Bull Radar

Style Outperformer:

• Large-Cap Growth +.12%

Sector Outperformers:

• 1) Steel +1.98% 2) Gaming +1.08% 3) Alt Energy +.92%
  

Stocks Rising on Unusual Volume:

• VISN, OPK, NOAH, INSM, SCHW, PXD, BBY, FDX, AMCC, ECYT, ESI, ATI, X, AMTD, DXCM and BBY

Stocks With Unusual Call Option Activity:

• 1) NUS 2) PXD 3) SYNA 4) RSH 5) FU

Stocks With Most Positive News Mentions:

• 1) SCHW 2) BA 3) JNJ 4) KBH 5) AAPL
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume

Tuesday Watch

Evening Headlines 
Bloomberg:

• Asian Stocks Rise Amid Signs U.S. May Broker Deal on Debt. Asian stocks rose, with the regional index heading for a five-month high, as Senate leaders said they’re optimistic they will forge a deal to reopen the U.S. government and avoid a breach of the debt limit this week. James Hardie Industries SE, a maker of building materials that gets about 70 percent of sales from the U.S., increased 1.5 percent in Sydney. Mazda Motor Corp. (7261) jumped 3.3 percent in Tokyo after Macquarie Group Ltd. and BNP Paribas raised ratings on the carmaker. Hankook Tire Co., South Korea’s No. 1 tiremaker, advance 1.8percent after announcing plans to build its first factory in the U.S. The MSCI Asia Pacific Index gained 0.5 percent to 141.57 as of 11:07 a.m. in Tokyo, with almost three shares rising for each that fell.

• Rebar Little Changed as Investors Weigh Steel Output, Iron Ore. Steel reinforcement-bar futures in Shanghai were little changed as China’s steel output climbed and iron ore prices increased. Rebar for delivery in January on the Shanghai Futures Exchange was at 3,628 yuan ($594) a metric ton at 10:21 a.m. local time from 3,625 yuan yesterday.

• Coal Slump Leaves Australia Port Half-Used, Bank Lenders at Risk. Australia & New Zealand Banking Group Ltd. (ANZ) and Westpac Banking Corp. are among lenders risking losses on $3 billion of loans backing a coal port in Australia that will be twice its required size. Wiggins Island Coal Export Terminal Pty, the group comprising the unfinished project’s owners, including Glencore Xstrata Plc (GLEN) and Wesfarmers Ltd. (WES), in 2011 borrowed the debt from 19 banks, according to data compiled by Bloomberg. When the port in the state of Queensland begins shipping in early 2015, only about half of its 27 million metric tons of initial annual export capacity will be used after a slump in coal demand, forecaster Wood Mackenzie Ltd. estimates. 

• China Challenges CME to SGX With Iron-Ore Futures Contract. China’s Dalian Commodity Exchange will start trading the country’s first iron-ore futures for physical delivery this week, challenging index-backed contracts by CME Group Inc. and Singapore Exchange Ltd. (SGX) Trading will begin Oct. 18 after the securities regulator approved the plan last week, the bourse in the northeastern port city said in a statement on its website yesterday. Chinese steelmakers, the world’s biggest iron-ore buyers, earlier this year questioned the reliability of a price index provided by Platts that became a benchmark after producers including Vale SA (VALE) and Rio Tinto (RIO) Group scrapped annual contract price talks in 2010. China started its own spot-trading platform last year, introducing a weighted average daily price in March. 

• China Steel Binge Spurs Record Hiring of Ore Carriers: Freight. Freight traders are hiring record numbers of iron-ore carriers in the spot market as Chinese steel production expands at the fastest pace in three years, spurring the biggest rally in shipping rates since 2009. 

• S&P Subpoenas Federal Reserve Board as Part of U.S. Suit. McGraw Hill Financial Inc. (MHFI)’s Standard & Poor’s unit seeks information from the board of governors of the Federal Reserve to bolster its defense against U.S. claims it misled investors in mortgage-backed securities. The credit rating company said it served subpoenas on the Federal Reserve board as well as the Federal Open Market Committee and the Federal Reserve Bank of New York, according to a filing today in federal court in Santa Ana, California.

• Fed Gets Bigger in Markets as QE Prompts New Tools. The Federal Reserve is getting more involved in debt markets as it tries to compensate for the impact of its almost $4 trillion balance sheet on short-term interest rates. Policy makers are testing a new tool intended to improve their control of near-term borrowing costs. The facility would allow banks, broker-dealers, money-market funds and some government-sponsored enterprises to lend the Fed unlimited amounts of cash overnight at a fixed rate in exchange for borrowing Treasuries in so-called reverse repo transactions.

• Saudi Aramco Plans ‘Massive’ Spending to Extend Field Life. Saudi Arabia, the world’s largest crude exporter, is making “massive investments” as it seeks a production buffer to guard against swings in global oil prices while addressing a decline in output from its older fields. Saudi Arabian Oil Co., the state-owned producer known as Saudi Aramco, plans to maintain spare output capacity of more than 2 million barrels a day, according to Chief Executive Officer Khalid Al-Falih. The Dhahran-based company raised its annual capital budget tenfold to $40 billion over the last decade and, in the past two years, has adjusted its daily production by more than 1.5 million barrels, he said.

Wall Street Journal:

• Senate Leaders in Striking Distance of a Deal. White House Meeting Delayed to Give Talks More Time to Progress. Top Senate leaders said they were within striking distance of an agreement Monday to reopen the federal government and defuse a looming debt crisis just days before the U.S. could run out of money to pay its bills.

• Budget Battle: Streaming Coverage.

• Daniel Yergin: Why OPEC No Longer Calls the Shots. The oil embargo 40 years ago spurred an energy revolution. World production is 50% higher today than in 1973.

Fox News:

• Senate leaders scramble to iron out new budget plan, as framework emerges. The top two Senate leaders scrambled late Monday to iron out the specifics of an emerging budget proposal aimed at ending the partial government shutdown and lifting the debt ceiling -- after a string of prior plans fizzled.

MarketWatch.com:

• Teradata(TDC) shares fall after outlook cut. Shares of Teradata fell 12% to $46.17 on heavy volume after the company said it now expects adjusted full-year earnings of $2.70 to $2.80 a share. Analysts surveyed by FactSet expect earnings of $2.85 a share.

CNBC:

• Nobel prize winner warns of 'bubbly' home prices. One of three American economists who won the 2013 economics Nobel prize on Monday for research into market prices and asset bubbles expressed alarm at the rapid rise in global housing prices. Robert Shiller, who shared the 8 million Swedish crown ($1.25 million) prize with fellow laureates Eugene Fama and Lars Peter Hansen, said the U.S. Federal Reserve's economic stimulus and growing market speculation were creating a "bubbly" property boom.

• Implications for banks as Madoff litigation grinds on. 

• 'So much wrong': Aetna CEO blasts Obamacare tech debacle. Aetna's CEO gave a harshly critical review Monday of the federal government's Obamacare marketplace, saying, "There's so much wrong, you just don't know what's broken until you get a lot more of it fixed." 

Zero Hedge:

• Meanwhile, In Iraq...

• Another JPMorganite Busted For "Bandits' Club" Market Manipulation.

• The "Greatest Rotation": From Capex To Dividends. 

• When Countries Go Broke.

• 22 Reasons To Be Concerned About The U.S. Economy As We Head Into The Holiday Season.

Business Insider:

• Shoppers Stampede Walmart After Glitch Temporarily Lifts Food Stamp Spending Limits.

• HAWKS AND DOVES: Here's What Janet Yellen's New Fed Will Look Like.

Washington Post: 

• NSA collects millions of e-mail address books globally. The National Security Agency is harvesting hundreds of millions of contact lists from personal e-mail and instant messaging accounts around the world, many of them belonging to Americans, according to senior intelligence officials and top secret documents provided by former NSA contractor Edward Snowden. The collection program, which has not been disclosed before, intercepts e-mail address books and “buddy lists” from instant messaging services as they move across global data links.

Reuters:

• U.S. Congress calls for hard line on Iran sanctions. U.S. lawmakers urged President Barack Obama to keep to a hard line on sanctions imposed on Iran on Monday, a day before the resumption of talks on its nuclear program between world powers and Tehran.

• Brazil, worried over debt, to lend less to BNDES, states. Brazil will inject less money next year into the country's development bank BNDES, its leading source of long-term corporate loans, to focus more on infrastructure financing as concerns mount over public debt. The National Treasury has a target of phasing out annual capital injections into BNDES "within a few years," Finance Minister Guido Mantega said on Monday.

China Securities Journal:

• China May Face Greater Inflation Pressure in 2014. China may face greater inflationary pressures next year if global economic recovery accelerates, according to a commentary published on its front page, written by its reporter Gu Xin.

• China 2H Inflation May Face More Upward Pressure. China may face greater upward inflationary pressure in 2H, as compared with 1H, citing Hu Chi, researcher at the State-owned Assets Supervision and Administration Commission's research center.

Evening Recommendations 

• None of note

Night Trading

• Asian equity indices are unch. to +.75% on average.

• Asia Ex-Japan Investment Grade CDS Index 139.0 -1.0 basis point.

• Asia Pacific Sovereign CDS Index 109.5 -.25 basis point. 

• FTSE-100 futures +.56%.

• S&P 500 futures +.09%.

• NASDAQ 100 futures +.18%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (JBHT)/.78

• (KO)/.53

• (JNJ)/1.32

• (SCHW)/.20

• (OMC)/.81

• (DPZ)/.52

• (C)/1.04

• (IBKR)/.33

• (CSX)/.42

• (YHOO)/.33

• (INTC)/.53

• (LLTC)/.45

Economic Releases
8:30 am EST

• Empire Manufacturing for October is estimated to rise to 7.0 versus 6.29 in September.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Fisher speaking, Fed's Williams speaking, Fed's Dudley speaking, weekly retail sales reports, Germany ZEW Index, UK Inflation, (WMT) Investment Community Meeting and the (WWW) Investor Day could also impact trading today.

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

Today's Headlines

Bloomberg:

• Lew Vow Not to Shift on Debt Frustrates Incredulous Republicans. He’s “an implacable negotiator” who is “ideologically committed to protecting every big-government gain,” Senator Jeff Sessions, an Alabama Republican, said in an interview. Administration officials “can all go and play a round of golf, and they know he’s not going to agree to anything.” Lew’s approach to the debt limit has focused on a few basic ideas. He has scrapped, temporarily, the traditional Treasury secretary role of cheering up financial markets and is making it clear he thinks investors should be worried about the possibility the U.S. won’t make all its payments on time. “The calm out there,” he said in a discussion with Bloomberg View’s Al Hunt on Sept. 24, “is a bit greater than it should be.” Senator Ron Johnson, a Wisconsin Republican, said at an Oct. 11 Bloomberg breakfast that the administration should try “to calm the markets, not scare them.” “Responsible leadership wouldn’t be going out there going, ‘There’s going to be catastrophe coming,’” Johnson said, referring to comments by Obama and Lew warning of dire consequences if the U.S. can’t make all its payments. 

• India Inflation Reaching Seven-Month High Adds Rate Pressure. Indian inflation unexpectedly accelerated to a seven-month high in September, adding to the case for a further increase in the benchmark interest rate. The wholesale-price index rose 6.46 percent from a year earlier, compared with a 6.1 percent advance in August, the Commerce Ministry said in New Delhi today. The median of 33 estimates in a Bloomberg News survey was for a 6 percent climb. Governor Raghuram Rajan, who took over at the Reserve Bank of India last month, raised the repurchase rate to 7.5 percent after vowing to tame inflation, which was almost 10 percent in September based on a separate gauge of consumer prices released today. The cost of living is jumping even as economic growth slows, stoked by food prices and weakness in the rupee that makes imports more expensive.

• China-to-India Price Jump Risks Growth as World Outlook Dims. Higher food costs from China to India are raising prices for a third of the world’s people, adding to the challenge of sustaining the global economic recovery as the growth outlook dims. Consumer prices in China rose 3.1 percent last month as food costs advanced the most since May 2012, statistics bureau figures showed today in Beijing, while India’s Commerce Ministry said inflation unexpectedly accelerated to a seven-month high. Both gauges increased more than economists had estimated.

Wall Street Journal:

• Senate Talks Intensify as Obama Sets Meeting. Reid Say He Hopes to Have a Deal by Time of White House Meeting Monday Afternoon.

• Budget Battle: Streaming Coverage.

Fox News:

• Rollback of cuts fuels claims that government inflated impact of partial shutdown. Two weeks into the partial government shutdown, the Obama administration is increasingly easing off some of its most painful cuts -- fueling the perception among critics that the government initially imposed visible, but ultimately unnecessary, cutbacks as a way to pressure Republicans. The Department of the Interior late last week agreed to let states use their own money to reopen some national parks. Defense Secretary Chuck Hagel also determined football and other sports could continue at service academies through October. Following outrage from military groups, the Pentagon contracted with a charity to provide death benefits to the families of fallen soldiers, before President Obama abruptly signed legislation to do just that.  Earlier, the Pentagon also announced most of its 350,000 furloughed civilian military personnel would return to their jobs. And CIA Director John Brennan said he would begin bringing back employees deemed necessary to the agency's core missions.

CNBC:

• DC wants Dow to drop 1,000: Bove. Financial analyst Dick Bove thinks gridlocked politicians are asking for a market sell-off. "What do they think will convince the American public that they as our leaders must act? It is becoming very clear that what they want is panic in the equity markets. They want to see the Dow drop 1,000 points," Bove wrote in a note to Rafferty Capital Markets clients Monday. 

• Thursday debt deadline a 'soft date,' says Bowles. (video) Erskine Bowles, former co-chair of President Barack Obama's debt commission, indicated on CNBC that Thursday's deadline set by the Treasury to increase the debt ceiling may be flexible.

Zero Hedge:

• As Nigel Farage Warned: "In Two Months Of EU Membership, Croatian Exports Fall 11%".

• Companies Beating Earnings Tumbles To Lowest Since Q1 2009. (graph)

• China Blasts Japan's Fiscal Policy Lunacy.

• QE Is "At Best An Unfair And At Worst An Evil Policy". 

• Obama Job Approval Nears All-Time Lows. (graph)

• Puerto Rico's Debt Crisis – Another Domino Keels Over.

Business Insider:

• Syria's Civil War: Will The Jihadists Overreach?

• Google(GOOG) Could Release A New Smart Watch By The End Of This Month.

• New York Times Reveals How The Obamacare Website Ended Up As Such A Catastrophe.

Reuters:

• Franco-German divisions cloud efforts to fix broken banks. The euro zone debated on Monday how to prop up banks likely to be declared unstable next year, but France's blunt criticism of Germany before the meeting laid bare the tensions surrounding the far-reaching financial reform. Bank health checks by the European Central Bank are a critical step in establishing a single banking framework for the euro zone, giving credibility to ECB supervision and paving the way for the bloc to cooperate on saving bust banks.

Telegraph:

• Time to take bets on Frexit and the French franc? We have a minor earthquake in France. A party committed to withdrawal from the euro, the restoration of French franc, and the complete destruction of monetary union has just defeated the establishment in the Brignoles run-off election. It is threatening Frexit as well, which rather alters the political chemistry of Britain's EU referendum.

Pais:

• Italy, France, Germany Push For Easier Bank Tests. Countries pushing to soften the criteria of ECB bank stress tests, citing people familiar with the matter. Germany and France are pressurizing ECB and other institutions so that the criteria of stress tests least damaging as possible for interests of their banks. Italy wants to avoid shareholders and junior debtholders being hit if a bank needs to be recapitalized with public funds, citing a minister in euro group.

Echoing fears that European policymakers remain in a state of cognitive dissonance – recognizing the need for root-and-branch overhaul of peripheral banks, but backtracking on joint liability plans – Christopher Flowers, the legendary FIG investor who now runs the £2.3 billion ($3.5 billion) private equity group JC Flowers, sounded the alarm over the negative sovereign-bank feedback loop. In a shot across the bows of market bulls, who cite the return of capital flows to weaker eurozone states, Flowers issued a stark warning: "There is a scenario where we have a Lehman-type event: we wake up some Thursday and a big country is in trouble. "And the ECB will have to decide to support banks x, y, z. And then the ECB will, in fact, decide to own bank x, y, z.


While we want you to share, we ask you use the functions on-site rather than copy/paste. See T's & C's for details. http://www.euromoney.com/Article/3211790/CurrentIssue/88924/Restructuring-Flowers-slams-Europe-over-inaction.html?copyrightInfo=true

Bear Radar

Style Underperformer:

• Large-Cap Value -.30%

Sector Underperformers:

• 1) Homebuilders -1.51% 2) Utilities -1.21% 3) HMOs -.81%

Stocks Falling on Unusual Volume:

• EXPE, WHR, ACOR, ETH, SPN, FICO, WX, ARII, TXI, PMTC, ALNY, ONTX, PSMT, TEX, APO, USM, MAIN, ASML, STML, MRK, VIPS, MHK, LMCA, RYAAY, PETM and SGI

Stocks With Unusual Put Option Activity:

• 1) JPM 2) PETM 3) XLV 4) WHR 5) WFM
  

Stocks With Most Negative News Mentions:

• 1) FIC 2) EXPE 3) RL 4) JPM 5) RCL
  

Charts:

• ETFs Falling on Unusual Volume

• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer:

• Small-Cap Value -.50%

Sector Outperformers:

• 1) Tobacco +.69% 2) Gold & Silver +.47% 3) Disk Drives +.06%
  

Stocks Rising on Unusual Volume:

• KLIC, LINTA and NFLX

Stocks With Unusual Call Option Activity:

• 1) STSI 2) EXPE 3) ATRS 4) CVS 5) BK

Stocks With Most Positive News Mentions:

• 1) BA 2) NFLX 3) SMG 4) PENN 5) LMT
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume

Monday Watch

Weekend Headlines 
Bloomberg:

• China Calls for De-Americanized World. (video) 

• China Exports Unexpectedly Drop as Food Prices Stoke Inflation. China’s exports unexpectedly fell in September and inflation jumped on food prices, signaling constraints on the nation’s recovery as Premier Li Keqiang seeks to sustain growth without adding monetary stimulus. Overseas shipments dropped 0.3 percent from a year earlier, customs data showed on Oct. 12, trailing all 46 estimates in a Bloomberg News survey, while imports rose a more-than-forecast 7.4 percent. Consumer prices rose 3.1 percent as food costs advanced the most since May 2012, statistics bureau figures showed today in Beijing.

• Asian Stocks Decline on U.S. Stalemate as Yen Rebounds. Asian stocks and U.S. index futures fell, while the yen snapped a four-day slump as American lawmakers struggled to reach an accord on raising the nation’s debt limit and restoring government operations. Metals dropped after Chinese exports unexpectedly decreased. The MSCI Asia Pacific excluding Japan Index slid 0.3 percent by 9:54 a.m. in Singapore, with markets in Japan and Hong Kong closed for holidays.

• Rebar Gains for Third Day. Steel reinforcement-bar futures in Shanghai rose for a third day on signs demand for the building material may be growing. Rebar for delivery in January on the Shanghai Futures Exchange climbed as much as 0.4 percent to 3,615 yuan ($591) a metric ton and traded 3,610 yuan a metric ton at 10:18 a.m. Beijing time. The most-active contract gained 0.4 percent last week, the most since the five days through Aug. 16.

• Copper Supply Glut Seen Tripling as Prices Sink 10%: Commodities. The worldwide glut of copper supply is poised to almost triple in 2014, driving prices to the lowest in at least three years at a time when the International Monetary Fund says economic growth will be weaker than forecast. The surplus will reach a 13-year high of 272,000 metric tons, according to data from Barclays Plc and the International Copper Study Group in Lisbon. Codelco and Freeport-McMoRan Copper & Gold Inc., the biggest producers, are among those scheduled to add supply next year. The metal will drop as low as $6,450 a ton in 2014, or 10 percent less than last week's close, the median of 22 analyst estimates compiled by Bloomberg shows.

• ECB Bank Check to Be Different From Previous Tests, Coeure Says. The European Central Bank’s upcoming check of European bank balance sheets will cast “three pairs of eyes” over lenders’ books to ensure credibility, Executive Board member Benoit Coeure said. “The way we will do it next year will be very different from the way that the previous two stress tests were done,” Coeure said at an event in Washington yesterday. “Any number provided by the banks will first be checked by the national supervisor, then there will be a second check at the European level, in Frankfurt. And then there will be a third check by independent auditors.”

Wall Street Journal:

• Senate Democrats Press New Front in Budget Battle. Republicans Oppose Move to Reopen Sequester Cuts. Senate leaders attempting to avoid a U.S. debt default remained at loggerheads Sunday and escalated the standoff by reopening the contentious issue of automatic spending cuts, damping hopes that some of Congress's most canny negotiators would break the impasse. As the search for a way to end the partial federal shutdown and avoid a debt crisis shifted to the Senate, Democrats made plain that one of their top priorities was to diminish the next round of across-the-board spending cuts, known as the sequester, due to take effect early next year.

• Budget Battle: Streaming Coverage.

• Shutdown Likely to Prolong Fed's Stimulus. Economists Push Back Expectations for Reduction in Bond Buying. 

• Netflix(NFLX) Pursues Cable-TV Deals. Online Video Service Would Be Available on Set-Top Boxes.

• Google's(GOOG) New Ad Star: You. Search Giant Soon Will Have Names, Photos Pitching Products Across Its Sites.

• Crovitz: ObamaCare's Serious Complications. For the IRS alone, implementing the law involves 47 different statutory provisions. The functional failures of the Affordable Care Act websites are well-documented, but the fundamental flaw is the law's mind-numbing complexity. The officials who planned ObamaCare blame their Web engineers, but they're passing the buck. ObamaCare is a hugely complicated approach to addressing problems in health care that have simpler solutions.

Fox News:

• Fiscal deals now focus on sequester, amid little Capitol Hill optimism about quick fix. The gray clouds looming over Washington this holiday weekend appear to be thickening on Capitol Hill, as lawmakers express little optimism about reaching a deal before Monday night to fix the country’s fiscal crisis. The Senate will return to the Hill on Columbus Day after participating in essentially a pro forma session Sunday in which they made floor speeches but took no votes, with House members expected to stay home until Tuesday, the conclusion of a weekend of failed negotiations. “We will see our way through this, but the last 24 hours have not been good,” Tennessee Sen. Bob Corker told “Fox News Sunday.” “It’s not clear how this will end.”

CNBC:

• Senate Leaders talk; GOP blames Obama for gridlock. Senate Republicans on Sunday kept up the drumbeat of blame against President Obama for what they say is his failure to negotiate with them on the fiscal crisis that will come to a head on Thursday, when the government will run out of money to pay its bills. As the Republicans pointed fingers at the White House, Senators Harry Reid and Mitch McConnell met again on Sunday in an effort to come up with some sort of agreement — even one that will kick the most pressing problems down the road for a few weeks or months.

• Why this could be an awful week for earnings. (video) A huge week for earning is coming up, with companies as diverse as Coca-Cola, Bank of America, Google and GE revealing how much they earned in the third quarter. And some traders worry that the results won't be good.

Zero Hedge:

• "No Deal" - Boehner Says Obama Rejects Proposals, Not Negotiating; Talks At An Impasse.

• Senate Votes Down Clean 2014 Debt Extension Along Party Lines As Democrats Reject Collins' Plan.

• GOP Warns "Definitely A Chance We're Going To Go Past The Deadline". "It's very clear to us he does not now, and never had, any intentions of negotiating," and warned, there was "definitely a chance that we're going to go past the deadline."

• The Long Game Of Hiking The Debt Ceiling.

• CME Hikes E-Mini And Big S&P, Nasdaq And Dow Jones Margins.

• Dot Com Two Dot Ouch: 68% Of All 2013 IPO-ing Companies Lose Money.

• Emerging Market Macro Misery Back At Post-Crisis Highs.

• The Ultimate "What Would Janet Yellen Do?" Cheatsheet.

• The Life And Death Of A Massive Debt Bubble In Seven Charts.

• Marc Faber Blasts "A Corrupt System That Rewards Stupidity".

• Have We Reached Peak Entitlements? (graph)

• Patriot Act Author Calls For Clapper's Prosecution And Rein In NSA Abuses.

• Foodstamp Nation In Turmoil: EBT System Goes Dark, "Glitch" Blamed.

• Mark Spitznagel Warns "Interventionist Policies Cause Of, Not Cure For, Busts".

• Protesting Veterans Tear Down DC Barricades, Chant "Shut Down The White House".

ValueWalk:

• Bruce Greenwald on Macro, Hedging, Gold, Growth Stocks [VIDEO]. 

Business Insider:

• Here's Who We Owe That $17 Trillion Of Government Debt To.

• The Towns Around Fukushima Power Plant Look Like A Post-Apocalyptic Nightmare [PHOTOS] 

• Cadillac's Electric Answer To Tesla's Model S Is About To Hit The Market.

• New Chinese Economic Data Suggest Global Demand Is Crumbling. China's export growth fizzled in September to post a surprise fall as sales to Southeast Asia tumbled, data showed, a disappointing break to a recent run of indicators that had signaled its economy gaining strength. China's exports dropped 0.3 percent in September from a year earlier, the Customs Administration said on Saturday, sharply confounding market expectations for a rise of 6 percent, and marking the worst performance in three months.

• The President Of Venezuela Is Starting To Get Scary.

• Fund Managers Still See December As Most Likely Timing For Fed Tapering Despite Crisis In Washington.

• Europe Prepares To Come Clean On Hidden Bank Losses.

• Al-Qaeda Car Bombs And Suicide Attacks Are Tearing Iraq Apart.

Wall Street All-Stars:

• Indicator Update: An Endgame for the Debt Ceiling Debate.

McClatchy: 

• More Syria rebel groups leave U.S.-backed command amid worry ‘moderates’ will be shut out.

Financial Times:

• Bank exposure to EU states’ bonds on rise. Europe’s financial institutions are more exposed to their domestic government bonds than at any time since the eurozone crisis started, reigniting concerns that the fates of sovereign states and their banks are too closely intertwined. Despite official pledges by eurozone authorities to break the “sovereign-bank nexus”, government bonds accounted for more than a 10th of Italian banks’ total assets at the end of August, the last month for which data are available. That is up from 6.8 per cent at the beginning of 2012, according to data from the European Central Bank.

• Hedge funds shun new European framework Hedge funds are shunning a new European framework aimed at improving protection for investors in alternative funds, due to the associated cost and compliance hurdles. Just 11 fund managers have signed up to the regime in the UK, which accounts for 74 per cent of European hedge fund assets under management, since it went live in July. A UK-based investment consultant, who did not want to be named, said she would have expected “thousands” of alternative fund managers to have registered by now.

• JPMorgan’s(JPM) legal burden sends shivers through the industry. “We weren’t completely stupid,” Jamie Dimon, chief executive of JPMorgan Chase, said on Friday, explaining that he did not buy Bear Stearns and Washington Mutual without considering legal liabilities that might come with the deals.

FAZ:

• ECB to Demand Higher Capital Levels in Balance Sheet Checks. Europe's most important banks need extra buffer against another potential crisis, ECB board member Yves Mersch said in an interview. Banks will probably require core capital ratio of at least 7% in relation to RWAs, according to FAZ calculations based on Mersch's comments.

21st Century Business Herald:

• China Banking Regulator Mulls Capping Local Govt Debt. China's banking regulator plans to set an upper debt limit for local govts. China's auditing agency will submit a report on govt debt to the cabinet in mid-Oct. after a 3-mo. nationwide audit.

China Securities Journl:

• China to Start New Study of Property Market. China's housing ministry will study property markets in cities such as Chengdu in the near term, signaling acceleration of establishment of system for long-term property controls, citing people familiar with the matter. The long-term system may include property cos. financing policy, the report said.

Night Trading

• Asian indices are -.75% to +.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 140.0 -2.0 basis points.

• Asia Pacific Sovereign CDS Index 109.75 -1.0 basis point.

• FTSE-100 futures -.29%.

• S&P 500 futures -.69%.

• NASDAQ 100 futures -.48%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (BRO)/.40

• (PKG)/.89

Economic Releases

• None of note

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Bernanke speaking, Eurozone Industrial Production and Japan Industrial Production could also impact trading today.

BOTTOM LINE: Asian indices are mostly lower, weighed down by commodity and technology 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 week.