- Rajoy Faces Bailout Split With Monti at Madrid Meeting. Italian Prime Minister Mario Monti and Spanish counterpart Mariano Rajoy may try to mask a growing divide over Europe’s new bailout strategy when they meet in Madrid today. While both have jointly argued against extra budget austerity as the price for help from the European Central Bank, their interests diverge when it comes to whether they should ask for assistance together. A go-it-alone strategy by Spain would probably cut Italy’s borrowing costs while leaving Rajoy to weather the political flak of seeking emergency funds. “Rajoy was probably pressed by Monti in August to accept a pre-emptive” bailout, said Gilles Moec, co-chief European economist at Deutsche Bank AG in London. “It would have made things so much smoother in Europe and for Italy as well. Rajoy is very much following his own route now.”
- UBS Said to Plan 10,000 Job Cuts, Investment Bank Shrinks. UBS AG’s decision to cut as many as 10,000 jobs and retreat from capital-intensive trading businesses will help position Switzerland’s largest bank to return more funds to shareholders.
- BOE’s Bean Cautions Final-Quarter Growth May Be Weak. Bank of England Deputy Governor Charles Bean cautioned against over-optimism following third- quarter gross domestic product data and said U.K. growth may be weak in the final three months of the year. The figures were “stronger than we expected, but we should avoid getting over-excited,” Bean said in an interview with Sky News television yesterday. “It’s quite possible that we see weak growth in the next quarter. The big picture is of an economy that’s been bumping along the bottom.”
- China’s Slowing Revenue Gains Seen Limiting Spending. China’s government spent more than planned in the first nine months of the year, and revenue gains moderated, leaving little room for public outlays to stoke the economy this quarter without an expansion of the budget. Fiscal revenue rose 10.9 percent in January-to-September from a year earlier to 9.06 trillion yuan ($1.5 trillion), compared with a 29.5 percent gain in the same period in 2011, Ministry of Finance data showed this month. Spending in the January-September period rose 21.1 percent, higher than the targeted 14.1 percent rise for the full year, leaving a surplus of about half last year’s level. “The effects of China’s fiscal policy were expansionary in the first nine months but will be neutral in the fourth quarter as spending won’t be higher than a year earlier,” said Ding Shuang, senior China economist with Citigroup Inc. in Hong Kong, who formerly worked at the People’s Bank of China and International Monetary Fund.
- China’s Stocks Retreat to One-Month Low; Yanzhou Coal Declines. China’s stocks fell, extending last week’s decline, as Yanzhou Coal Mining Co. reported a quarterly loss and China Southern Airlines Co. posted lower profit. Yanzhou Coal, China’s fourth-largest miner of the fuel, lost 0.9 percent. China Southern, the nation’s biggest carrier by fleet size, slid 1.4 percent. Weichai Power Co., a maker of high-speed heavy-duty diesel engines, retreated 3.3 percent after profit decreased. “The market has yet to digest the bad impact of third- quarter earnings and sentiment is cautious,” said Li Jun, a strategist at Central China Securities Co. in Shanghai.
- Korea’s Manufacturer Confidence Falls for Second Month. South Korean manufacturers’ confidence fell for the second straight month as slowing economic growth weighed on sentiment. An index measuring expectations for November fell to 70 from 72 in October, the Bank of Korea said in a statement in Seoul today. A measure of expectations at non-manufacturing companies was unchanged from October at 67, with any number below 100 indicating that pessimists outnumber optimists. “The Korean economy still faces considerable difficulty in the coming months,” Yoon Eun Hye, an economist at Standard Chartered Plc in Seoul, said before the release.
- H.K. Imposes Property Tax on Non-Locals on Bubble Risks. Hong Kong Chief Executive Leung Chun-ying imposed the city’s first property tax targeted at overseas buyers as U.S. monetary easing and record-low interest rates boost the risk of a housing bubble. Non-local and corporate buyers will have to pay a 15 percent tax upon purchase, Financial Secretary John Tsang told reporters at a press conference on Oct. 26. The government also raised a resale tax on property by about 5 percentage points and extended the period during which it will apply to three years from two.
- Will 3D Printing Kill Asia's Manufacturing Sector? (video)
- Speculators Reduce Wagers as Annual Advance Erased: Commodities. Speculators lowered bullish wagers on commodities for the third straight week, the longest streak since April, as prices erased this year’s gain on mounting concern about slowing economic growth. Hedge funds cut net-long positions across 18 U.S. futures and options by 0.2 percent to 1.18 million contracts in the week ended Oct. 23, the lowest since July 24, U.S. Commodity Futures Trading Commission data show. Copper holdings fell the most in seven weeks, and sugar wagers dropped to a one-month low. Bullish bets on gold slumped the most in three months.
- Markets Go Dark Ahead of Storm. U.S. stock and options markets will close Monday due to Hurricane Sandy, exchanges and regulators said, and there was a chance the markets would remain closed through Tuesday. Earlier in the day Sunday, exchanges had decided to close their trading floors but stay open for electronic trading. However, exchanges, regulators and trading firms agreed late Sunday to close all U.S. stock markets.
- Hurricane Sandy: Live Updates.
- Europe's Crisis Spawns Calls for a Breakup—of Spain. This vibrant northern region of Catalonia has long been known as the "factory of Spain" for generating wealth that helped sustain the entire nation. Now Catalonia, beaten down by years of recession, has become the battleground in what threatens to become an economic civil war. In protests large and small, hundreds of thousands of Catalans are embracing a stark proposition: Only by breaking ties with Spain and becoming an independent country can Catalonia free itself from economic malaise.
- Catalonia Flies Flag for Secession from Spain. (video)
- Euro-Skeptics in Finland Are Projected to Make Gains. The euro-skeptic Finns Party likely made good on pollster predictions of being the biggest gainer in Finland's local elections Sunday as the fiercely-nationalistic party continued to gain popularity compared with previous elections. The party surged past its 2008 municipal election result in gaining 12.3% of votes, according to preliminary data released by the nation's justice ministry. The justice ministry numbers were based on 99.8% of votes being counted.
- China firms leave bills unpaid as economy slows. Coal mining, steel and machinery firms feeling the greatest pinch.
Fox News:Business Insider:
- LATEST MAP AND NEWS ON HURRICANE SANDY.
- Watch Hurricane Sandy Live From Every Corner Of New York!
- How The Fiscal Cliff Could Hit The Economy Much Harder Than People Expect.
- German Finance Minister Says No Way To A New Greek Debt Haircut.
- Netherlands And Germany Are Completely Unsure About Greece Reaching Its Deficit Targets.
- New Poll A From Left-Leaning Firm Is Pretty Brutal For Obama. Obama's approval-to-disapproval rating sits at just 44-52, which is actually worse than Gallup's tracking on Saturday. Romney leads the self-identified Independent vote by an astounding 16 points. Among this crucial group, Obama's approval-to-disapproval is 33-60, and Romney's favorability is 53-37.
- The Controversial 'Lagarde List' Has Leaked, And It's Bad News For The Greek Prime Minister.
- The Syrian Battlefield Is Expanding And Neither Side Shows Signs Of Stopping.
- A Close Look At Iran's Growing Military Arsenal.
- Golden Dawn MPs Are Taking The Nazi Comparisons To A Whole New Level In Greece.
- See Where People Were Killed During Chicago's Deadliest Year.
- Obama's Approval Rating Has Collapsed In The Past 3 Days.
- On Europe's Three Year Insolvency Anniversary - The Definitive Interactive Infographic.
- As Thousands Of Italians March Against Austerity On "No Monti Day", Berlusconi Threatens To Scuttle Monti Government.
- GDP - The Warning Signs From Exports. (graphs)
- China Warns It Will Respond "Forcefully" To Japanese Violation Of Its "Territorial Sovereignty".
- Why The Real Earnings Picture Is Bad And Getting Worse.
- Charting The Undoing Of Credit-Fueled Globalization.
- On The Fullness And Boldness Of QE's Manipulation Of American's Behavior.
- European Union Exit? Concerns Grow for Britain. Is Britain moving inexorably toward the European Union’s exit door?
- Junk Bonds Grow More Popular and Turn Even Riskier.
Des Moines Register:
- The Des Moines Register endorsement: Mitt Romney offers a fresh economic vision. Ten months ago this newspaper endorsed former Massachusetts Gov. Mitt Romney for the Republican nomination for president. An overarching consideration was which of the party’s candidates could we see occupying the White House, and there was no question that Romney was qualified for the job. Now, in the closing days of the general election campaign, the question is which of the two contenders deserves to be the next president of the United States.
- Governments to debate 50 billion euro cut to EU budget. European Union governments will debate a cut of at least 50 billion euros this week as the starting point for negotiations on the bloc's proposed 1 trillion-euro ($1.3 trillion) long-term budget, a source familiar with the issue said. The cut will be proposed in the latest EU negotiating text on the bloc's spending plan for 2014-2020, but is unlikely to be deep enough to satisfy Britain, Germany, France and other net budget contributors.
- Honda cuts FY profit forecast as China backlash hits. Japan's Honda Motor Co cut its full-year net profit forecast by a fifth after sales in China, the world's biggest autos market, were hit by a popular backlash against Japanese products in a dispute over East China Sea islands. The substantial cut makes it likely that rivals Toyota Motor and Nissan Motor will follow suit when they report quarterly earnings early next week.
- Markets braced for 'Mexican standoff' over US fiscal cliff. "Quite simply, the US is the closest shark to the boat right now,” says Russ Koesterich, the chief investment strategist at iShares.
- Germany rattled as taxpayer losses loom in Greece. The EU-IMF Troika of inspectors in Greece has called on European bodies and official creditors to write off a chunk of their loans, opening the way for first taxpayer losses since the sovereign debt crisis began.
- Munich Re is planning for all potential outcomes to the euro crisis, including an end to the common currency, citing an interview with CEO Nikolaus von Bomhard. Another Greek debt restructuring would cause markets to lose all confidence. Laws are needed in case a euro zone country goes bankrupt.
- China's monetary authority is now "much less" inclined to cut lenders' reserve requirement ratio because of growth in foreign currency positions and M2 money supply, and persistent high levels of financing bolstered by corporate bonds and trust lending, Financial News said in a front-page commentary written by Xu Shaofeng, who wasn't identified.
- China's economy doesn't currently have "significant" conditions for rebound as global quantitative easing limits the nation's monetary policy, China Securities Journal publishes a front page commentary written by Cao Yang, a reporter at the newspaper. Some important, traditional industries in China are still facing over-capacity, the commentary said.
- Chinese patrol boats are "monitoring and collecting evidence" of Japanese actions after finding Japan's patrol boats in waters near the disputed islands.
Al-Qaeda chief urges followers to kidnap westerners. Al-Qaeda leader Ayman al-Zawahiri has urged his followers to kidnap western citizens in order to liberate Qaeda inmates in U.S, Guantanamo Bay and other places. In a 58-minute video posted on Jihadi websites, the terror outfit leader said that liberating Omar Abdul Rahman, an Egyptian cleric jailed in the United States for his role in the 1993 World Trade Center attack, and inmates at the US prison at Guantanamo Bay was an “obligatory duty for every Muslim.” “I call upon Muslims to capture citizens of the countries that wage wars against Muslims,” he said. “Our captives or Sheikh Omar Abdul Rahman will not be liberated except through force, for it is the only language that they understand.” In that vein, he made a reference to Warren Weinstein, a relief worker with USAID who was captured in Lahore, Pakistan in August 2011. The al-Qaeda chief also focused his homeland Egypt in speech by urging Egyptians to restart their revolution to press for Islamic law.
- Made positive comments on (BKS) and (HY).
- Made negative comments on (GIS) and (MNST).
- Asian indices are -.50% to unch. on average.
- Asia Ex-Japan Investment Grade CDS Index 123.0 +4.0 basis points.
- Asia Pacific Sovereign CDS Index 96.75 +3.25 basis points.
- FTSE-100 futures -.21%.
- S&P 500 futures -.42%.
- NASDAQ 100 futures -.40%.
Earnings of Note
8:30 am EST
- Personal Income for September is estimated to rise +.4% versus a +.1% gain in August.
- Personal Spending for September is estimated to rise +.6% versus a +.5% gain in August.
- The PCE Core for September is estimated to rise +.1% versus a +.1% gain in August.
- Dallas Fed Manufacturing Activity for October is estimated to rise to 0.0 versus -.9 in September.
- None of note
- The Spain retail sales report and the Japan unemployment rate could also impact global trading today.