Bloomberg:
- Islamic State Seen Capturing Kobani Within Days. Islamic State militants may capture Kobani within days if the U.S.-led coalition doesn’t step up airstrikes to help forces defending the besieged Kurdish stronghold in Syria, a Kurdish lawmaker said. The al-Qaeda breakaway group has seized water wells on the outskirts of Kobani, Faysal Sariyildiz, a lawmaker in the Turkish parliament, said in an interview at the border with Syria yesterday. Even if the wells were under Kurdish control, the lack of diesel due to the siege renders them useless, he said.
- Iraq Anbar Police Chief Killed Amid Clashes With Islamic State. A roadside bomb killed the police chief of Iraq’s western Anbar province during clashes with Islamic State fighters in the city of Ramadi as security forces struggle to expel the militant group from the province. A guard and photographer were also killed in the attack against Ahmed al-Dulaimi, the governor’s office said in a statement yesterday. The Interior Ministry named Sabah Mohammed as the acting police chief in the province, while Anbar’s council nominated Kadhim al-Fahdawi.
- IMFC Sees Growing Risks in Weaker-Than Expected Recover. Risks to an “uneven and weaker-than-expected” global economic recovery have increased, the International Monetary Fund’s steering committee said. At the end of meetings of finance ministers in Washington, the International Monetary and Financial Committee also said in a statement today that “exchange rates should be allowed to respond to changing fundamentals.” The IMFC said it is “deeply concerned about the human and socioeconomic impact of Ebola.” The IMFC said it is “deeply disappointed with the continued delay” in enacting a 2010 pact by all IMF member countries that would increase emerging markets’ shares, or quotas, in the fund and boost its permanent lending capacity. The committee urged the U.S., the largest IMF shareholder, to “ratify these reforms at the earliest opportunity.” The U.S. Congress has stalled implementation of the changes.
- China’s Li Says Economic Growth Quality Important as Pace. The “quality” of economic expansion, including job creation and fighting pollution, is as important as its speed amid uncertainty over whether China will reach its growth target this year, Premier Li Keqiang said. In a speech to businessmen and politicians in the German port of Hamburg today, Li repeated that China still expects economic growth of about 7.5 percent this year. Though China may exceed or miss that target, the nation doesn’t “face a hard landing as some say,” he said.
- Agile Property Shares Tumble After Chairman Under Watch in China. Agile Property Holdings Ltd. (3383) tumbled as much as 31 percent in Hong Kong trading after its billionaire founder and Chairman Chen Zhuolin was placed under the control of Chinese prosecutors. The shares plunged to HK$3.30 after resuming trading following a suspension since Oct. 3 and traded 24 percent lower at HK$3.63 as of 9:31 a.m. local time. The stock was downgraded to sell from hold at DBS Vickers Hong Kong Ltd.
- Draghi Says Growing ECB Balance Sheet Is Last Stimulus Tool Left. President Mario Draghi said expanding the European Central Bank’s balance sheet is the last monetary tool left to revive inflation although there is no target for how much it might be increased. “It’s very difficult for me to give you an exact figure at this point in time,” Draghi told reporters in Washington today during the annual meeting of the International Monetary Fund. “I gave you a kind of ballpark figure, say about the size the balance sheet had at the start of 2012.”
- Draghi Weidmann Fight Intensifies as ECB Debates Action. Mario Draghi and Jens Weidmann are clashing anew over how much more stimulus the ailing euro-area economy needs from the European Central Bank. As Europe’s woes again proved the chief concern at weekend meetings of the International Monetary Fund in Washington, President Draghi repeated he’s ready to expand the ECB’s balance sheet by as much as 1 trillion euros ($1.3 trillion) to beat back the threat of deflation. Bundesbank head Weidmann responded by saying that a target value isn’t set in stone.
- Europe Forsaken in ETFs as Record Money Pulled on Economy. Investors have had enough of Europe. Amid a global selloff that has sent the Standard & Poor’s 500 Index down 5.2 percent in three weeks, losses have been almost twice as big in the Euro Stoxx 50 Index, where last week’s 4.5 percent retreat was the largest since 2012. A record $1 billion was withdrawn from an exchange-traded fund tracking Europe in the period as Mario Draghi, the central-bank president, warned of signs the recovery is losing momentum.
- Chinese Shares in Hong Kong Fall to Three-Month Low on Economy. Chinese stocks in Hong Kong fell, sending the benchmark index to a three-month low, on concern slowing global economic growth will reduce demand for materials and dampen consumer spending. PetroChina Co., the biggest oil producer, slid 2.9 percent in Hong Kong after Brent futures extended their slump to the lowest in almost four years. Agile Property Holdings Ltd. dropped the most on record after its chairman was placed under the control of Chinese prosecutors. Inner Mongolia Yili Industrial Group Co. and Kweichow Moutai Co. lost at least 2.8 percent in mainland trading. Data showing Chinese exports rising more than estimated in September failed to boost stocks, while in Hong Kong, police removed barricades erected by pro-democracy demonstrators in the city’s business district. The Hang Seng China Enterprises Index (HSCEI) fell 1.2 percent to 10,183.18 as of 10:23 a.m. local time, poised for the lowest close since June 25. The Shanghai Composite Index (SHCOMP) slid 1.1 percent to 2,348.36.
- Asian Stocks Drop With S&P 500 Futures as Yen, Gold Gain. Asian stocks fell with U.S. equity-index futures (DJA), extending a rout that wiped $1.54 trillion from global shares last week, and sovereign bonds rose amid concern that pledges to keep record-low interest rates won’t be enough to offset a global economic slowdown. The yen climbed with gold. The MSCI Asia Pacific excluding Japan Index fell 0.8 percent by 10:15 a.m. in Hong Kong, heading for its lowest close since March as information-technology companies followed their U.S. peers lower.
- Gold Advances to Four-Week High on Haven Demand as Silver Rises. Gold climbed to the highest level in almost four weeks as concern that global growth is slowing stoked bets the U.S. Federal Reserve may push back interest-rate increases, boosting demand for a store of wealth. Gold for immediate delivery advanced as much as 1 percent to $1,235.01 an ounce, the highest price since Sept. 17, and was at $1,233.98 at 10:31 a.m. in Singapore, according to Bloomberg generic pricing. Silver, platinum and palladium all increased at least 0.8 percent.
- Top Investors See More Pain as 10% Losses Spread; S&P 500 'Painting a False Picture'. For most American stocks, the correction has arrived. While gauges such as the Standard & Poor’s 500 Index cling to gains for the year, declines that exceed 10 percent are spreading in the broader market. In the Russell 3000 Index, for example, 79 percent of companies are down that much from their highs, according to data compiled by Bloomberg. That’s a bad sign to Doug Ramsey, the chief investment officer of Leuthold Group LLC who correctly predicted in July 2013 that the U.S. bull market had months more to go. He said that when losses multiply in stocks away from benchmark indexes, it usually means the bigger companies are next. “We’re not expecting a bear market, but we are expecting a significant additional correction,” Ramsey, who helps oversee $1.7 billion at Minneapolis-based Leuthold, said by phone. “We’re seeing very classic late-cycle action where the Dow and S&P 500 are painting a very false picture of what’s going on underneath.”
- U.S. and U.K. Plan Banking ‘War Game’ to Test Crisis Defenses. Regulators in the U.S. and U.K. will carry out their first so-called war game to simulate the failure of a major cross-border bank as they test their defenses against the type of crisis that crippled the financial system in 2008. The exercise, involving Federal Reserve Chair Janet Yellen and Bank of England Governor Mark Carney, will take place on Oct. 13 in Washington and is aimed at testing the global framework on bank resolution to ensure that no lender is too big to fail, according to the U.K. finance ministry. U.S. Treasury Secretary Jack Lew, Deputy Secretary Sarah Bloom Raskin and British Chancellor of the Exchequer George Osborne will also take part.
- Goldman Sachs's Broderick Sees Liquidity Risk in Market. Goldman Sachs Group Inc. Chief Risk Officer Craig Broderick said markets will encounter a shock that would expose liquidity and other risks that aren't apparent today. “When you think about the market in its current form, it does feel very benign,” Broderick said today at an event sponsored by the Institute of International Finance in Washington. “It does feel like investors across lots of different classes, not just the shadow banks, do not actually understand that in fact these crises do periodically occur, and when they do, they’ve potentially significantly underpriced risk.” The ability of the biggest banks to serve as market makers in derivative and off-the-run bond markets has been hindered by new capital rules, Broderick said. While market liquidity appears adequate because non-banks are stepping in, those new entrants may not remain involved when volatility picks up, he said. “There’s no doubt in my mind that some idiosyncratic event will occur, and that will result in a shock that will be very surprising to a lot of market participants,” Broderick said.
- Tarullo Says Too Soon to Declare Too-Big-to-Fail Is Over. Federal Reserve Governor Daniel Tarullo rejected the notion that regulators have completed their work to ensure that no financial firm is too essential to be allowed to collapse. “I don’t know that I personally at least would declare too-big-to-fail ended,” Tarullo said at a conference held by the Institute of International Finance in Washington today. “In fact, I know I would not.”
- Global Signs of Slowdown Ripple Across Markets, Vex Policy Makers. Governments, Central Bankers Have Fewer Tools Left to Revive Economies After Years of Sluggish Growth. Gathering signs of a slowdown across many parts of the world are roiling financial markets and confounding policy makers, who after years of battling anemic economic growth have limited tools left to jump-start a recovery. Slumping exports in Germany are adding fuel to worries about a third recession in the eurozone in six years. China is slowing in the wake of its credit boom, weighing on countries throughout the region. Japan’s...
- Leaving a U.S. Ally Outgunned by ISIS. A Kurdish official has written to Defense Secretary Hagel pleading for the U.S. to honor its promises of military aid.
Zero Hedge:
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New York Times:
Telegraph: - Officials Admit a ‘Defeat’ by Ebola in Sierra Leone. Acknowledging a major “defeat” in the fight against Ebola, international health officials battling the epidemic in Sierra Leone approved plans on Friday to help families tend to patients at home, recognizing that they are overwhelmed and have little chance of getting enough treatment beds in place quickly to meet the surging need.
- Leaning Forward, MSNBC Loses Ground to Rival CNN. Rachel Maddow, the biggest star on the MSNBC cable network, just posted her lowest quarterly ratings results ever. “Morning Joe,” MSNBC’s signature morning program, scored its second-lowest quarterly ratings, reaching an average of just 87,000 viewers in the key news demographic group. And “Ronan Farrow Daily,” the network’s heavily promoted new afternoon show, which stars a 26-year-old Rhodes Scholar with a high-profile Hollywood lineage, has been largely a dud.
- China sees no need for big stimulus for property, economy. China is watching its property market closely but sees no need for any big stimulus for the sector or the rest of the economy, its vice minister of finance said on Friday. Zhu Guangyao told a small group of reporters on the sidelines of the World Bank/IMF meetings in Washington that the government considered that the current economic situation in China, including the real-estate market, was "still stable." While there had been some decline in property prices, this was not seen as a problem, because previously they had been too high and market forces should be allowed to prevail, Zhu said. He said the government had tried in the past to control volatility in the sector, "but not in a very effective way." "We watch closely but let the market play the role. We have enough macro-economic tools, but are very cautious about taking any big stimulate programme this time," Zhu said.
- Exclusive - U.S. regulators press banks for more on auto loan exposure to assess risks. U.S. regulators are asking banks for more detail on their autos financing exposure, as rapid growth in the lending has prompted officials to seek to better assess the risks, according to a person familiar with the matter. Balances remaining on auto loans have risen by about a third since April 2011, reaching an all-time high of $924.2 billion (575 billion pounds) in August, according to credit reporting bureau Equifax. About a fifth of the loans are subprime.
- EXCLUSIVE-Privately, Saudis tell oil market: get used to lower prices. Saudi Arabia is quietly telling oil market participants that Riyadh is comfortable with markedly lower oil prices for an extended period, a sharp shift in policy that may be aimed at slowing the expansion of rival producers including those in the U.S. shale patch.
- How an unstable eurozone could topple the world economy. Stalling growth is hitting hopes of wider global economic recovery. The recognition is there, but the political will is lacking.
- Madrid Hospital Has 16 Ebola-Observation Patients. Hospital La Paz-Carlos III hospital admitted 3 more people today, citing govt's special comte for Ebola.
- EU Asked Italy to Revise Budget to Avoid Rejection. European Commission asked Italian, French govts to revise upcoming budgets to "avoid rejection," citing European sources during IMF meeting in Washington. Italy Fin Min Padoan quoted as saying Italy isn't negotiating with EU on budget.
- Euro Devaluation Won't Solve EU's Problems. Race by the U.S. and EU to weaken their currencies won't solve problems, IW head Michael Huether says. The situation is close to "currency war" that won't create any winners, Huether said. Japan tried the same with Yen devaluation. Euro's slide to continue vs dollar, as ECB's announcement to purchase high-risk assets from banks will cause money to flow out of EU and into U.S.
- Asian indices are -1.75% to -.75% on average.
- Asia Ex-Japan Investment Grade CDS Index 119.0 +2.5 basis points.
- Asia Pacific Sovereign CDS Index 71.25 +2.0 basis points.
- FTSE-100 futures -1.14%.
- S&P 500 futures -.56%.
- NASDAQ 100 futures -.69%.
Earnings of Note
Company/Estimate
- None of note
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- None of note
- The Fed's Evans speaking and China FDI report could also impact trading today.
