- Spain Output Shrinks Fifth Quarter Amid Bailout Talk: Economy. Spain’s economy contracted for a fifth quarter, adding pressure on Premier Mariano Rajoy to seek more European aid even as the euro area’s fourth-largest economy met a bill-sales target. Gross domestic product fell 0.4 percent in the three months through September from the previous quarter, matching the contraction of the second quarter, the Bank of Spain said in an estimate in its monthly bulletin released in Madrid today. That compares with a median forecast for a 0.7 percent contraction in a Bloomberg News survey of 10 economists. Spain’s bonds have declined since European Union leaders last week failed to discuss further aid for the nation at a Brussels summit. Rajoy has struggled to trim a 2011 budget deficit that was more than three times the EU limit, after the country’s deepening recession pushed the jobless rate over 25 percent, sapping demand and tax revenue. “Progress isn’t conclusive, there is a huge amount of uncertainty in Spain right now,” said Ebrahim Rhbari, a London- based economist at Citigroup Inc. “There are question marks about the banking sector and public finances and economic fundamentals suggest we will see a bailout sooner than later.” Spain’s economy probably contracted 1.7 percent in the third quarter from a year ago, as job losses continued, households ate into their savings and low disposable income reduced their ability to pay down debt, the Bank of Spain said.
- Rajoy Sees Case for Slowing Spain’s Austerity as Economy Shrinks. Spanish Prime Minister Mariano Rajoy said there is a case for easing budget-deficit targets set by the European Union as the recession undermines tax revenue. “I think what a lot of other people think,” Rajoy told the Spanish senate today. “Things could be done more calmly, taking into account especially that we are in a recession, but in any case I can’t give up on Spain’s commitments.” Rajoy’s comments undercut Budget Minister Cristobal Montoro’s insistence that Spain can stick to the path of budget consolidation demanded by the EU even after the Bank of Spain said the euro area’s fourth-largest economy contracted for a fifth quarter between July and October.
- EU’s Van Rompuy, Barroso Warn Against Debt-Crisis Complacency. Two top European Union officials warned the euro area against complacency about the debt crisis after an easing of market tensions, saying political battles lie ahead over the latest push to protect the single currency. EU President Herman Van Rompuy and Jose Barroso, head of the EU’s regulatory arm, said the euro region can’t afford to backtrack on plans for a single bank supervisor and tougher oversight of national budgets. “Not all member states feel the same degree of urgency, which probably is due to the fact that they are in different financial and fiscal positions,” Barroso, president of the European Commission, said in a debate with EU lawmakers today in Strasbourg, France. “Some of these issues are extremely difficult from a political and technical point of view, but the decisions should be as urgent as possible.”
- ECB Would Gain Power Over Banker Bonuses in Oversight Plan. The European Central Bank would get power to oversee bankers’ compensation under draft legislative proposals to establish the ECB as a bank supervisor. The Frankfurt-based institution would get the power to monitor risk management, capital standards and “remuneration policies and practices,” according to the draft dated today. The blueprint also says the ECB would be able to carry out stress tests and “where appropriate publish the results.”
- Merkel Ally Warns of Concern at U.K. as Hague Threatens Veto. Germany is growing increasingly concerned at the rise of euro-skepticism in the U.K., a leading party ally of Chancellor Angela Merkel said.
- 3M(MMM) Cuts Full-Year Forecast Range as Sales Fell in Europe. 3M Co. (MMM), the manufacturer of products including Scotch tape and dental braces, reduced its full-year forecast as a recession in Europe and slowing Asia growth crimped sales. The shares declined the most in 11 months. 3M now sees earnings of $6.27 to $6.35 a share, including 3 cents of an acquisition-related cost, 3M said in a statement. That’s down from a previous target of $6.35 to $6.50, which didn’t include the expense, and lower than the $6.40 average of analysts’ estimates complied by Bloomberg.
- DuPont(DD) to Cut 1,500 Jobs as Profit Misses Estimates. DuPont Co. (DD), the most valuable U.S. chemical maker, said it will eliminate 1,500 jobs after posting a smaller-than-estimated third-quarter profit and cutting its forecast on declining demand for paint pigment and solar cells. Net income dropped to $10 million, or 1 cent a share, from $452 million, or 48 cents, a year earlier, Wilmington, Delaware- based DuPont said today in a statement. Profit excluding earnings from the auto-paint unit and one-time items was 32 cents a share, trailing the 47-cent average of 14 analysts’ estimates compiled by Bloomberg. The shares fell.
- Obama’s Claim on Spending Cuts Not Matched By Progress. President Barack Obama’s statement that $109 billion in automatic spending cuts “will not happen” in 2013 isn’t matched by progress with lawmakers in Congress toward a deficit-cutting deal to avert the reductions. Obama made the prediction during last night’s presidential debate after Republican challenger Mitt Romney accused him of endangering the national defense by proposing “a combination” of budget cuts and “sequestration cuts” that would curb military spending by $1 trillion.
- Iran Threatens to Halt Crude Exports If Sanctions Intensify. Iran will suspend all oil exports, pushing global crude prices higher, if the U.S. and Europe tighten sanctions further on the OPEC member’s economy, Oil Minister Rostam Qasemi warned. “If you continue to add to the sanctions, we will stop our oil exports to the world,” he said at a news conference in Dubai. “The lack of Iranian oil in the market would drastically add to the price.”
- Emerging ETF Sinks Most Since July on Declining Earnings. The exchange-traded fund tracking emerging-market shares slipped the most since July in New York and stocks slumped on concern the global slowdown is crimping company earnings and as commodities erased this year’s gains. The iShares MSCI Emerging Markets Index ETF, which tracks companies including Korea’s Posco and Moscow-based OAO Gazprom, sank 2.3 percent to $40.95 by 11:44 a.m. in New York, poised for the biggest one-day slide since July 23.
- Commodities Erase Gains for Year. Commodities declined, erasing this year’s gain, as slowing global economic growth may curb demand for raw materials even as central banks pledge more stimulus. The Standard & Poor’s GSCI spot gauge of 24 commodities fell for a third consecutive session, after sliding for the first month in four in September. The measure declined 1.3 percent to 639.71 at 9:28 a.m. in New York, after slipping to 640.17, the lowest since Aug. 3. The GSCI first erased gains for the year in May, and most recently in July. The last annual drop was in 2008.
Wall Street Journal:
- The October Surprise? Corporate America’s Backward Slide Dents Job Prospects. The October run of stinko corporate financial results is bad news for stocks. It’s also bad news for people who want a new or better job, and the prospects for a quick bounce-back aren’t looking good. Analysts today are scrambling to skin back their forecasts for fourth quarter revenue and profits as some 22 companies have warned that fourth quarter numbers will fall short of Wall Street’s estimates, says ThomsonReuters analyst Greg Harrison. One sign of how the outlook has soured, Mr. Harrison says, is how far Q4 profit estimates have fallen this year. In April, analysts were expecting, on average, 16.3% earnings growth for the current quarter. At the beginning of October, the outlook had fallen to 9.9% growth. Now, the consensus is for 8.9% growth, and based on what companies are saying, “maybe those estimates need to come down,” he says.
- BASE METALS: Comex Copper Falls to Six-Week Low on Spain Woes. Copper futures slipped to six-week lows on Tuesday, as a gloomier economic outlook from Spain's central bank renewed concern about Europe's banking system. The most-actively traded copper contract, for December delivery, recently traded down 5.5 cents, or 1.5%, at $3.567 a pound on the Comex division of the New York Mercantile Exchange. Futures fell as low as $3.56 a pound, the lowest intraday price since Sept. 7. The Bank of Spain said the country's recession accelerated in the third quarter, with an annual contraction rate of 1.7%. The year-on-year contraction in the prior three-month period was estimated at 1.3%.
- Apple(AAPL) Unveils iPad Mini.
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- A Perfectly Plausible President. All Mitt needed to do was sound reasonable. He succeeded.
- Richmond Fed business index falls in October. The Richmond Fed's index of manufacturing activity fell in October to -7 from 4 in September, the bank said Tuesday. The decline is another sign of broader weakness in the U.S. manufacturing sector since the end of spring. Most of the index's components decreased, including new orders and shipments. The new-orders gauge sank 13 points to -6 and shipments retreated 18 points to -9. The employment index held steady at -5. Numbers below zero indicate contraction.
- World ‘Close’ to Recession: Stanley Fischer.
- Mulberry Stock Plunge Sends Chill Down Luxury Sector.
- Spain’s ‘Vicious Circle’ Worsens as Moody’s Downgrades Regions.
- European Stocks And Bonds Plunge Most In A Month.
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- CHART OF THE DAY: A Measure Of Stock Correlations Suggests We May Have Just Hit A Major Turning Point In The Market.
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- Weekly Retail Sales Rise Just +1.6% YoY. The Redbook Retail Sales data, part of the Johnson Redbook Index, is showing some mixed results for the retail sector. Today's report showed that U.S. retail sales were down by 1.7% so far in October when compared to September. However, if you go back by one year, the first three weeks of October sales were up by 1.6% in 2012 versus 2011.
- Daily Swing State Tracking Poll. Swing State Tracking: Romney 50%, Obama 45%.
- U.S. companies sharpen job-cutting shears as sales slow.
- French budget lacking in spending cuts - ECB's Noyer.
- Spanish officials agreed with their counterparts from the EU and ECB on the haircuts that the so-called bad bank will apply to real estate assets it buys. New homes face a 54% haircut. Used homes face a 48% haircut and land faces a 86% haircut on average.
- Cemex to Cut 22% of Its Spanish Workforce.