Friday Watch

Night Trading

• Asian equity indices are -.25% to +.75% on average.
• Asia Ex-Japan Investment Grade CDS Index 115.5 -6.75 basis points.
• Asia Pacific Sovereign CDS Index 85.0 -3.75 basis points.
• FTSE-100 futures -.04%.
• S&P 500 futures +.24%.
• NASDAQ 100 futures +.23%.

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 Germany GDP report could also impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by technology and real estate shares in the region. I expect US stocks to open modestly higher and to maintain gains into the afternoon. The Portfolio is 75% net long heading into the day.

Bear Radar

Style Underperformer:

• Large-Cap Value -.15%

Sector Underperformers:

• 1) Airlines -.96% 2) Banks -.75% 3) Agriculture -.67%
  

Stocks Faling on Unusual Volume:

• LXU, BAK, CBSH, BBG, PBR, TLYS, SCHL, STJ, HTWR, DE, SQM, NOW, CEVA, TAHO, MSB, SBS, GWAY, GEOS, JBHT, SJT, PKX, BIDU, DVA, IOC and QIHU

Stocks With Unusual Put Option Activity:

• 1) STJ 2) STI 3) DE 4) GT 5) TOL
  

Stocks With Most Negative News Mentions:

• 1) EV 2) SCHL 3) CBSH 4) BBY 5) JCP
  

Charts:

• ETFs Falling on Unusual Volume
• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer:

• Small-Cap Growth +.14%

Sector Outperformers:

• 1) Gold & Silver +1.25% 2) Software +.88% 3) Education +.72%
  

Stocks Rising on Unusual Volume:

• CRM, VVUS, FLO, SKX and SRPT

Stocks With Unusual Call Option Activity:

• 1) MDLZ 2) STJ 3) ALXA 4) CLSN 5) BSX
  

Stocks With Most Positive News Mentions:

• 1) SKX 2) WYNN 3) DSW 4) XOM 5) CPB

Charts:

• ETFs Rising on Unusual Volume 
• Stocks Rising on Unusual Volume

Wednesday Watch

Evening Headlines 
Bloomberg: 

• EU Stumbles on Greek Debt Reduction After Clash With IMF. European finance ministers failed to agree on a debt-reduction package for Greece after battling with the International Monetary Fund over how to nurse the recession- wracked country back to fiscal health. With creditors led by Germany refusing to put up fresh money or offer debt relief, the finance chiefs were unable to scrounge together enough funds from other sources to help alleviate Greece’s debt burden, set to hit 190 percent of gross domestic product in 2014. More than 11 hours of talks broke up early today in Brussels with praise for the Athens government’s economic overhaul and a declaration that an accord on the financing package will wait at least until a hastily arranged meeting of the ministers on Nov. 26.
• Euro Finance Chiefs Seek Near-Term Greek Fix, Fight on Debt Path. European governments are trying to plug an immediate hole in Greece’s finances and prevent new ones from opening in the latest installment of the debt-crisis brinkmanship rattling the euro economy. Finance ministers are battling among themselves and with the International Monetary Fund to find 15 billion euros ($19.2 billion) through 2014 for Greece and seek an elusive formula for putting its debt on a sustainable path. A crisis meeting in Brussels that began at 5 p.m. yesterday is shadowed by concerns that a two-year fix will leave Greece needing more money and possibly more debt relief to emerge from the spiral of deficits and recession. “It’s essential now that we take a decision on a set of credible measures to introduce debt sustainability,” European Economic and Monetary Commissioner Olli Rehn told reporters as he entered the meeting. “At the same time, we have to be ready to take further decisions in the light of future developments and of course conditional and dependent of full implementation of reforms of the program by Greece over the coming years.” Officials said the negotiations won’t make a final decision to release the next 44 billion-euro tranche of aid to Greece, partly because parliaments in Germany, the Netherlands and Finland have yet to weigh in.
• EU Splits Leave Single Insurance Rules Plan on Sidelines. The European Union’s 12-year push to introduce a common set of rules for the region’s insurance industry is close to being sidelined as some of the biggest member states prepare to introduce the regulations piecemeal. 
• Euro Weakens, Asian Stocks Erase Gain as Greek Aid Talks Falter. The euro fell and Asian stocks erased gains after European finance ministers failed to agree on a debt-reduction package for Greece. The yen touched a seven- month low as Japan’s exports dropped more than expected. The euro declined 0.5 percent to $1.2748 as of 1:14 p.m. in Tokyo.
• China’s Shanghai Index Falls Below 2,000; Heads for 2009 Low. China’s stocks fell, sending the Shanghai Composite (SHCOMP) Index below 2,000 for a second day this week. The Shanghai Composite dropped 0.5 percent to 1,999.19 as of 11:20 a.m. local time, poised for its lowest close since January 2009. The gauge first broke above 2,000 in July 2000 and almost tripled to 6,092.06 on Oct. 16, 2007, according to data compiled by Bloomberg dating to 1991. “After more than 10 years of development, the 2,000 level is breached and we are back to square one,” Zhang Gang, a strategist at Central China Securities Holdings Co., said by phone from Shanghai on Nov. 20.
• China Stocks’ Triangle Break Signals Losses: Technical Analysis. The Shanghai Composite Index (SHCOMP) will likely fall to 1,700, a 15 percent drop from yesterday’s close, after the benchmark index broke through a triangular consolidation trading pattern, according to Chart Partners. The benchmark index’s slide below “big resistance” at 2,100 and the break of the triangle foreshadow a retreat to 1,700 in the “medium term” and possibly to 1,500, Thomas Schroeder, Bangkok-based managing director at Chart Partners, wrote in an e-mailed response to questions.
• Feldstein Says U.S. Fixing Cliff May Not Avoid Recession. Harvard University economics professor Martin Feldstein said the U.S. economy may fall into a recession next year even if Congress and President Barack Obama avert the full brunt of the so-called fiscal cliff. “You are perilously close to the edge of another recession even if we don’t go over the fiscal cliff,” Feldstein said in a Bloomberg Television interview from New York. The end of payroll tax cuts will reduce gross domestic product by about 1 percentage point in 2013, and other tax increases and spending cuts may bring “over 2 percent of GDP tightening,” he said. 
• Al-Qaeda ‘Cancer’ Spreads With U.S. Chasing, Panetta Says. Al-Qaeda and affiliated terrorist groups have spread beyond Afghanistan and Pakistan and must be pursued by other countries with help from U.S. military commandos, Defense Secretary Leon Panetta said today. “We have slowed the primary cancer -- but we know the cancer has also metastasized to other parts of the global body” despite American military gains against al-Qaeda in Pakistan, Afghanistan, Somalia and Yemen in the last decade, Panetta said in a speech today in Washington.
• CFTC Eases Swap Pay-to-Play Rules With Government Pension Plans. Wall Street banks have been freed from Dodd-Frank Act limits on political contributions intended to limit fraud in swaps with government pensions. The CFTC said in a letter today that it would not enforce so-called pay-to-play restrictions on banks selling swaps to the pensions. The restrictions apply to dealers that have made political contributions to municipal officials in the two years before a trade.
• Silver Trade Drops 30% on China Bourse as Industrial Demand Ebbs. Silver trading on the largest spot market in China, the second-largest consumer, tumbled this year as slowing growth cut industrial use, said an industry official. Volume on the Shanghai White Platinum & Silver Exchange dropped about 30 percent from a year earlier to 1,000 metric tons, said Gao Huijie, chief executive officer. Industrial demand represents most transactions on the bourse, where about 20 percent of China’s annual demand is traded, he said.

Wall Street Journal:

• Most Households Face 'Fiscal Cliff'. Lower-Income People in Particular Would See Steep Tax Increases if Washington Can't End Budget Dilemma by Year-End. 
• Sea Tensions Erupt at Asian Summit.
• Israel, Hamas Press for Advantage. Both Sides Step Up Attacks Amid Talk That Cease-Fire Looms; Some See a Gain in Stature for Gaza Strip's Leaders. 

Zero Hedge:

• Is The Largest Weekly Inflow Into Bank Savings Accounts On Record, A Flashing Red Alarm? (graphs)
• Meanwhile, In The Land Of The Setting Sun... And Exports. (graphs)
• Now The Hard Part Begins: The China Challenge.
• Kyle Bass On The End Of The Debt Super-Cycle. (video)
• Tell Me Again... Which Of These Nations Is Communist?

Business Insider: 

• REPORT: Hedge Fund Billionaire Steve Cohen Is 'Portfolio Manager A' In The Latest Insider Trading Case. 
• Top Nomura Economist Is Skeptical Of Fiscal Cliff Progress — And There's Good Reason To Take Him Seriously. At this point it does not appear that the two sides have exchanged specific proposals. Consequently, it is not clear whether these differences can be bridged.
• Homeland Security Wants To Double Its Domestic Drone Fleet. 
• Elmo Toymaker Hasbro Responds To Underage Sex Scandal Surrounding The Kids' Character.

CNN:

• Americans donate just $8 million to cut national debt. $7.7 million is barely a drop in the bucket. That sum represents just 0.000007% of the approximately $1.1 trillion deficit the U.S. ran in the latest fiscal year. The country's total outstanding debt is more than $16 trillion -- perilously close to the $16.394 trillion debt ceiling, and the Treasury Department expects to hit the legal borrowing limit by the end of this year.

Reuters: 

• FBI probing allegations around HP(HPQ) and Autonomy: source. 
• Euro zone bogged down in myriad of Greek debt options. Greece's debt cannot be cut to 120 percent of GDP by 2020, the level deemed sustainable by the IMF, unless euro zone member states write off a portion of their loans to Greece, a document prepared for euro zone finance ministers shows. The 15-page document, circulated among ministers, the European Central Bank and the IMF for a meeting that began on Tuesday and is still going on 10 hours later, sets out in black-and-white how far off-track Greece is in reducing its debt to the IMF-imposed target, from a level around 170 percent of GDP now.
• Salesforce.com(CRM) results beat Street. Business software provider Salesforce.com Inc beat Wall Street expectations for the third quarter and maintained its earnings outlook for the rest of its fiscal year despite the uncertain economic outlook. The company said it seemed to have weathered the effects of Superstorm Sandy and fears among its clients surrounding the "fiscal cliff" as it projected sales for the current quarter, ending Jan. 31, of between $825 million and $830 million, roughly in line with analysts' average forecast of $829.9 million. The fiscal cliff refers to U.S. government spending cuts and tax rises due to be implemented under existing law in early 2013 that may cut the federal budget deficit but also tip the economy back into recession. Shares rose 1.8 percent to $148.59 in extended trade.
• Facebook(FB) director Andreessen sells $54 mln in shares.
• Scholastic(SCHL) cuts outlook as sales of high-margin products fall. Children's book publisher Scholastic Corp reduced its forecast for the fiscal year ending May 31, 2013 on lower sales in its high-margin educational business.
• Failed talks with union spells end to Twinkie-maker Hostess. Hostess Brands Inc will proceed with a plan to go out of business after the maker of Twinkie snack cakes said last-minute talks with striking workers broke down on Tuesday. Hostess and its striking bakers union were pressed by New York Bankruptcy Judge Robert Drain into mediation to try to end the walkout and save the company and its 18,500 jobs.

Telegraph: 

• EU leaders warn Greece's aid could be delayed. European leaders warned that the vital tranche of international aid may not be released to Greece until December as in-fighting and indecision dogged another summit in Brussels.

Economic Daily:

• China Studies Expanding Nationwide Property Tax. China will steadily expand the scope of value-added taxes and reduce business taxes, according to an article written by Minister of Finance Xie Xuren. China will continue to increase tax incomes of local governments, Xie wrote.

Shanghai Securities News:

• China Shouldn't Loosen Property Control Policies. China should also accelerate the nationwide introduction of property tax trial, citing Wang Juelin, a researcher at the Ministry of Housing and Urban-Rural Development.

Evening Recommendations 

• None of note

Night Trading

• Asian equity indices are -.50% to unch. on average.
• Asia Ex-Japan Investment Grade CDS Index 122.25 +1.25 basis points.
• Asia Pacific Sovereign CDS Index 88.75 -1.75 basis points.
• FTSE-100 futures -.27%.
• S&P 500 futures -.61%.
• NASDAQ 100 futures -.53%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (DCI)/.34
• (DE)/1.88 

Economic Releases
8:30 am EST

• Initial Jobless Claims are estimated to fall to 410K versus 439K the prior week.
• Continuing Claims are estimated to rise to 3345K versus 3334K prior.

8:58 am EST

•   The Preliminary Markit US PMI for November is estimated to fall to 51.0 versus 51.3 in October.

9:55 am EST

• Final Univ. of Mich. Consumer Confidence for November is estimated to fall to 84.5 versus a prior estimate of 84.9.

10:00 am EST

• Leading Indicators for October are estimated to rise +.1% versus a +.6% gain in September. 

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory build of +1,000,000 barrels versus a +1,089,000 barrel gain the prior week. Gasoline supplies are estimated to rise by +1,000,000 barrels versus a -440,000 barrel decline the prior week. Distillate supplies are estimated to fall by -1,000,000 barrels versus a -2,539,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to rise by +.5% versus a +.6% gain the prior week.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Spanish/German 10Y bond auctions, China HSBC Manufacturing PMI, weekly MBA mortgage applications report, weekly Bloomberg Consumer Comfort Index and the Bloomberg Economic Expectations Index for November could also impact trading today.

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

Stocks Slightly Lower into Final Hour on Rising Global Growth Fears, Fiscal Cliff Worries, Eurozone Debt Angst, Tech/Commodity Sector Weakness

 Broad Market Tone:

• Advance/Decline Line: Lower
  
• Sector Performance: Most Sectors Declining
• Volume: Below Average
• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• VIX 15.33 +.59%
• ISE Sentiment Index 106.0 -18.5%
• Total Put/Call 1.07 +44.59%
• NYSE Arms 1.08 +106.97%

Credit Investor Angst:

• North American Investment Grade CDS Index 101.75 bps -1.25%
• European Financial Sector CDS Index 169.90 bps -3.79%
• Western Europe Sovereign Debt CDS Index 116.68 bps -2.3%
• Emerging Market CDS Index 244.75 bps +.18%
• 2-Year Swap Spread 12.25 -.75 basis point
• TED Spread 24.0 +.25 basis point
• 3-Month EUR/USD Cross-Currency Basis Swap -27.75 +1.0 basis points

Economic Gauges:

• 3-Month T-Bill Yield .07% -1 basis point
• Yield Curve 140.0 +4 basis points
• China Import Iron Ore Spot $120.60/Metric Tonne-1.79%
• Citi US Economic Surprise Index 48.40 +1.6 points
• 10-Year TIPS Spread 2.40 +1 basis point
  

Overseas Futures:

• Nikkei Futures: Indicating +43 open in Japan
• DAX Futures: Indicating -5 open in Germany

Portfolio:

• Slightly Higher: On gains in my Medical/Biotech sector longs
• Disclosed Trades: None
• Market Exposure: 50% Net Long

Today's Headlines

Bloomberg:

• French Downgrade Widens Gulf With Germany as Talks Loom: Economy. France’s loss of the top credit rating at Moody’s Investors Service may weaken President Francois Hollande’s leverage in European budget talks and deepen concern in Germany over its neighbor’s lagging competitiveness. The downgrade late yesterday of Europe’s second-biggest economy underscores the concern expressed by allies of German Chancellor Angela Merkel that the Socialist Hollande’s failure to recognize the urgency of France’s woes risks a deepening of Europe’s slump. “This downgrade will certainly increase pressure on France big-time,” Jan Techau, director of the Carnegie Endowment for International Peace office in Brussels, said today in a phone interview. “It gives Germany more of an edge over France.” With French bonds rallying since Standard & Poor’s stripped the country of its AAA credit rating in January, the impact of the Moody’s downgrade may be more political than financial. Just last week, German Finance Minister Wolfgang Schaeuble spoke out against his countrymen calling France the “sick man” of Europe. The day before, France’s Liberation newspaper ran a front-page article highlighting German anxiety about Hollande’s policies.
• French Swaps Rise on Downgrade as Bonds, European Banks Decline. The cost of insuring France’s government debt rose to a one-month high and its bonds declined after Moody’s Investors Service cut the nation’s credit rating. European bank stocks fell before the region’s finance ministers meet to discuss Greece’s debt burden. Credit-default swaps on France jumped to 92 basis points, the highest since Oct. 15, and the yield on the country’s 10- year bonds climbed five basis points to 2.12 percent at 7:52 a.m. in New York. German bund yields also increased. The Stoxx Europe 600 Index dropped 0.2 percent and Standard & Poor’s 500 Index futures were little changed. Commodities slid as crude oil fell from a one-month high. “The downgrade raises concerns about the structure of the euro zone and adds more of a burden on to the shoulders of German sovereign creditworthiness,” said John Wraith, a fixed- income strategist at Bank of America Merrill Lynch in London. “It’s another sign that things continue to deteriorate in Europe.”
• Hewlett-Packard(HPQ) Profit Forecast; $8.8 Billion Charge. Hewlett-Packard Co. plunged to the lowest price in a decade after it said the British software company purchased last year falsified its finances, resulting in an $8.8 billion charge to write down the value of the Autonomy Corp. business. “HP is extremely disappointed to find that some former members of Autonomy’s management team used accounting improprieties, misrepresentations and disclosure failures to inflate the underlying financial metrics of the company, prior to Autonomy’s acquisition by HP,” Palo Alto, California-based Hewlett-Packard said today in a statement.
• Housing Starts in U.S. Increase. Housing starts rose 3.6 percent to a 894,000 annual rate, the fastest since July 2008 and exceeding all estimates in a Bloomberg survey, Commerce Department figures showed today in Washington. The median forecast of 82 economists called for an 840,000 pace. Permits for the construction of single-family homes also advanced to the highest in four years.
• Oil Falls on Signs Gaza Cease-Fire Imminent. Oil tumbled from a one-month high in New York as Hamas said a draft accord for a cease-fire that would end fighting between Israel and Palestinian groups in the Gaza Strip is almost ready. Futures dropped as much as 3.5 percent after Hamas official Osama Hamdan said by phone from Beirut that an announcement was likely at 9 p.m. Cairo time and that it will take effect at midnight. His comments came as U.S. Secretary of State Hillary Clinton flew to the region to join truce talks. Prices surged 2.7 percent yesterday as the conflict escalated. “Crude is down because cooler heads are prevailing in the Middle East,” said Stephen Schork, president of the Schork Group Inc., an energy advisory company in Villanova, Pennsylvania. “The huge run-up yesterday is being exorcised.” Crude oil for January delivery declined $2.92, or 3.3 percent, to $86.36 a barrel at 12:25 p.m. on the New York Mercantile Exchange.
• Dimmer Profit Outlook Seen Weighing on Stocks: Chart of the Day. Lower earnings estimates are dragging down stocks from this year's highs and their full effect has yet to be felt, according to Hasan S. Tevfik, a global equity strategist at Citigroup Inc. Since the first week of May, the revision index has been less than zero, which means there were more estimate cuts than increases among analysts. "ERI remains an anchor for global equity markets," Tevfik wrote. A similar disparity between estimate changes and share prices in 2011 was resolved when stocks declined in July and August of that year, he added. Earnings projections for next year are poised to decline further, he wrote, citing the gap between analysts' estimates for companies and strategists' projections for stock indexes.
• Ex-SAC Manager Martoma Charged in Record Insider-Trading Scheme. A former portfolio manager for Steven A. Cohen’s SAC Capital Advisors LP was charged with what U.S. prosecutors called a record-setting insider-trading scheme that netted as much as $276 million for the hedge fund. Prosecutors in the office of U.S. Attorney Preet Bharara in Manhattan today charged the portfolio manager, Mathew Martoma, with trading on insider tips about clinical trials of bapineuzumab, a drug to treat Alzheimer’s disease. Martoma, 38, is accused of advising Cohen to sell shares of Wyeth LLC (PFE) and Elan Corp. (ELN) before bad news about the drug's prospects was announced. Cohen's firm made $276 million in profits or losses avoided after receiving the advice, prosecutors said in a criminal complaint.

Wall Street Journal: 

• Hamas Says Cease-Fire Deal 'Close'; Clinton Heads to Region.
  
• Honeywell(HON) Readies for Defense Cuts. 

MarketWatch.com:

• Recession in Europe is bad news for U.S.

CNBC: 

• Estate Tax Going Up, but 'People Aren't Paying Attention'. 
• Morgan Stanley’s(MS) Doom Scenario: Major Recession in 2013. The global economy is likely to be stuck in the “twilight zone” of sluggish growth in 2013, Morgan Stanley has warned, but if policymakers fail to act, it could get a lot worse.
• ‘Tide Turning’ Against France, Say Economists. As France loses its coveted AAA-rating, economists are questioning whether the tide is turning for a country that has enjoyed record low borrowing costs, and indeed whether the second largest economy in the euro zone is in jeopardy.

Zero Hedge:

• Europe Is Now Sinking Fast. (graph) 
• Bernanke Promises More Of The Same, Warns Of Fiscal Cliff - Live Webcast. 
• The World Wide Web Of Debt. 
• On Political Brinksmanship And Stock Market 'Vigilantes'. 
• Jeremy Grantham Looks At The Future Of America: "On The Road To Zero Growth".

Business Insider:

• The 45 Stocks Hedge Fund Managers Love The Most. 
• Whistleblower Files Lawsuit Alleging Major Corruption And Sexual Misconduct At The SEC. 
• Voice Of Elmo Resigns As Second Underage Sex Accuser Comes Forward. 
• Art Cashin Has Figured Out Where All Of This 'Fiscal Cliff' Optimism Is Coming From. 
• Kim Jong-un Is Having Serious Trouble Reining In North Korea's Military.

New York Times: 

• Newcomer to Ratings Game Gives France a Dim View. Hours after the French government suffered a debt downgrade by the ratings agency Moody’s Investors Service, a new nonprofit agency offered a similar critique Tuesday.

Reuters: 

• Copper slips as euro zone growth concerns resurface.
• Egypt agrees deal for $4.8 bln IMF loan. Egypt reached a preliminary agreement on Tuesday with the International Monetary Fund for a $4.8 billion loan, a step seen as vital to shoring up the nation's finances. 
• Fed's Lacker warns on US monetary policy 'thresholds' plan. 
• Hamas feels more at home in a changing Arab world. Hamas leader Khaled Meshaal looked like a man at home in Cairo this week as he used the Egyptian capital to declare terms for a ceasefire with Israel, his confidence reflecting the historic changes shaping an Arab world more supportive of his cause. In Cairo for talks on the Gaza crisis, the bearded Hamas leader in exile has been warmly received in a country where officials viewed his movement with suspicion bordering on outright hostility when Hosni Mubarak was in power.

Telegraph:

• Eurozone split over Greek debt. Greece's international lenders remained split on how to deal with Greece's next loan deal and it was not clear if a deal would be reached at a key meeting being held in Brussels this evening, which could be set to turn into an all-nighter.

Les Echos:

• ArcelorMittal Sees Europe Steel Demand Drop in 2013. The company told unions at a meeting Nov. 19 in Paris that it doesn't expect any improvement next year, citing labor rep. Francois Pagano. 

The Economic Times: 

• Moody's to review EFSF, ESM ratings after French cut. Credit ratings agency Moody's said on Tuesday it would assess the ratings of the euro zone's EFSF and ESM bailout funds in light of its decision to strip France of its AAA rating on Monday. "The ratings of the European Financial Stability Fund (EFSF) and European Stability Mechanism (ESM) remain (P)Aaa and Aaa respectively, in each case with a negative outlook," Moody's said in a statement. "Moody's will assess the implications of the downgrade of the French government's rating for the EFSF's and ESM's ratings as a matter of course, focusing in particular on whether the support available from the remaining Aaa guarantors and shareholders is consistent with the EFSF and ESM retaining the highest ratings," it said.

Xinhua:

• Wen Says Huangyan Island Belongs to China. Chinese Premier Wen Jiabo said here Tuesday that the Huangyan Island is an integral part of China's territory, and its sovereignty is indisputable. Wen, when responding to remarks from leaders of certain countries at the seventh East Asia Summit, said China's actions to defend the island's sovereignty is legitimate and necessary.

Yunnan Info Daily:

• China CBRC Halts Some Infrastructure, Vehicle Loan Trusts. The China Banking Regulatory Commission ordered some trust companies to halt their vehicle loan, infrastructure and pool businesses, citing people in the trust industry.