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Friday Watch

Late-Night Headlines
Bloomberg:
- The euro traded near a one-year low against the dollar on speculation that a government report will show today industrial production in Europe shrank, backing the case for the region's central bank to cut interest rates. The currency is headed for a third weekly loss as traders increased bets that the European Central Bank will lower borrowing costs to support economic growth.
- Lehman Brothers Holdings Inc.(LEH) entered into talks with potential buyers of the securities firm after Moody's Investors Service said the company must find a ``stronger financial partner'' and the shares plummeted. The U.S. Treasury and the Federal Reserve have been working with Lehman on a sale, and a deal may be announced before Asian markets open Sept. 15., a person with knowledge of the matter said. The government isn't likely to contribute money, the person said. Bankers from other firms were reviewing Lehman's books today, according to people with knowledge of the situation, who declined to identify potential acquirers.
- Washington Mutual Inc.(WM), the savings and loan that lost a third of its value this week, said that it is ``well capitalized'' and forecast a third-quarter loan-loss provision of $4.5 billion. Net charge-offs may increase by less than 20 percent in the third quarter, compared with 60 percent in the previous period, the Seattle-based lender said today in a statement. WaMu said it has $50 billion in liquidity. The company ``continues to be confident that it has sufficient liquidity and capital to support its operations while it returns to profitability,'' according to the statement.
- Highways in Texas were jammed as coastal residents fled Hurricane Ike, which tripled in size in the central Gulf of Mexico and threatened the 5.6 million people of the Houston area.
- The cost to protect corporate bonds in Australia and Japan from default fell for the first time in four days after Lehman Brothers Holdings Inc.(LEH) entered into talks with potential buyers. The Markit iTraxx Australia Series 9 credit-default swap index decreased 8.5 basis points to 152 at 9:22 a.m. in Sydney, according to Citigroup Inc. prices. Japan's index was quoted 7 basis points lower at 131, Morgan Stanley prices show, which indicates improved perceptions of credit quality. Five-year credit-default swaps on New York-based Lehman, the fourth biggest U.S. securities firm, fell 150 basis points to 500 after the Wall Street Journal report, according to broker Phoenix Partners Group. That's down from a record 790 basis points earlier today as concern rose that Lehman faces ratings downgrades if it can't shore up its balance sheet.
- China's industrial production grew at the slowest pace in six years on weaker export demand, power shortages and factory shutdowns during the Olympic Games. Rising raw-material and labor costs have added to pressure on exporters of shoes, toys and clothes. As many as 67,000 medium-sized and small companies posted losses in the five months through May, according to the National Development and Reform Commission. In Guangdong province, an export hub, the number of toymakers fell more than 70 percent in the first seven months from a year earlier, as more than 3,600 shut down, the official Xinhua News Agency reported.
- China's property market could be headed for a ``meltdown'' as home prices and sales decline, and bank earnings will be affected, according to Morgan Stanley. ``Property prices are already cracking in China in major cities,'' wrote Morgan Stanley analysts led by Jerry Lou in a note today. ``We believe the likelihood of a property sector meltdown is high. The impact on banks' earnings may be substantial.'' Morgan Stanley has an ``underweight'' on financials, which include banks and properties.
- Japan's economy contracted more than the government initially estimated last quarter after figures showed businesses cut spending. Gross domestic product shrank an annualized 3 percent in the three months ended June 30, the Cabinet Office said today.
- Andy Lipow, president of Lipow Oil Associates LLC, says oil may fall below $100 a barrel on Hurricane Ike. (video)
- Corn fell for a third straight session and soybeans declined on speculation that a slumping worldwide economy will erode demand for commodities. ``There is definitely an economic slowdown under way and that has led to liquidation in the grain markets,'' said Mark Kessler, the president of Harvest Equity Partners Inc. in Okoboji, Iowa. ``I don't see grain-export demand improving anytime soon. With the global economic slowdown gaining steam, buyers will wait for lower prices.'' The Standard & Poor's GSCI index of 24 raw materials has dropped 29 percent from a record on July 3.
- Gold fell below $750 an ounce, marking the longest slump in eight years, as the US dollar's surge reduced demand for the precious metal as an alternative investment. Silver dropped to the lowest since June 2006. Gold has tumbled 28 percent from a record in March as the dollar climbed 15 percent against the euro from an all-time low in July. ``This is indiscriminate slaughter across all commodities,'' said Ralph Preston, a futures analyst at Heritage West Futures Inc. in San Diego. ``It's indisputable that the funds rushed in to pump up prices, and now they're rushing out. This is a phenomenal run for the dollar. We're shorting the metals.'' Investment in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, has fallen 4.3 percent this week to 614.4 metric tons. The fund reached a record 705.9 tons on July 11. ``The safe haven of choice is the dollar, not the metals,'' Preston of Heritage West said.
- Philippine consumer prices may rise 12.6% or 12.7% this month because of typhoons that damaged crops, boosting food prices, citing central bank Deputy Governor Diwa Guinigundo. Consumer prices rose 12.5% in August, the fastest pace in 16 years.

Wall Street Journal:
- Benefiting from rip-roaring economic growth and solid loan demand, China's banks have been the envy of their peers the world over. Now that economic growth has moderated, their outsize performance will be hard to sustain. China's economic growth rate is slipping, taking corporate performance with it. Overall profit growth for 1,619 mainland-listed companies rose 16% in the first half, compared with a 49% rise in 2007, according to JPMorgan figures. Evidence of a slowdown in the property sector has some worried. Real estate sales were down 20% on the year in July, for example. As growth slows, the banks' outlook will depend largely on how disciplined they've been about managing credit risk. This hasn't been tested since the government's 2003 bad-loan bailout. Loan growth since then -- of more than 13% in each of the last two years -- has given Chinese banks among the most unseasoned collective loan books in Asia.

NY Times:
- Hedge Fund Glory Days Fading Fast. Several big funds have faltered in recent weeks, some of them spectacularly so. While many funds are still flying high, the average hedge fund has lost more than 4 percent this year, according to Hedge Fund Research, putting the industry on course for its worst year on record. The dimming fortunes of the industry have implications far beyond the rarefied world of hedge funds. Over the past decade, the size of this industry grew five-fold, as public pension funds, corporate pension funds and university endowments poured billions of dollars into these vehicles, in hopes of landing market-beating returns. A prolonged downturn might prompt some investors to rethink these investments or demand lower fees from managers, who typically collect annual management fees of 2 percent and then take a 20 percent cut of any profits. Trouble at hedge funds also might draw government scrutiny, given the amount of pension money sitting within these unregulated firms. It is now 5 to 10 percent more expensive for hedge funds to borrow from banks than it was a year ago, and banks are increasingly hesitant to lend to hedge funds for long periods. Some head-hunters are keeping watch lists of troubled hedge funds. Heidrick & Struggle, a hiring firm, has 100 hedge funds on its watch list and expects 50 to 80 to fail in the coming months, said Tim Holt, the partner who oversees the firm’s Wall Street recruiting. Most large pension funds and institutional investors have put the brakes on their hedge fund investments this year. New money invested in hedge funds in the first half of this year was just under $30 billion, a far cry from the $118 billion raised in the first half of 2007, according to Hedge Fund Research.
- Some of the world’s biggest corporations are facing intense pressure from China to allow the state-approved union to form in their Chinese plants and offices. But many companies fear admitting the unions will give their Chinese employees the power to slow or disrupt their operations and will significantly increase the cost of doing business there.

CNNMoney.com:
- The next bubble: pessimism. Yes, the banking sector is a mess. But with so many short sellers targeting the entire financial sector, this is starting to look like a bubble in reverse. Tulips. Internet stocks. Real estate. Commodities. What do all of these have in common? If you said that they were all bubbles, congratulations. So what's the next bubble? It may just be in short-selling. That may seem like an odd concept since bubbles are usually associated with assets inflating in value (before they go pop and the values sink fast). But this may be a "negative bubble." Instead of a state of booming activity ending in a sudden collapse, we may eventually have a state of collapsing activity ending in a sudden boom. Kim Hillyer, spokesperson with online brokerage TD Ameritrade (AMTD), said that short selling activity at the firm's approximately 7 million accounts has increased 16% in the past week. "What I hear and see is that people are making money by simply picking out individual financial firms and shorting them. There is a negative bubble in attitudes." said David Kelly, chief market strategist with JPMorgan Funds. "But if enough people say bad things at the same time they can make it reality." It's the exact opposite of the late 1990s when most investors thought tech stocks could go up and up forever and anyone who suggested otherwise was thought to be nothing more than a disgruntled bear ticked off about all the money they didn't make buying Amazon.com. Now pessimism is breeding more pessimism. People are starting to think that it will never get better and can only get worse and those brave few who try to rationally point out that it's not the end of the world get branded as foolish optimists who are probably angry about the money they've lost by buying bank stocks. the skepticism about the financial sector, markets and economy is now so extreme that you can't help think it is a bubble. "In twenty years, I've never seen a time where so many people are dismissive of economic numbers," Kelly said. The conventional wisdom now is that the sky is falling, just as it was a few years ago that home prices would keep skyrocketing ad infinitum.

IBD:
- American Public Education(APEI): Online University Taps Into An Active-Duty Military Student Body.

USA Today.com:
- Rates on 30-year mortgages dropped sharply this week, falling to the lowest level in five months, as the government's dramatic takeover of mortgage giants Fannie Mae and Freddie Mac lowered mortgage rates.Freddie Mac reported Thursday that its nationwide survey found that the average 30-year, fixed-rate mortgage dipped to 5.93% this week, from 6.35% last week.
- Spooked by fears of spreading global economic weakness, investors are pulling funds from once red-hot emerging markets. That's led to steep stock price declines from Kiev (down 61% this year) to Karachi (off 47%). So far this year, net foreign selling in seven Asian stock markets tracked by Bloomberg totaled more than $52 billion. That's driven Morgan Stanley's emerging markets index down more than 31%.

US News:
- Tainted infant formula from China may be on sale at ethnic groceries in this country, even though it is not approved for importation, federal officials warned on Thursday.

BusinessWeek.com:
- HP’s ‘End Run’ Around Windows. As Hewlett-Packard(HPQ) steps up efforts to make Microsoft’s operating system easier to use, some want to devise a rival version with Linux.

Reuters:
- A steep sell-off in shares of struggling investment bank Lehman Brothers Holdings Inc has revived questions about whether the U.S. Securities and Exchange Commission is doing enough to fight short-selling abuses. During late July and early August, Lehman was under the protection of an emergency SEC rule to curb abusive short-selling. The SEC also said in July it was boosting efforts to stop the spread of false rumors that threaten financial institutions. But the emergency rule expired August 12 with a promised permanent rule still to come. "It is no coincidence that the bottom of the market in July was the exact day that the SEC announced the rule to restrict naked short selling, and the top of the rally was the day when the SEC announced they would end the rule," said Dylan Wetherill, president of short interest tracking service ShortSqueeze.com. "If the SEC has an interest in helping to save the market from the powerful short sellers, it will reinstate (the rule to curb illegal shorting,)" Wetherill said. "There's strong political pressure to curb short selling and there is little support for naked short selling," said John Coffee, a professor at Columbia University Law School."They should follow up fairly promptly. Before the end of the summer... is appropriate for them to come up with proposed rules."

Financial Times:
- Democratic jitters about the US presidential race have spread to Capitol Hill, where some members of Congress are worried that Barack Obama's faltering campaign could hurt their chances of re-election. A Democratic fundraiser for Congressional candidates said some planned to distance themselves from Mr Obama and not attack Mr McCain. “If people are voting for McCain it could help Republicans all the way down the ticket, even in a year when the Democrats should be sweeping all before us," said the fundraiser, a former Hillary Clinton supporter. "There is a growing sense of doom among Democrats I have spoken to . . . People are going crazy, telling the campaign 'you've got to do something'."
- New steps to curb speculation in commodity markets have been launched by US regulators in response to growing pressure from Washington lawmakers. The Commodity Futures Trading Commission, the main regulator of commodity markets, told the US Congress on Thursday it was imposing "enhanced control" on dealing by Wall Street banks and forcing them to publish new data on their positions. The CFTC's measures will focus on swaps - private contracts between investment banks and clients such as hedge funds or airlines that provide an exposure to commodity prices without investing directly in futures. The CFTC said that of the 550 clients of swap dealer it has identified through an unprecedented special survey, at least 18 were above the exchange limits thanks to the use of on-exchange and swap trading.

China Daily:
- The environmental cost of China's economic growth in 2005 outweighed the gains, the author of a report from the Chinese Academy of Sciences told China Daily yesterday. Shi Mingjun, a professor at the academy's Research Center on Fictitious Economy & Data Science, said the cost of such things as the exploitation of natural resources, ecological degradation and environmental pollution was 2.75 trillion yuan ($401.7 billion) in 2005, or 13.9 percent of the total output for the year. The growth in GDP for the year was 2.24 trillion yuan. "If we calculate the real cost to the environment and natural resources, the losses are greater than the gains," he said. "And as the nation's growth pattern has changed little over the past two years, the conclusions are likely to be the same for 2006 and 2007," he said. The results validate the view that China's economic growth has relied mainly on the input of natural resources and is causing enormous environmental losses, Shi said. "Such a growth model is unsustainable."

Late Buy/Sell Recommendations
Citigroup:
- Reiterated Buy on (CSCO), target $27.
- Rated (RIG) Buy, added to Top Picks Live list, target $159.
- Reiterated Buy on (GME), target $66.
- Reiterated Buy on (POT), target $264.

Night Trading
Asian Indices are -.50% to +1.25% on average.
S&P 500 futures -.25%.
NASDAQ 100 futures -.28%.

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Earnings of Note
Company/EPS Estimate
- None of note

Economic Releases
8:30 am EST
- The Producer Price Index for August is estimated to fall -.5% versus a 1.2% gain in July.
- The PPI Ex Food & Energy for August is estimated to rise .2% versus a .7% gain in July.
- Advance Retail Sales for August are estimated to rise .2% versus a -.1% decline in July.
- Retail Sales Less Autos for August are estimated to fall -.2% versus a .4% gain in July.

10:00 am EST
- Preliminary Univ. of Mich. Consumer Confidence for September is estimated to rise to 64.0 versus 63.0 in August.
- Business Inventories for July are estimated to rise .5% versus a .7% gain in June.

Upcoming Splits
- None of note

Other Potential Market Movers
- The (AGP) investor day, (CYMI) analyst day, Kaufman Brothers Investor Conference, Morgan Keegan Equity Conference and Thomas Weisel Healthcare Conference could also impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by airline and financial shares in the region. I expect US equities to open modestly lower and to rally into the afternoon, finishing modestly higher. The Portfolio is 100% net long heading into the day.

Stocks Finish at Session Highs, Boosted by Airline, Road&Rail, Restaurant, HMO, Bank, Steel and Oil Service Shares

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In Play

Stocks Higher into Final Hour on Short-Covering, Lower Commodity Prices and Bargain Hunting

BOTTOM LINE: The Portfolio is higher into the final hour on gains in my Biotech longs, Internet longs, Medical longs, Gaming longs and Emerging Market shorts. I covered all my (IWM)/(QQQQ) hedges, thus leaving the Portfolio 100% net long. The tone of the market is mildly negative as the advance/decline line is lower, most sectors are gaining and volume is above average. Investor anxiety is high. Today’s overall market action is bullish. The VIX is rising .98% and is above-average at 24.76. The ISE Sentiment Index is very low at 99.0 and the total put/call is high at 1.06. The total put/call hit an extremely high reading of 1.40 into this morning’s weakness. Finally, the NYSE Arms has been running around average most of the day, after peaking at 2.0 this morning, and is currently .62. The Euro Financial Sector Credit Default Swap Index is +.27% today to 92.83 basis points. This index is up from a low of 52.66 on May 5^th, but down from 129.46 basis points on March 20^th. The North American Investment Grade Credit Default Swap Index is +1.41% at 149.45 basis points. The TED spread is rising 2.61% to 1.21 basis points. The 10-year TIPS spread, a good gauge of inflation expectations, is rising 1 basis point to 1.96%, which is down 66 basis points in just over seven weeks and at the lowest level since August 2003. Oil continues to trade very poorly given the OPEC production cut, a larger-than-expected inventory decline, hurricane worries and Iranian shipping sanctions. Refinery Utilization is now at 78.3%, the lowest since the historic hurricanes in 2005 wreaked havoc with the Gulf energy infrastructure and slashed oil demand by refiners. I suspect a good part of today’s rebound is related to traders finally beginning to price in the possibility of sub-$100 oil. The (XLF) has been very resilient given recent news. The etf continues to hold its recent range of $19.50-$23.50, which is a broad market positive. Many market leading stocks are posting meaningful gains today. These stocks are just too cheap in most cases. I am seeing evidence of size buyers finally stepping up to the plate. The Shanghai Composite, the world’s worst-performing major stock market, fell another 3.3% last night and is down 65.5% from its record set in October of last year. It continues to track closely with the bubble-bursting pattern of the Nasdaq in 2000-2001. The US Dollar continues to trade very well, but is getting extended again short-term. The AAII % Bulls dropped to 29.3% and the % Bears jumped to 54.9% this week, which is a big positive. Nikkei futures indicate an +73 open in Japan and DAX futures indicate a +18 open in Germany tomorrow. I expect US stocks to trade modestly higher into the close from current levels on lower commodity prices, short-covering and bargain-hunting.

Today's Headlines

Bloomberg:
- Families and friends of the 2,751 people who perished when two hijacked jets slammed into the World Trade Center's twin towers convened at Ground Zero today to observe the seventh anniversary of the worst terrorist attack on U.S. soil. Bells tolled in Zuccotti Park, a block from Ground Zero, at 8:46 and 9:03 a.m., marking the moments when planes crashed into each tower. They tolled again at 9:59 and 10:29 a.m., when the buildings collapsed into a fiery cloud of smoke and debris.
- The US dollar rose to a one-year high against the euro on signs global growth is slowing, and the yen strengthened on speculation investors will sell higher-yielding assets funded by loans in Japan. ``Perception of risk has expanded globally,'' said Robert Sinche, head of global currency strategy at Bank of America Corp. in New York. ``Longer-term investors are unwinding their short-dollar positions. The dollar has momentum with it as the capitulation goes on.'' ``The global slowdown has dimmed the allure of higher yields abroad,'' wrote Benedikt Germanier, a currency strategist at UBS AG in Stamford, Connecticut, in a research note to clients today. ``Dollar demand sparked by U.S. investors' repatriation flows in early August has reached the point of feeding on itself.'' ``The commodity bubble is popping,'' said Dustin Reid, a senior currency strategist at ABN Amro Bank NV in Chicago. ``Oil exporters have less dollars to recycle. The pace of diversification has slowed down. The dollar will remain bid.''
- Platinum fell to a 20-month low as the dollar gained against the euro, cutting demand for the metal as a hedge against inflation. Palladium sank to the lowest price in almost three years. ``Precious metals markets continue down across the board,'' Miguel Perez-Santalla, a sales vice president at Heraeus Precious Metals Management in New York, said today in a note to clients, citing the rising greenback. ``The dollar should continue to strengthen and the metals will continue to follow as the highly leveraged investment market keeps on bailing out.'' ``In conversations with investors and funds, what has happened in platinum is only a more extreme example of recent commodity flows,'' John Reade, the head of metals strategy at UBS AG in London, said today in a note to clients. ``For a metal with apparently superior supply and demand fundamentals and low stocks, to experience such a dramatic sell-off has shocked us.''
- Crude oil fell more than $2 a barrel and gasoline advanced as Hurricane Ike headed across the Gulf of Mexico for refineries along the Texas coast. ``Ike is aimed at the refineries,'' said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. ``It looks like refiners will be down for a while and the crude will pile up.
- The Baltic Dry Index, a measure of shipping costs for commodities, fell to its lowest since March 2007 on a lack of demand to haul cargoes in the Pacific and a slowing Chinese economy. The Baltic Dry Index of costs for international trade routes shed 133 points, or 2.6%, to 4,893 points. That’s a 17^th straight decline and a 46% slide for the year.
- The cost to protect against a default by securities firm Lehman Brothers(LEH) fell from a record. Five-year credit-default swaps on NY-based Lehman fell to 650 basis points, after trading at a record 790 basis points, according to Phoenix Partners.
- Russia, which fought a five-day war with neighboring Georgia last month, will boost defense spending 26 percent to a post-Soviet record next year as it adds weapons and raises salaries, Finance Minister Alexei Kudrin said.

Wall Street Journal:
- If Barack Obama loses the presidential election, it may well be the result of a public perception that he is detached and elitist -- a politician whose expressions of empathy for hard-working Americans stem more from abstract solidarity than a real connection to the lives of millions of citizens.

CNBC.com:
- Lehman Brothers(LEH) CEO Fuld is seeking a buyer for the fourth-largest US securities firm. Fuld “is clearly shopping Lehman, not just a piece of it,” Charlie Gasparino reported.

CNNMoney.com:
- How the KGB took over Russia’s economy.

Market Watch:
- Home Price Declines, Low Mortgage Rates Motivating Home Buyers. Seventy-seven percent of first-time homebuyers say lower home prices played critical role in decision to purchase home.

intrade.com:
- For the first time since it became apparent that Senator McCain would be running against Senator Obama for President, the odds of a McCain victory on intrade.com are higher than those of an Obama win, by a margin of 51.6%-47.9%.

US Commodity Futures Trading Commision(CFTC):
- The aggregate amount of commodity index trading occurring both OTC and on-exchange is estimated to be $200 billion as of June 30, 2008 – of which $161 billion was tied to commodities traded on U.S. markets regulated by the CFTC. Based upon the staff’s analysis, the Commission report includes the following recommendations:
1. Remove swap dealers from the commercial category in the Commitments of Traders Reports and create a new swap dealer classification for reporting purposes.
2. Develop and publish a new periodic supplemental report based on OTC swap dealer activity.
3. Create a new CFTC Office of Data Collection, whose sole mission is to collect, verify, audit, and publish all the agency’s commitments of traders information.
4. Establish more detailed reporting standards for certain large traders on regulated futures exchanges to ensure a more precise picture of their trading activity.
5. Consider elimination of bona fide hedge exemptions for swap dealers and the creation of a new, limited risk management exemption.
6. Request increased funding to successfully implement the above recommendations, along with additional funding sufficient to meet current mission requirements and any other additional responsibilities given to the agency.
7. Continue to encourage the clearing of OTC transactions.
8. Conduct a review of swap dealers’ futures trading activity to ensure that it is sufficiently independent of any affiliated commodity research.

USA Today:
- New data from a public registry that tracks health effects of the Sept. 11, 2001 attacks suggest that up to 70,000 people developed post-traumatic stress disorder as a result of the terror attacks. The new analysis released Wednesday from the World Trade Center Health Registry provides the most comprehensive picture yet of the health of people who were affected by the attacks. Participants agreed to be tracked for up to 20 years after 2001.
- As New York City's crime rate continues to drop, police officers are using their weapons less, and last year they fired the fewest times since the police department began recording the statistic three decades ago.

CBCnews:- Ontario will not move the economic yardsticks at all in 2008, resulting in Canada's GDP growth rate slipping 75 per cent this year, according to a new forecast by Scotiabank Economics.

Financial Post:
- Canadians have been flooding into the depressed U.S. housing market, purchasing a record number of homes south of the border, and twice as many as a year earlier. Armed with what until recently was a strong currency, most were also paying cash, according to the 2008 National Association of Realtors annual profile of international home buying activity in the United States. Canadians have replaced Mexicans as the top foreign buyers of U.S. properties, the survey revealed.

Bild:
- Germany is at high risk from attack by al-Qaeda terrorists, according to a new report prepared by the head of the Federal Criminal Office. In his report to parliament, BKA chief Joerg Ziercke said the decision to target Germany has been made “at the highest level” of al-Qaeda and other terrorist groups. Ziercke’s BKA organization is the German equivalent of the FBI in the US.

Moscow Times:
- Mikhail Khodorkovsky, the imprisoned former OAO Yukos Oil Co. billionaire said oil at $70 a barrel or more provides sufficient financial incentive for innovators to develop alternative fuels. Crude at $70 allows new technologies to “gradually” replace fossil fuels with other energy sources.

Irish Times:
- Ireland unemployment will continue to drift upwards to over 8 per cent in 2009, the Economic and Social Research Institute (ESRI) is expected to forecast in its next quarterly economic commentary due later this month.

Espanola:
- Spanish Finance Minister Pedro Solbes expects economic growth in the country to remain flat in the second half of this year, citing an interview. Solbes expects the economic situation in Spain to worsen next year.

Al-Hayat:
- OPEC President Chakib Khelil said crude oil prices are unlikely to rise in the coming months because commercial oil stockpiles are “very high” and OPEC is overproducing. Global inventories, which already hold a surplus, will be boosted further by output from non-OPEC producers such as Russia, Norway and Brazil by the beginning of next year, citing Khelil. The combination of lower oil demand, rising stockpiles and a strengthening dollar may drag crude prices down, Khelil said.

Emirates Business 24/7:
- The six Gulf Cooperation Council states, including Saudi Arabia and the United Arab Emirates, agreed to begin free trade talks with Iran, citing Khalaf Al Manai, Qatar’s undersecretary of finance. The negotiations have been sought by Iran for over a decade.

Bear Radar

Style Underperformer:

Large-cap Value (-1.25%)

Sector Underperformers:

I-Banks irlind (-2.50%), Insurance (-1.79%) and Telecom (-1.56%)

Stocks Falling on Unusual Volume:

BID, WB, IRE, AIB, DB, AXA, LXU, KNXA, TLEO, IDCC, DBD, NRT, MER, SRZ and AIG

Stocks With Unusual Put Option Activity:

1) MET 2) GPS 3) IDCC 4) KEY 5) FITB