Thursday Watch

Evening Headlines 
Bloomberg:

• Kurdish Protests Roil Turkey as Jihadists Fight in Kobani. Armored vehicles took to the streets of towns in southeast Turkey, as the government enforced a curfew to end deadly clashes with Kurds angry at the country’s response to Islamic State’s militants in neighboring Syria. Violence erupted late yesterday as Turkish Kurds protested against what they say is Turkey’s failure to stop an Islamic State advance on the mainly Kurdish town of Kobani just across the Syrian border. 

• Draghi Policies Blunted in Berlin as German Protests Grow. The European Central Bank president has stopped short of large-scale sovereign-bond purchases as efforts to mollify Germany’s political elite do little to silence criticism of his ever-more expansionary measures. Support for anti-euro groups such as Alternative for Germany has risen and the ECB’s latest plan to buy assets sparked an outcry within all major parties. “German public opinion matters an awful lot,” said Anatoli Annenkov, senior economist at Societe Generale SA in London. “Draghi wants the ECB to be a central bank like any other, one that can go and buy government debt. But he’s perfectly aware of Germany’s opposition, and the storm now is a clear signal that it’ll be much more difficult.” The ECB is continuing “its pernicious policy” of transferring risks from European banks to German taxpayers, said Jan Bollinger, a member of Alternative for Germany. The party emerged last year on a platform of opposing the single European currency and bailouts to indebted euro-area member states, and has won seats in three state parliaments in the past two months. 

• Kim Jong Un’s Absence Fuels Rumors Over his Hold on Power. Kim Jong Un’s prolonged absence from public view, including skipping a session of parliament, has raised questions as to whether his disappearance has less to do with his health and more to do with his grip on power in nuclear-armed North Korea. Kim has not been seen in public since Sept. 3, an unusual stretch in a country where media provide a steady stream of propaganda images featuring the Supreme Leader overseeing everything from missile launches to grain harvests. While official media reports say Kim is suffering “discomfort,” his seclusion has sparked discussion about who is in charge of a country that boasts 1.2 million troops and has threatened to turn Seoul into a sea of fire.

• Australian Employers Unexpectedly Cut Jobs in September. Australian employers unexpectedly cut payrolls in September, indicating that interest rates will probably remain at a record low for an extended period. The number of people employed fell by 29,700 the statistics bureau said in Sydney today. That compares with a median estimate for a 15,500 increase and follows the bureau’s statement yesterday that it would review methodology used to calculate the jobs data. The jobless rate was 6.1 percent.

• Asian Stocks Climb After Fed Minutes Spur Rate Optimism. Asian stocks rose for a third day this week as Federal Reserve concerns over a global economic slowdown spurred bets that U.S. interest rates will remain low. The MSCI Asia Pacific Index (MXAP) gained 0.5 percent to 138.81 as of 9:02 a.m. in Tokyo, before markets open in Hong Kong and China.

• Brent Falls Into Bear Market as Supply Outpaces Demand. Brent closed 21 percent below its June peak, meeting the common definition of a bear market. U.S. production is set to increase to the most in more than three decades amid higher output from shale formations. Supplies from OPEC rose last month and Russian output neared a post-Soviet record. The International Energy Agency reduced demand projections for this year and next.

Wall Street Journal: 

• Google’s(GOOG) Tax Setup Faces French Challenge. Arrangement Channels European Revenue to Country With Favorable Tax Laws. 

• Spain Struggles to Address Concern Over Ebola Case. European Union Asks Spain for More Information on How Health Worker Contacted Disease.

MarketWatch.com:

• Global PC shipments fall in third quarter. Personal computer sales fell in the third quarter as shipments declined in emerging markets and equipment upgrades prompted by Microsoft Corp.'s operating system phaseout slowed down, according to a pair of data trackers.

Zero Hedge:

• Name The Hedge Fund. (graph)

• Finally, Here Come The Banks: "Ebola Is A Tail-Risk That Can No Longer Be Ignored".

• Things That Make You Go Hmmm... Like The Perfect 'Kondratieff Winter' Storm Ahead. (graph)

• What The World Needs Now... Is Not This. (graph)

• 18 Sobering Facts About The Unprecedented Student Loan Debt Crisis In The US.

Business Insider:

• Democrats Just Got Some Horrible News From New Polls. 

• China May Have Committed A Tiananmen Square-Scale Massacre This Year — And Totally Covered It Up.

• Google(GOOG) Chairman Eric Schmidt: Government Surveillance Is Going To 'End Up Breaking The Internet'.

• Gap(GPS) Shares Plunge After The Company Announces A New CEO.

Reuters:

• Alcoa(AA) earnings beat forecasts, propelled by higher aluminum prices. Alcoa Inc reported a stronger-than-expected increase in third-quarter profit on Wednesday as higher aluminum prices and lower costs drove a recovery in its business unit that produces aluminum.

Obama takes on coal with first-ever carbon limits
Read more at http://www.philly.com/philly/news/politics/20130919_ap_0f857b20e0c144a5a1e1b9dddc9f9d72.html#YRThyDOhArykUeYy.9Brazil cuts 2014 GDP growth forecast, keeps fiscal goa

Financial Times: 

• Investors warn on crisis plan for derivatives. Institutional investors and pension funds have warned they may resist a plan by the world’s biggest banks to rewrite their derivatives contracts as part of reforms aimed at preventing a failing institution from destabilising global markets.

Xinhua: 

• China Targets Local Govt Debt in New Budget Action Plan. China's State Council will regulate local government debt more strictly under a new budget action plan announced yesterday. 

Evening Recommendations

• None of note

Night Trading

• Asian equity indices are +.25% to +1.0% on average.

• Asia Ex-Japan Investment Grade CDS Index 115.0 -2.0 basis points.

• Asia Pacific Sovereign CDS Index 69.5 +1.75 basis points.

• FTSE-100 futures +.87%.

• S&P 500 futures +.14%.

• NASDAQ 100 futures  +.25%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (LNN)/.56

• (PEP)/1.29

• (CMTL)/.37

• (FDO)/.77

• (CUDA)/.04

Economic Releases
8:30 am EST

• Initial Jobless Claims are estimated to rise to 295K versus 287K the prior week.

• Continuing Claims are estimated to rise to 2410K versus 2398K prior.

10:00 am EST

• Wholesale Inventories for August are estimated to rise +.3% versus a +.1% gain in July.

• Wholesale Trade Sales for August are estimated to rise +.3% versus a +.7% gain in July.
  

Upcoming Splits

• (APH) 2-for-1

Other Potential Market Movers

• The Fed's Bullard speaking, Fed's Williams speaking, Fed's Lacker speaking, BoE Rate Decision, ECB's Draghi speaking, $13B 30Y T-Bond auction, Bloomberg Oct. US Economic Survey, weekly EIA natural gas inventory data, weekly Bloomberg Consumer Comfort Index and the Tesla(TSLA) Model D intro could also impact trading today.

BOTTOM LINE: Asian indices are higher, boosted by industrial and commodity shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed. The Portfolio is 75% net long heading into the day.