Tuesday Watch

Evening Headlines 
Bloomberg: 

• No Sign of Thaw in Obama’s Brief Encountes With Putin. U.S. President Barack Obama and Russian President Vladimir Putin had two brief, informal encounters during a summit in Beijing, neither of which amounted to any sign of a breakthrough in a frozen relationship. The leaders “didn’t have any discussion,” Dmitry Peskov, Putin’s spokesman, told reporters after the two leaders met before last night’s welcoming banquet at the Asia-Pacific Economic Cooperation summit. “They greeted each other. They spoke a few phrases to each other” but “there were no talks,” Peskov said.

• Russia Cash Squeeze Gets First Test Today in Loan Auction. Russian policy makers’ latest bid to shore up the nation’s currency sounds complex but is actually simple: They will take rubles out of the hands of banks. Fewer rubles means bankers will have less cash to buy dollars. That in turn will stem the selloff in the ruble. Or so goes the argument. On day one, the plan -- or at least the unveiling of the plan -- worked. The ruble surged 2.4 percent yesterday to 45.6141 per dollar, rebounding from a record low even as policy makers simultaneously took other steps to allow it to trade freely.

• Sydney House-Sellers Demand Record A$1 Million Median Sale Price. Sydney’s median asking price for detached houses topped A$1 million ($864,300) this week for the first time as sellers raised expectations in a booming market. The asking price surged 11 percent over the past seven days, according to Sydney-based data company SQM Research Pty. That’s the highest since the firm began reporting the data in April 2009.

• Fukushima Radiation Found in Pacific Off California’s Coast. Oceanographers have detected isotopes linked to Japan’s wrecked Fukushima nuclear plant off California’s coast, though at levels far below those that could pose a measurable health risk. 

• Most Asian Stocks Climb as Topix Advances on U.S. Rally. Most Asian stocks rose, with the regional benchmark index heading for its third day of advance, as Japan’s Topix index climbed after the Standard & Poor’s 500 Index extended a record rally on earnings optimism. Three shares rose for each that fell on the MSCI Asia Pacific Index (MXAP), which added less than 0.1 percent to 140.96 as of 9:04 a.m. in Tokyo.

• Weak Oil Prices Yet to Slow U.S. Shale Output: EIA Report. Falling oil prices haven’t dimmed the U.S. Energy Department’s outlook for domestic crude output. The country’s seven largest shale plays will produce 125,000 more barrels a day in December than in November, the Energy Information Administration said today in its monthly Drilling Productivity Report. The agency is the Energy Department’s statistical arm.

• Brokers Attack SEC’s Plan as Trojan Horse Designed to Hurt Them. Wall Street brokers are in rebellion against a plan to test ways of encouraging more trading of the smallest U.S. stocks, saying the effort was hijacked by exchanges seeking an edge over their rivals. The Securities and Exchange Commission’s pilot program is meant to spur trades in about 30 percent of publicly traded U.S. companies. One of its provisions -- called a trade-at rule -- is really a stealth attempt to hurt brokers that run private trading systems that compete with the likes of the New York Stock Exchange, representatives from JPMorgan Chase & Co. (JPM) and Citigroup Inc. (C) said today at an industry conference.

• Juniper(JNPR) CEO Resigns After Review Over Customer Negotiation. 

Wall Street Journal:

• Veterans Accuse Six Banks of Aiding U.S. Foes. Suit Alleges Institutions Helped Iran Move Millions of Dollars to Groups Targeting GIs in Iraq. More than 200 veterans and their families filed a lawsuit Monday accusing six major banks of helping Iran move tens of millions of dollars to groups targeting U.S. soldiers in Iraq during the war.

• If Iran Says ‘Yes’. Why should a regime that has paid no price for dishonesty suddenly discover the virtues of honesty?

• The Department of the Internet. Obama lobbies the FCC to regulate the Web as if it were telephone service in the 1930s. 

Fox News:

• US troops arrive in Iraq's Anbar province amid ISIS fight. A team of about 50 military personnel are visiting a U.S. military airbase in Iraq’s Anbar province after President Obama authorized the deployment of up to 1,500 more American troops to bolster Iraqi forces in the region in the fight against the Islamic State.

CNBC: 

• Dinged credit? Card issuers are happy to lend. Consumers with dinged credit are back in a borrowing mood, and lenders are more than happy to give them new credit cards, according to new data. Since the Great Recession ended five years ago, consumers have been gradually taking on more debt and lenders have been accommodating them, easing up on tighter standards. Much of the growth has been in so-called non-revolving credit, especially car loans, thanks to record low interest rates. But revolving credit—mainly in the form of credit cards—is picking up. And the biggest growth in new credit cards is coming from so-called subprime borrowers whose credit scores are less than 660, according to the latest Equifax data.

Zero Hedge: 

• Is China Sending America A Message?

• A "Dangerous Spiral" Has Taken Hold In Emerging Markets.

• The Council Of Foreign Relations Apologizes For The "Greenspan Glitch".

• Deflation Comes Knocking On The Door. (graph)

• Do The Lessons Of History No Longer Apply? (graph)

• Avoid This Accident Waiting To Happen In Investment Markets.

• New Russian Military Doctrine Identifies NATO/US As "Threats"; Gorbachev Warns Of "New Cold War".

• ObamaCare Architect Admits "Lack Of Transparency" Is Huge Advantage Against "Stupidity Of The American Voter".

• Abe Approval Tumbles As Majority Say Japan's "Banzainomics" QE Will Have Negative Effects.

Business Insider: 

• The Takata Exploding Airbag Recall Just Gets Worse And Worse.

• Europe's Contribution To Global Profits Has Gone Off A Cliff. (graph)

• Europe And Japan Are Still Economic 'Train Wrecks'.

• Central Banks Are At War With The 4th Horseman Of The Economic Apocalypse.

• China May Have Hacked The US Postal Service.

Reuters:

• Citigroup(C) slashes 2015 iron ore price forecast, sees drop below $60. Citigroup has slashed its iron ore price forecast for 2015, predicting the steelmaking ingredient could drop below $60 per tonne in the most bearish estimate yet from a financial institution on the glut-hit commodity. "We expect renewed supply growth to once again drive the market lower in 2015, combined with further demand weakness," the U.S. investment bank said in a report on Tuesday.

• Aluminum flat-rolled overcapacity in Asia will last years -Novelis. Overcapacity in the Asian flat-rolled aluminum market may last for several more years, hurting prices and forcing producers to sell more material further afield, Novelis Chief Executive Officer Phil Martens said on Monday. Without a significant recovery in China's economy, demand will not be high enough to absorb the surplus sheet, mainly used in beverage cans and packaging, produced in China and washing around Asia.

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 goaFed's Williams: Can't wait too long to raise rateTripAdvisor profit sags as costs jump; shares slid

Shanghai Securities News:

• China Economist Sees Slowing Investment Growth. Slowing growth in investment will continue next year and drag down the economy, citing Zhu Baoliang, leading economist at the State Information Center's economic forecasting department.

Evening Recommendations

• None of note

Night Trading

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

• Asia Ex-Japan Investment Grade CDS Index 106.0 -2.0 basis points.

• Asia Pacific Sovereign CDS Index 64.25 -.25 basis point.

• FTSE-100 futures +.13%.

• S&P 500 futures +.06%.

• NASDAQ 100 futures  +.10%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (DHI)/.48

• (FOSL)/1.82 

Economic Releases
7:30 am EST

• The NFIB Small Business Optimism Index for October is estimated to rise to 96.0 versus 95.3 in September.

Upcoming Splits

• None of note

Other Potential Market Movers

• The German Wholesale Price Index, US weekly retail sales reports, Jefferies Energy Conference, Cowen Metals/Mining/Materials Conference, Stephens Investment Conference, Goldman Sachs Industrials Conference, (GRPN) analyst day could also impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by industrial and real estate shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed. The Portfolio is 50% net long heading into the day.