Today's Headlines

Bloomberg:

• Obama Administration is 'Open' to Talks on Extending Tax Cuts, Gibbs Says. The Obama administration is “open” to negotiations on extending tax cuts for upper-income individuals in order to win extensions for middle-income families, White House press secretary Robert Gibbs said. Obama is “open to having that discussion” with Democratic and Republican leaders, Gibbs said at a briefing. The president still “does not believe it’s a good idea,” he said. The remarks by Gibbs reinforce statements made by Obama yesterday, following midterm elections in which Republicans gained control of the House and narrowed the Democratic majority in the Senate.
• High-Yield Debt Risk Index Drops to Six-Month Low on Stimulus. The cost of insuring against default on high-yield corporate bonds fell to the lowest level in six months in Europe after the U.S. Federal Reserve said it will expand record measures to bolster economic recovery. The Markit iTraxx Crossover Index of credit-default swaps on 50 companies with mostly junk credit ratings decreased 17 basis points to 439, the lowest level since May 3, according to JPMorgan Chase & Co. at 3 p.m. in London. The Markit iTraxx Europe Index of 125 companies with investment-grade ratings decreased 3 basis points to 96.25, JPMorgan prices show. Credit-default swaps on Ireland surged 30 basis points to a record 590, and contracts on Allied Irish Banks Plc’s senior debt jumped 62 to an all-time high 816, according to data provider CMA. The Markit iTraxx SovX Western Europe Index of swaps on 15 governments from Greece to Germany rose 2.5 basis points to 167.5, near to the June 4 record 168.5. The Markit iTraxx Financial Index linked to the senior debt of 25 banks and insurers held near a one-month high at 129.
• U.S. Commercial Real Estate Rents to Rise in 2011, Cushman's Mosler Says. Commercial real estate rents are poised to rise in 2011 after reaching a low this year, according to Bruce Mosler, co-chairman of Cushman & Wakefield Inc., the largest closely held property services company. “The market has bottomed,” Mosler said today at the Real Estate Briefing hosted by Bloomberg Link in New York. “We can expect to see rental appreciation next year.”
• Commodities Jump to a Two-Year High on Expanded Federal Reserve Stimulus. Commodities rose to a two-year high after the Federal Reserve said it would expand steps to boost the world’s largest economy, spurring demand for raw materials as a hedge against inflation. The Standard & Poor’s GSCI Index of 24 commodities gained as much as 1.5 percent to 586.046 points, the highest level since Oct. 3, 2008. It was at 585.241 points at 11:47 a.m. in London. Palladium climbed to the highest price since 2001, and white sugar reached a 21-year high. The U.S. Dollar Index fell to the lowest level in almost 11 months. A weaker dollar makes commodities priced in the currency cheaper in terms of other monies and fuels demand for raw materials as an alternative investment. Gold for immediate delivery added $14.72, or 1.1 percent, to $1,363.27 an ounce. Futures for December delivery gained $25.10, or 1.9 percent, to $1,362.70, on course for the biggest closing jump since Sept. 14. Silver for immediate delivery rose 45.5 cents, or 1.8 percent, to $25.315 an ounce, the highest level since March 1980. Futures for December delivery advanced 87.9 cents, or 3.6 percent, to $25.315 an ounce. Immediate-delivery palladium touched $673.25 an ounce, the highest level since May 9, 2001. Wheat for December delivery gained 9 cents, or 1.3 percent, to $6.9925 a bushel on the Chicago Board of Trade. December- delivery corn added 8 cents, or 1.4 percent, to $5.89 a bushel and soybeans for January delivery advanced 17.75 cents, or 1.4 percent, to $12.5525 a bushel. January-delivery rice jumped 25 cents, or 1.7 percent, to $14.795 per 100 pounds. White, or refined, sugar for March delivery added $20.10, or 2.7 percent, to $768.90 a metric ton on NYSE Liffe in London after reaching $774.40, the highest level for a most-active contract for data compiled by Bloomberg going back to 1989.
• Ireland Plans 6 Billion-Euro '11 Budget Cut to Stave Off Bailout. Irish Finance Minister Brian Lenihan plans to slash the budget deficit by 6 billion euros ($8.5 billion) in 2011 as he fights to save the nation’s economic independence. The budget shortfall will be reduced to between 9.25 percent and 9.5 percent of gross domestic product next year, the Finance Ministry in Dublin said in a statement today. The underlying deficit this year will be 11.9 percent, or 32 percent when the costs of the bank bailout is included. The savings amount to about 3.6 percent of the economy and Lenihan will publish details on Dec. 7. “It’s ambitious. It’s intended to deliver a clear statement of intent,” said Austin Hughes, chief economist at KBC Bank Ireland in Dublin. “The critical question can it be attained. We need to see a little bit more in terms of the detail.”
• Trichet Signals Irish Budget Plans May Calm Investors Over Fiscal Health. European Central Bank President Jean- Claude Trichet signaled that budget plans to be announced later today by the Irish government may calm some investors’ concerns about the country’s fiscal health. “I have no reason to think that observors will be disappointed,” Trichet said at a press conference in Frankfurt. “The front loading of the program is of extreme importance.” The government will publish new economic forecasts for the period through 2014 at 4:30 p.m. in Dublin today, the Finance Ministry said in an e-mailed statement.
• BOE Declines to Follow Fed as Officials Keep Stimulus on Hold. The Bank of England kept its emergency stimulus program unchanged as the strength of the U.K. recovery persuaded officials not to join the Federal Reserve in buying more government bonds.
• ECB Keeps Rates at Record Low as Fed Embarks on Further Easing. The European Central Bank kept interest rates at a record low after the Federal Reserve embarked on a new round of quantitative easing and tensions increased on Europe’s sovereign-debt markets. The ECB’s Governing Council in Frankfurt set the benchmark lending rate at 1 percent for a 19th month, as predicted by all 55 economists in a Bloomberg News survey. Economists said last night’s decision by the Fed to buy an additional $600 billion of Treasuries may drive the euro higher, undermining Europe’s recovery and forcing the ECB to delay the withdrawal of its own stimulus measures.
• GAP(GPS), Limited Brands(LTD) Post October Sales Gains After Discounts. Sales at retailers Limited Brands Inc., the owner of the Victoria’s Secret chain, and Gap Inc. grew more than analysts estimated in October as discounting to clear inventory for the holiday season brought out consumers. Limited said today that sales at stores open at least a year rose 9 percent, exceeding the 6.3 percent average of analysts’ estimates compiled by Retail Metrics Inc. Gap, based in San Francisco, said so-called same-store sales rose 2 percent, while analysts projected a decline of 2.8 percent. Retailers beat predictions in August and September as discounts boosted back-to-school shopping. Promotions lured consumers last month as well, helping some chains such as Gap that had weekly sales, said Brian Sozzi, a retail analyst for Wall Street Strategies Inc. in New York. “The consumer is responding more to promotions,” Sozzi said. “If you had the right promotions, you got the sales.”
• Commercial-Mortgage Index Soars as BlackRock(BLK) Loss Estimate Adds Confidence. An index tied to commercial property debt soared to the highest in more than two years after BlackRock Inc. projected losses on the securities won’t be as severe as investors expected. The price of a Markit Group Ltd. CMBX index linked to junior AAA commercial-mortgage bonds, many of which have had ratings cuts, increased as much as 1.75 percentage points to 77.46 yesterday, according to administrator Markit. Credit- default swap contracts on the index, which rise as investor confidence improves, are trading at the highest since September 2008, the data show.

Wall Street Journal:

• Milton Friedman vs. the Fed. The Nobel laureate would never have endorsed increasing inflation to stimulate the economy.
• CT Scans Aid Lung-Cancer Screening, Study Shows. The use of computed tomography, or CT, scans as a screening tool for lung cancer showed fewer people died compared to those screened with a chest X-ray, according to the results of a large-scale study released Thursday.
• Obama Sets Up Bipartisan Talks, Urges Action on Taxes. President Barack Obama said Thursday he wants immediate action on controversial tax cuts and an arms-reduction treaty as he seeks to change the tone in Washington after voters battered his party in congressional elections earlier this week. Mr. Obama, speaking at the White House surrounded by his cabinet members, said voters sent a clear message: "They want us to focus on the economy, on jobs and moving this country forward." Voters also wanted to see a change in tone in how Washington operates, he said. Mr. Obama has invited leaders of both parties to the White House for a meeting Nov. 18 so they can start hammering out how they can lift the economic malaise and work together in the new political climate. The country can't afford "squabbling," he said.

CNBC:

• US Debt Reduction Plan 'Essential': IMF Chief Economist. The US Congress should focus on a medium-term plan to cut government debt to dispel fears about the world's biggest economy, Olivier Blanchard, IMF chief economist, told CNBC Thursday.
• Risk of Inflation, Potential 'Commodity Shock': Analysts. Rising inflation in emerging markets, coupled with marked increases in commodity prices, could hurt developed economies, as companies struggle to keep input costs down while seeing precious investment dollars heading overseas, analysts told CNBC. "I think it's the single most important issue that we face in the markets today," Philippa Malmgren, president of Principalis Asset Management, told CNBC. "We've got inflation ripping through the emerging markets. That's going to push input costs up for the entire Western manufacturing establishment." The Federal Reserve committed to injecting a further $600 billion into the economy Wednesday, through the purchase of long-dated government bonds, in a bid to stimulate growth. But the liquidity generated by the Fed's quantitative easing does not necessarily mean extra liquidity for the domestic U.S. economy, Hans Redeker, global head of foreign exchange strategy at BNP Paribas, told CNBC. "What is happening is you create dollars, these dollars don't want to say in the United States. So you have a wave of dollar liquidity moving for example into the Hong Kong real estate market," he said. "We are creating U.S. dollar liquidity in the wrong places in the world." That liquidity can have a negative impact in emerging market economies because of its inflationary pressures, Redeker said.

Business Insider:

• Today in Athens: Firefighters Brawl With Riot Police And There Are Bombs Everywhere.
• Peter Thiel's Hedge Fund Clarium Is Slammed and Now Down 17% YTD.
• Casino Mogul Calls the Bottom on Vegas, And Slams the Government on Freewheeling Conference Call.
  

MarketWatch.com:

• New Applications for Jobless Benefits Rise. Some 457,000 workers filed new applications for unemployment benefits last week, an increase of 20,000, indicating that employers are still reluctant to hire.

New York Times:

• Goldman(GS) Sees $26 Billion Potential Losses at Top U.S. Banks. The four largest U.S. banks face potential losses of $26 billion over the next several years from their exposure to private-label mortgages and potential losses from delinquency, analysts at Goldman Sachs said.

GuruFocus.com:

• Julian Robertson Likes Apple(AAPL) and Google(GOOG). Hedge fund legend Julian Robertson disclosed that he has ridden the Apple bull as he talked with CNBC's Erin Burnett. Right now, Robertson thinks Apple has further up to go. He said it is very reasonably valued at 18x forward earnings and has everything working for it. He sees Apple fetching a P/E ratio of 25 to 30 which would give it a share price between $400 and $475, sharply higher than where shares are currently trading. (video)
  

SeekingAlpha:

• 9 Reasons Why Quantitative Easing is Bad for the U.S. Economy.

Politico:

• Can Barack Obama Pull a Bill Clinton? A young Democratic president comes into office with big ambitions, gets knocked back on his heels by Republicans in the midterm elections, then makes some deft moves to recapture the center and waltzes to reelection two years later.
• John Boehner's Boys: The New Power Club. John Boehner has no plans — or capacity — to rule the House like Nancy Pelosi did. It’s neither his style to centralize power in the speaker’s office like she did nor his strength to win his way through brute force or fear. But make no mistake: Boehner will assume control of the House with his own elaborate plan for running the GOP on his terms. The plan includes fiercely loyal allies placed strategically throughout the House and his potential enemies placed right where he can better control them, according to Republicans close to Boehner.

Reuters:

• US Republicans to Attack Healthcare Law Funding. U.S. congressional Republicans will try to repeal President Barack Obama's healthcare law next year but their leader in the Senate acknowledged on Thursday they will likely have to settle for far more modest changes.
• Global Economic Activity Accelerates in October - PMI. Activity in the global economy accelerated in October for the first time since April, as rates of expansion improved in both manufacturing and services, business surveys showed on Thursday. The Global Total Output index, produced by JP Morgan with research and supply management organisations, jumped to 54.8 last month from 52.6 in September, spending its fifteenth month above the 50 mark that divides growth from contraction. The Global Services index bounced to 54.6 in October from 52.3 in the previous month.

NDTV:

• 34 Warships Sent From US for Obama Visit to India.The White House will, of course, stay in Washington but the heart of the famous building will move to India when President Barack Obama lands in Mumbai on Saturday. Communications set-up, nuclear button, a fleet of limousines and majority of the White House staff will be in India accompanying of the President on this three-day visit that will cover Mumbai and Delhi. He will also be protected by a fleet of 34 warships, including an aircraft carrier, which will patrol the sea lanes off the Mumbai coast during his two-day stay there beginning Saturday. Two jets, armed with advanced communication and security systems, and a fleet of over 40 cars will be part of Obamas convoy. Around 800 rooms have been booked for the President and his entourage in Taj Hotel and Hyatt.