Energy (APWR): Q3 EPS of $0.28 misses by $0.03. Revenue of $96.7M (+13.2%) vs. $113.4M. (PR)
• Toll Brothers (TOL): FQ4 EPS of -$0.68 misses by $0.22. Revenue of $487M (-29.6%) vs. $450M. Net signed contracts +42% in units to 765 and +62% in dollars to $431M. (PR)

Earnings: Wed. After Close

• Aeropostale (ARO): Q3 EPS of $0.92 beats by $0.01. Revenue of $568M (+18%) vs. $566M. Same-store sales up 7%. Shares -8% AH. (PR)
• Collective Brands (PSS): Q3 EPS of $0.61 beats by $0.12. Revenue of $867M (+1%) vs. $848M. Same-store sales up 3.1%. Shares +7.2% AH. (PR)
• Synopsys (SNPS): FQ4 EPS of $0.33 beats by $0.01. Revenue of $338M (-4%) vs. $339M. Sees FQ1 EPS of $0.38-0.40 vs. $0.41, and full-year EPS of $1.52-1.62 vs. $1.68. Shares -7.8% AH. (PR)

Today's Markets

Tokyo soared 3.8% Thursday, leading Asia gains. Europe stocks and U.S. futures are slightly higher.

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See the rest of the story here.

Theflyonthewall.com is Wall Street's specialist in breaking equity news. Veteran traders build a proprietary feed of news that's faster and more relevant than any other source. Try us for free and discover for yourself.

See the rest of the story here.

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Below are interesting large-cap stocks on the NYSE and NASDAQ with the highest EPS estimate for 2010.

The consensus EPS for Google Inc (NASDAQ: GOOG) is $26.32 for FY10. GOOG has a market capitalization of $184.97 billion. Benchmark upgraded GOOG from “hold” to “buy.”

The consensus EPS for Goldman Sachs Group Inc (NYSE: GS) is $18.84 for FY10. GS has a market capitalization of $87.22 billion. JMP Securities upgraded GS from “market perform” to “market outperform.”

The consensus EPS for Rio Tinto plc (NYSE: RTP) is $16.34 for FY10. RTP has a market capitalization of $80.19 billion. BMO Capital Markets upgraded RTP from “market perform” to “outperform.”

The consensus EPS for CME Group Inc. (NASDAQ: CME) is $15.48 for FY10. CME has a market capitalization of $21.84 billion. Susquehanna Financial initiated coverage of CME with a “positive” rating.

The consensus EPS for CNOOC Ltd (NYSE: CEO) is $15.46 for FY10. CEO has a market capitalization of $6921.05 billion. CEO has a twelve-month-trailing ROE of 18.52%.

Buyers decided to make a late appearance as we wrapped up trading for the month of November. Volume finished at 3.9 Billion shares on the NYSE and 1.95 Billion shares over on the NASDAQ. Some of this morning’s bullish Wall Street calls helped lift stocks like Aflac (AFL), U.S. Bancorp (USB) and U.S. Steel (X). Financials [...]

Below are interesting large-cap stocks on the NYSE and NASDAQ that have highest operating margins.

Annaly Capital Management Inc (NYSE: NLY) has the operating margin of 86.11 and market capitalization of $10.01 billion. Sterne Agee upgraded NLY from “neutral” to “buy.”

CME Group Inc (NYSE: CME) has the operating margin of 61.18 and market capitalization of $21.49 billion. Susquehanna Financial initiated coverage of CME with a “positive” rating.

Deere & Co (NYSE: DE) has the operating margin of 56.73 and market capitalization of $10.48 billion. RBC Capital Markets initiated coverage of DE with a “sector perform” rating.

Diamond Offshore Drilling Inc (NYSE: DO) has the operating margin of 52.36 and market capitalization of $13.58 billion. Jesup & Lamont upgraded DO from “hold” to “buy.”

Visa Inc (NYSE: V) has the operating margin of 52.19 and market capitalization of $62.24 billion. Argus upgraded V “hold” to “buy.”

Gold has long been favored by a fringe of the investment world, but this year some of the world's leading hedge-fund managers have loaded up on the precious metal amid concern government efforts to avoid another Great Depression that could undermine major currencies and fuel rampant inflation.

By Charles AbbottWASHINGTON (Reuters) - Congress ought to clarify if a proposed super-regulator of the U.S. financial system should be an overlapping overseer of securities and futures exchanges, the chief futures regulator said on Tuesday.Chairman Gary Gensler of the Commodity Futures Trading Commission spoke to the House Agriculture Committee at...

By Charles AbbottWASHINGTON (Reuters) - Congress ought to clarify if a proposed super-regulator of the U.S. financial system should be an overlapping overseer of securities and futures exchanges, the chief futures regulator said on Tuesday.Chairman Gary Gensler of the Commodity Futures Trading Commission spoke to the House Agriculture Committee at...