Bloomberg:
- European Stocks Rise for Eighth Day as Philips, Akzo Gain. European stocks gained for an eighth day as companies from Royal Philips NV to Akzo Nobel AG reported profit that beat estimates and investors speculated the Federal Reserve may maintain stimulus measures into next year.
Philips, the world’s biggest lighting manufacturer, and
Akzo Nobel, the Dutch maker of Dulux paint, jumped more than 5
percent. Actelion Ltd. rallied to a six-year high as its lung
drug Opsumit won U.S. approval. SAP AG added 4.8 percent after
the maker of business-management software posted increased
third-quarter earnings and reiterated its full-year forecast. The Stoxx Europe 600 Index advanced 0.3 percent to 319.54
at the close of trading, the highest level since June 2008.
- Nickel glut extends to fourth year on China supply. The global glut of nickel will extend into a fourth year in 2014 as new
technology lowers costs for Chinese furnaces producing record amounts of
a lower-grade substitute that helped drive prices into a bear market.
- Coffee Tumbles to Lowest Since March 2009 on Expanding Supplies. Coffee fell to the lowest in more
than four years as dry weather helps improve growing conditions in Brazil, the world’s largest producer and exporter. Most of Brazil’s growing areas will get sun this week, as
alternating periods of rain and dry weather allow farmers to
work in fields and spur crops that will be collected next season
to flower multiple times, Marcio Custodio, a forecasting
director at Sao Paulo-based Somar Meteorologia, said today in a
telephone interview. The beneficial conditions will boost
output, he said.
- WTI Crude Falls to $100; First Time Since July on Supply. West Texas Intermediate fell below
$100 a barrel for the first time since July amid forecasts that
crude stockpiles increased to a three-month high in the U.S.,
the world’s biggest oil consumer. Futures declined as much as 1.2 percent,
after losing 1.2 percent last week. U.S. crude inventories probably
climbed by 3 million barrels to 373.5 million in the week ended Oct. 11,
a Bloomberg News survey before a government report today showed. That
would be the highest level since July. A Nigerian rebel
group said it plans to escalate a violent campaign of disrupting
oil production by targeting offshore fields.
Wall Street Journal:
- Margin Debt Hits New High. Investors took a record level of debt out against their portfolios
last month, and borrowing made the biggest monthly jump since January. Last month, investors borrowed $401.2 billion against their
portfolios, exceeding April’s record of $384.4 billion, according to the
New York Stock Exchange. The Big Board’s member brokerage firms report
the level of borrowing, known as margin debt, held against client
accounts monthly. Debt rose 4.8% in September from the previous month, the biggest
single-month jump since January. That was larger than the corresponding
rise in the S&P 500, which gained 3% despite tensions in Washington
that led to the first partial U.S. government shutdown in 17 years this
month.
CNBC:
- More youth not in school, without jobs. Almost 6 million young people are neither in school nor working, according to a study released Monday. That's almost 15 percent of those aged 16 to 24 who have neither desk
nor job, according to The Opportunity Nation coalition, which wrote the
report.
Zero Hedge:
Business Insider:
- DRUCKENMILLER: 'I'm A 60-Year-Old Washed Up Money Manager'. It has become harder for me, because the importance of my skills is receding. Part of my advantage, is that my strength is economic forecasting, but that only works in free markets,
when markets are smarter than people....It's not predicting anything
the way it used to and that really makes me reconsider my ability to
generate superior returns. If the most important price in the most
important economy in the world is being rigged, and everything else is
priced off it, what am I supposed to read into other price movements?
New York Post:
Telegraph:
Style Underperformer:
Sector Underperformers:
- 1) Homebuilders -1.90% 2) Oil Tankers -1.38% 3) Biotech -1.15%
Stocks Falling on Unusual Volume:
- TTS, KALU, PETS, NOAH, MZOR, CGIX, OPK, CCI, RBS, YRCW, BGS, QCOR, GT, CHL, DQ, CLDX, CSTE, CECE, GIB, CZR, GCI, RLGY, RICK, FHN and TTS
Stocks With Unusual Put Option Activity:
- 1) TXN 2) GERN 3) APOL 4) BHI 5) COH
Stocks With Most Negative News Mentions:
- 1) JPM 2) JCP 3) FB 4) CL 5) BAX
Charts:
Style Outperformer:
Sector Outperformers:
- 1) Gold & Silver +1.70% 2) Networking +.68% 3) Steel +.61%
Stocks Rising on Unusual Volume:
- XTXI, XTEX, HAS, ATHN, SAP, CHKP, VISN, FSLR, UPL, SCTY, VFC, AOS, CE, PHG, WBMD, BCC, VHC, DK, XOOM and CLNE
Stocks With Unusual Call Option Activity:
- 1) HAS 2) TIVO 3) GTAT 4) RLGY 5) COH
Stocks With Most Positive News Mentions:
- 1) VFC 2) SILC 3) NFLX 4) PCLN 5) SCTY
Charts:
Weekend Headlines
Bloomberg:
- Japan’s Export Growth Slows in Challenge for Abe: Economy.
Japan’s export growth slowed in September and the nation extended a
record run of trade deficits, underscoring the challenge for Prime
Minister Shinzo Abe in sustaining momentum in the world’s third-biggest
economy. Shipments increased 11.5 percent from a year earlier, the
weakest pace in three months, a finance ministry report showed
in Tokyo. That compared with a 14.6 percent gain in August and the 15.6 percent median forecast of 24 economists surveyed by Bloomberg News.
- Asia Stocks Advance on Outlook for Federal Stumulus.
Asian stocks rose, with the regional benchmark index extending its
advance from a five-month high, amid speculation the Federal Reserve
will delay stimulus cuts. Canon Inc., the world’s biggest camera maker,
gained 1.1 percent as a weaker yen boosted the earnings outlook for
Japanese exporters. Naver Corp. advanced 5 percent to a record in Seoul
after KB Investment & Securities Co. raised its price target for the
Internet company. Qantas Airways Ltd. slipped 4.6 percent, extending
losses for a second day, after Australia’s largest carrier said last
week it expects the lowest yields in
more than a decade for passenger flights. The MSCI Asia Pacific Index added 0.2 percent to 143.76 as
of 12:10 p.m. in Tokyo, with about five shares rising for every
three that fell.
- Rubber Declines to One-Week Low as Stockpiles in Shanghai Swell.
Rubber fell for a fourth day to the lowest level in almost a week after
data showed stockpiles in Shanghai swelled to the highest level since
January 2010. The contract for March delivery lost as much as 1.6
percent to 263.1 yen a kilogram ($2,685 a metric ton) on the Tokyo
Commodity Exchange, the lowest level since Oct. 15. Futures
traded at 265.2 yen at 10:27 a.m., expanding losses for a most-active
contract to 12 percent this year.
- Rebar Extends Weekly Drop as China Fixed Asset Investment Slows.
Steel reinforcement-bar futures in Shanghai extended a weekly drop as
China’s fixed asset investment dipped and industrial production slowed. Rebar for delivery in January on the Shanghai Futures
Exchange fell as much as 0.5 percent to 3,551 yuan ($582) a
metric ton and was at 3,559 yuan at 10:44 a.m. local time. The
most-active contract lost 0.9 percent last week, the first such
drop in three weeks.
- Draghi Says Bank-Aid Rules Must Be Flexible on Forced Losses. European
Central Bank President Mario Draghi said banks should be able to access
public aid without wiping out junior bondholders if regulators decide a
lender needs more capital and isn’t on the brink of failure.
Draghi urged the European Union to make clear when it will
allow exceptions to state-aid rules that require private-sector
creditors to take losses before government backstops can step
in.
- CN Train Carrying Crude Derails in Alberta, Sparking Fire. A
Canadian National Railway Co. (CNR) train carrying crude oil and
liquefied petroleum gas derailed west of Edmonton early today, causing
an explosion and fire. One car containing LPG, or propane, exploded and set two
other cars leaking the flammable substance on fire, said Carson
Mills, a spokesman for Parkland County, in a telephone
interview. Thirteen cars derailed, he said.
Wall Street Journal:
- Budget Discord Simmers Among Democrats. Some Liberal Groups, Lawmakers Worry About Cuts to Social Security, Other Entitlements. Cracks are showing in the Democratic coalition as the next round of
budget talks gets under way, hurting the chances for progress toward a
broad deal that changes the tax code and significantly narrows future
deficits.
- Sending a Bad Message to Big Banks. The feds' hypocrisy about J.P. Morgan's takeover of Bear Stearns will make other banks wary in the next crisis. The FDIC chairman said "little thought was given" to resolving the
big-bank crisis, and now equally little thought seems to have been given
to the pursuit of J.P. Morgan Chase over Bear Stearns. Once the
government proves itself to be an unreliable "partner" in resolving
failed institutions, it will find fewer banks willing to step in next
time there is systemic risk to the banking system.
Fox News:
CNBC:
- Some furloughed federal workers may double dip.
Some fortunate federal employees will likely get paid twice for not
working this month. Several states are expected to allow federal workers
who collected
unemployment insurance during the government shutdown to keep both those
benefits and the back pay they're set to receive, according to the
Labor Department.
Business Insider:
USA Today:
- U.S. quietly releasing $1.6B in Pakistan assistance. The U.S. has quietly decided to release more than $1.6 billion in
military and economic aid to Pakistan that was suspended when relations
between the two countries disintegrated over the covert raid that killed
Osama bin Laden and deadly U.S. airstrikes against Pakistani soldiers.
Financial Times:
- US housing regulators seek over $6B from Bank of America. U.S.
housing regulators are looking to fine Bank of America more than $6
billion for its role in misleading mortgage agencies during the housing
boom, compared with the $4 billion to be paid by JPMorgan Chase & Co
, the Financial Times reported on its
website, citing people familiar with the matter.
Telegraph:
Focus:
- Spain, Italy, Greece Don't Spend EU Money Well. Countries,
especially Spain, aren't using money according to plan, citing a study
by the EU Commission. Reasons are mistakes in tender procedures and
applying the wrong criteria for determining who is eligible for aid.
China Securities Journal:
- China Needs Market-Oriented Property Industry. China needs to
further promote market reform of the real estate market to solve
fundamental problems, according to a commentary by Xu Nuojin. China's
housing prices continue to rise after the country announced more than 40
measures to control the prices since 2003, Xu said. China should cancel
home buying restrictions for medium- and high-income earners and impose
taxes to cut demand, according to Xu. China should levy a property
vacancy tax for idle properties including unsold properties built by
developers, according to Xu.
Weekend Recommendations
Barron's:
- Bullish commentary on (OUTR), (ACN), (AET), (RTN), (WU), (MOS), (VLO), (MPC), (HFC), (WNR) and (T).
- Bearish commentary on (QCOR).
Night Trading
- Asian indices are -.25% to +.75% on average.
- Asia Ex-Japan Investment Grade CDS Index 132.50 -.25 basis point.
- Asia Pacific Sovereign CDS Index 103.0 +1.75 basis points.
- NASDAQ 100 futures +.18%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
10:00 am EST
- Existing Home Sales for September are estimated to fall to 5.3M versus 5.48M in August.
Upcoming Splits
Other Potential Market Movers
- The Fed's Evans speaking and German inflation data could also impact trading today.
BOTTOM LINE: Asian indices are mostly higher, boosted by commodity 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 75% net long heading into the week.
Wall St. Week Ahead by Reuters.
Stocks to Watch Monday by MarketWatch.
Weekly Economic Calendar by Briefing.com.
BOTTOM LINE: I expect US stocks to finish the week mixed as technical selling, profit-taking and earnings concerns offset
short-covering, central bank hopes and investor performance angst. My
intermediate-term trading indicators are giving neutral signals and the
Portfolio is 75% net long heading into the week.
