Bloomberg:
- IMF’s Zhu Says China Has Tools to Deal With Debt Levels. The Chinese government has room to deal with rising debt levels, which has become a “serious concern,” according to Zhu Min, a deputy managing director at the International Monetary Fund.
- Asian Stocks Swing From Gain, Loss on Health Care, Energy. Asian stocks swung between gains and losses as health care shares rose while energy companies and materials producers declined. Japanese equities climbed as the yen weakened. BHP Billiton Ltd., the world’s biggest mining company, fell 1.2 percent in Sydney as it headed for its lowest close since July 22. Alfresa Holdings Corp., which makes drugs and medical devices, gained 2.9 percent in Tokyo. Mazda Motor Corp., the automaker that gets 30 percent of sales in North America, added 2.9 percent as the yen slid for a third day on optimism the U.S. government will avoid default. Sa Sa International Holdings Ltd. dropped 4 percent in Hong Kong after Credit Suisse Group AG said the cosmetic retailer’s sales during China’s week-long holiday missed estimates. The MSCI Asia Pacific Index dropped 0.2 percent to 138.75 as of 11:47 a.m. in Tokyo after rising as much as 0.2 percent.
- Brazil Extends Record Rate Lift as Inflation Outlook Worsens. Brazil’s central bank extended today the world’s biggest interest rate increase and raised the key rate for a fifth straight time as a weaker currency hampers efforts to slow inflation. The bank’s board, led by President Alexandre Tombini, voted unanimously to raise the benchmark Selic to 9.5 percent from 9 percent, as forecast by all 49 economists surveyed by Bloomberg. Policy makers, repeating language used in their August decision, said the increase will ensure slower inflation next year. They have raised borrowing costs by 225 basis points, or 2.25 percentage points, since April. “Inflation is elevated and well above target,” said Luciano Rostagno, chief strategist at Banco Mizuho do Brasil SA. “There are still risks from a weaker real, which can pressure inflation in the next few months.”
- German Greens Poised to Rebuff Merkel’s Coalition Overtures. Germany’s Greens are approaching today’s meeting with Chancellor Angela Merkel and her bloc looking for an excuse to abandon talks before they’ve begun. With the party leadership in transition, a gulf in policy with Merkel’s side, a membership skeptical of a coalition and open animosity with Merkel’s Bavarian allies, the Greens may conclude there’s no chance of finding common ground. The Greens team is due to meet with Merkel and 13 members of her Christian Democratic-led bloc at 4:30 p.m. in Berlin today.
- Debtors’ Prison Is No Place for Country Like U.S. How is it government officials come to contradictory conclusions about what the U.S. Treasury can do in the event it lacks the money to pay all its bills? Can the Treasury prioritize and pay bondholders before everyone else? The Treasury says no. The Government Accountability Office says yes. Who’s right?
- Toyota Trims Plug-in Prius Price to Improve U.S. Sales. Toyota Motor Corp. (7203) is reducing the price of its plug-in Prius models to try to boost sales and meet a California mandate as automakers find that cost is critical to U.S. consumers’ willingness to buy rechargeable autos. The world’s largest seller of hybrid autos is trimming the base price of the 2014 Prius Plug-in to $29,990, a $2,010 reduction from the current car, while the top-end Advanced grade gets a 12 percent cut to $34,905, Toyota said in a statement yesterday. The new versions, which also get a $2,500 U.S. tax credit, go on sale next month.
- Shutdown Standoff Shows Signs of a Thaw. Near-Term Debt-Limit Increase Gains Support From Conservatives as White House Meeting Is Set. The partisan logjam that has paralyzed the capital showed signs of easing Wednesday, as conservative Republicans warmed to the idea of a short-term increase in the country's borrowing limit and House GOP leaders prepared for their first meeting with President Barack Obama since the government shutdown began. Rep. Paul Ryan (R., Wis.), chairman of the House Budget Committee, outlined a plan Wednesday to fellow conservatives to extend the nation's borrowing limit for four to six weeks, paired with a framework for broader deficit-reduction talks, according to lawmakers briefed on the proposal. The greater the spending reduction the talks produced, the longer the next extension of the debt ceiling would be under Mr. Ryan's plan.
- Chinese Think Tank Puts Shadow Banking at 40% of GDP. As the fastest-growing part of China’s financial sector, shadow banking is no longer the sideshow it was five years ago. The sector grew from almost nothing a few years ago to the equivalent of 40% of gross domestic product at the end of 2012, the Chinese Academy of Social Sciences said in a report published Tuesday.
- IMF Sees Greece Missing 2014 Bailout Budget Target. Greece is projected to miss a key bailout target for next year according to an International Monetary Fund report published Wednesday, a factor likely complicating already-fraught negotiations over the next tranche of financing for the ailing economy. The IMF projects in its latest Fiscal Monitor report that Greece’s budget surplus will only hit 1.1% of gross domestic product next year instead of the 1.5% of GDP target outlined in its bailout terms with the IMF and the euro zone.
- Mobile Advertising Begins to Take Off. Spending More Than Doubled in the First Half.
- Let's Get Cynical. Why should we trust the government--especially now? "An old friend who has been active in politics for more than 30 years tells me he's giving up," claims Robert Reich in a Puffington Host post: " 'I can't stomach what's going on in Washington anymore,' he says. 'The hell with all of them. I have better things to do with my life.' "
- David Malpass: The Bigger Battle Behind the Shutdown. A staggering $250 billion per month, 80% of spending, runs on autopilot without congressional control. At its core, the shutdown is part of a much bigger battle to restrain the federal government. It is spending $3.6 trillion per year without a budget, and its expenditures are expected to increase rapidly in the years ahead. Meanwhile, the government has piled up $17 trillion in debt and $60 trillion more in unfunded spending promises. The Federal Reserve will borrow $1.1 trillion in 2013 alone to buy bonds—and it reserves the right to borrow unlimited amounts for future bond purchases without congressional or presidential permission.
- House Republicans eye short-term debt ceiling fix, ahead of White House meeting.
Conservative lawmakers are exploring the possibility of a short-term increase in the debt ceiling, perhaps trying to seize the opening after President Obama said a day earlier he would consider the option. Members of the Republican Study Committee, the most conservative bloc in the House, told Fox News they're looking at that possibility. Their inclination is to consider a short-term increase only if there is an agreement on a broader spending framework.
- Ruby Tuesday(RT) first-quarter swings to loss. Ruby Tuesday Inc. swung to a fiscal first-quarter loss as same-store sales fell sharply and the casual-dining chain posted $7.5 million in write-downs and lease reserves related to underperforming or closed stores. Shares were down 13% at $6.58 in recent after-hours trading as the results missed expectations.
- Chevron(CVX) warns on third quarter due to refining earnings drop. Chevron, the second-largest U.S. oil company, warned on Wednesday that third-quarter earnings would be lower than in the second quarter due to "significantly lower" earnings from its refining division as fuel margins were squeezed.
ValueWalk:
CNN:
- Armed rebels escort Libyan PM to undisclosed location. Rebels have kidnapped Libyan Prime Minister Ali Zidan and taken him
to an undisclosed location, the prime minister's spokeswoman told CNN
early Thursday. Armed rebels escorted the
prime minister from the Corinthian Hotel in Tripol into a convoy of
waiting cars, said a hotel clerk who was not aut
horized to speak to the media.
- Citrix(CTRX) guides results below expectations; shares dive. Cloud computing software maker Citrix Systems Inc estimated quarterly results below analysts' expectations as businesses delayed contracts, sending its shares down as much as 14 percent in extended trading. Cloud computing companies such as Citrix and VMware Inc have been facing delays in closing large deals as customers review IT budgets to prune discretionary spending. Citrix's warning could set the tone for other software companies as it comes just ahead of the third-quarter reporting season. VMware shares fell 3.3 percent after the bell.
- PC sales fall to lowest level for five years. Sales of personal computers hit their lowest level since 2008 in the third quarter, falling 8.6pc on the same period last year.
Cowen:
- Raised (CHKP) to Outperform, target $65.
- Asian equity indices are -.50% to +.50% on average.
- Asia Ex-Japan Investment Grade CDS Index 149.0 -4.0 basis points.
- Asia Pacific Sovereign CDS Index 116.25 -1.25 basis points.
- FTSE-100 futures +.29%.
- S&P 500 futures +.38%.
- NASDAQ 100 futures +.30%.
Earnings of Note
Company/Estimate
- (VAC)/.39
- (SFY)/.16
- (MU)/.23
8:30 am EST
- Initial Jobless Claims are estimated to rise to 311K versus 308K the prior week.
- Continuing Claims are estimated to fall to 2863K versus 2925K prior.
- None of note
- The Fed's George speaking, Fed's Williams speaking, Fed's Taruillo speaking, Fed's Bullard speaking, BoE rate decision, Germany CPI, 30-Year T-Bond auction, BoJ's Kuroda speaking, weekly Bloomberg Consumer Comfort Index, weekly EIA natural gas inventory report and the (LINTA) investor day could also impact trading today.
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