Friday Watch

Evening Headlines 
Bloomberg: 

• BOJ Refrains From More Stimulus as Business Confidence Rises. The Bank of Japan refrained from adding to unprecedented monetary stimulus after business confidence surged and Prime Minister Shinzo Abe decided the economy was strong enough to weather a sales-tax increase. Governor Haruhiko Kuroda’s board retained a goal of expanding the monetary base by 60 trillion to 70 trillion yen ($720 billion) a year, the central bank said in Tokyo today. Thirty-five of 36 economists in a Bloomberg News survey forecast no change in policy, while one predicted more purchases of real-estate investment trusts.

• Asia Stocks Fall as Treasury Warns of U.S. Impasse Impact. Asian stocks fell, with the regional index heading for its first weekly loss in more than a month, as concern grew that the U.S. political impasse could lead to the government defaulting on its debt. Blumont Group Ltd. slumped 56 percent in Singapore before trading was suspended after it agreed to buy an unnamed overseas coal producer. Digital Garage Inc. (4819) lost 6 percent after a Twitter Inc. filing failed to mention the Tokyo-based company as a shareholder. GS Yuasa Corp. (6674), a Japanese battery producer, slumped 4.8 percent as its rating was cut at Mitsubishi UFJ Morgan Stanley Securities Co. The MSCI Asia Pacific Index lost 0.3 percent to 139.09 at 12:18 p.m. in Tokyo as all but one of the 10 industry groups on the gauge fell.

• Rubber Set for Worst Week Since May as U.S. Impasse Boosts Yen. Rubber headed for the biggest weekly loss since May as concern that the U.S. political impasse could lead to a recession boosted the Japanese currency and cut the appeal of yen-denominated futures. The contract for March delivery on the Tokyo Commodity Exchange fell as much as 1.2 percent to 253.9 yen a kilogram ($2,615 a metric ton), the lowest level since Aug. 8. Futures traded at 254.5 yen at 10:07 a.m. and lost 5.8 percent this week, the worst performance since the five days through May 24. 

• Gold Swings Above $1,300 as Investors Assess U.S. Economy, Debt. Gold fluctuated above $1,300 an ounce, heading for a weekly loss, as investors weighed the prospect of slower U.S. economic growth as a partial government shutdown entered a fourth day and lawmakers wrangled over the debt limit. Bullion for immediate delivery traded little changed at $1,315.41 an ounce at 11:25 a.m. in Singapore after rising 0.5 percent and losing 0.2 percent. Bullion declined to an eight-week low of $1,277.15 on Oct. 2 before rebounding as investors assessed the government closure and its impact on the outlook for monetary stimulus from the U.S. Federal Reserve.

• Twitter Said to Plan to Make S-1 Public Today. (video) Twitter plans to make its S-1 regulatory filing for its initial offering public today, said people with knowledge of the process. Cory Johnson and Jon Erlichman report on Bloomberg Television's "Street Smart."

• Harvard Won’t Divest From Fossil Fuels, Faust Says. Harvard University, the world’s richest school, won’t sell its investments in fossil-fuel companies amid pressure from students, President Drew Faust said in a letter released today. “I do not believe, nor do my colleagues on the Corporation, that university divestment from the fossil fuel industry is warranted or wise,” Faust said in the letter, referring to Harvard Corporation, the school’s governing board. “The endowment is a resource, not an instrument to impel social or political change.” 

Wall Street Journal: 

• GOP Begins Search for Broad Deal on Budget. Senior Republicans in Congress, frustrated over their inability to strike a deal to reopen the government, began shifting from their drive to undercut the 2010 health-care law, which has been the central element of the dispute, toward a broader budget deal.

• Budget Battle: Streaming Coverage.

• Noonan: To Lead Is to Negotiate. A veteran of shutdowns and divided government reflects on today's Washington.

Fox News:

• Fox News Poll: Voters support delaying Obamacare, but oppose defunding it. While voters oppose defunding the health care law, they say implementation should be delayed, and a majority wants all or part of the law repealed.

• Veterans Affairs accused of 'double-speaking' on impact of budget impasse. As the partial government shutdown drags on, the Department of Veterans Affairs may be changing its tune about the severity of the cutbacks.

CNBC:

• Here's how much stock Twitter execs own.

• What happened to a weak yen?

Zero Hedge: 

• Jamie Dimon No Longer Chairman Of JPM's Primary Banking Subsidiary. 

• What Will Happen To The US Credit Rating?

• The Rise And Fall Of Monetary Policy Coordination.

• Wall Street Headhunter: "I Haven't Seen Morale This Bad Since The Titanic".

• Government Shutdown? 36 Facts Which Prove That Almost Everything Is Still Running.

• About The "Europe Is Recovering" Meme. (graph)

• Picturing The Dangers Of An All-Powerful Federal Reserve.

Business Insider: 

• Tropical Storm Karen Set To Hit Florida Gulf Coast.

Reuters: 

• Obama cancels visits to Indonesia, Brunei due to U.S. government shutdown.

• Adobe(ADBE) says customer data, source code accessed in cyber attack. Adobe Systems Inc said on Thursday it was the victim of sophisticated cyber attacks on its networks by hackers who accessed data belonging to millions of customers along with the source code to some of its popular software titles.

Korea Economic Daily:

• IMF to Cut South Korea Growth Forecast. Fund to cut forecast for 2014 to 3.7% from 3.9%, citing officials at investment banks and international institutions.

Evening Recommendations 

• None of note

Night Trading

• Asian equity indices are -.50% to unch. on average.

• Asia Ex-Japan Investment Grade CDS Index 153.0 +1.0 basis point.

• Asia Pacific Sovereign CDS Index 120.0 +1.0 basis point. 

• FTSE-100 futures -.04%.

• S&P 500 futures +.04%.

• NASDAQ 100 futures +.11%.

Morning Preview Links

Earnings of Note
Company/Estimate

• None of note

Economic Releases 

• None of note

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Kocherlakota speaking, Fed's Lacker speaking, Fed's Stein speaking, Fed's Dudley speaking, Fed's Fisher speaking, BoJ decision and the Eurozone inflation data could also impact trading today.

BOTTOM LINE: Asian indices are mostly lower, weighed down by industrial and technology shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing mixed. The Portfolio is 50% net long heading into the day.