Today's Headlines

Bloomberg:

• Merkel’s Cold Embrace Leaves SPD Wary of Coalition Talks. At the end of Angela Merkel’s first term, her Social Democratic coalition partner recorded its worst election result since World War II. The phenomenon was repeated two days ago when the Free Democrats, the German chancellor’s second-term ally, were bounced out of parliament for the first time since 1949. The SPD, the second-place finishers in the Sept. 22 vote, may be reluctant to try again, picking up what its chairman suggested yesterday was a poisoned chalice. 

• European Stocks Rise as Telecommunication Companies Climb. European stocks advanced, following a two-day decline, as telecommunications companies climbed, outweighing U.S. consumer confidence and regional manufacturing reports that trailed economists’ estimates. Telecom Italia SpA gained 1.7 percent as Telefonica SA agreed to increase its stake in the phone operator. Nokia Oyj added 2.4 percent after a U.S. judge found that HTC Corp. violated two of its patents. Total SA climbed 2.6 percent after Barclays Plc raised its rating on the oil producer. Burckhardt Compression Holding AG slid 7.3 percent after saying fiscal first-half net income will decline from the year-earlier period. The Stoxx Europe 600 Index added 0.2 percent to 313.2 at the close in London.

• Copper Falls Most in a Week on U.S. Economy, Budget Concern. Copper futures for delivery in December slid 1.3 percent to settle at $3.2565 a pound at 1:14 p.m. on the Comex in New York, the biggest drop since Sept. 12.

• Five Reasons Not to Trust Iran on Nukes.

• Debt Disaster Seen Unless VAT Rises to 20% by 2020: Japan Credit. Japan must raise its sales tax to at least 20 percent by the time the Olympics come to Tokyo in 2020 to avert a “disaster” in its bond market, according to the head of a panel advising the world’s biggest pension fund. 

• Chinese Cities Hooked on Land Revenue Fuel Housing Costs. Chinese cities, addicted to the money they raise by selling land to developers, are undermining the government’s multiyear campaign to contain housing costs. Municipal residential land deals, measured by area, rose 26 percent in the first eight months of the year from the same period in 2012, according to China Investment Securities Co. The average price per square meter jumped 43 percent, pushing proceeds up 80 percent to 816.5 billion yuan ($133 billion).

• Indonesia Seeks to Boost Bilateral Swaps as Rupiah Slumps. Indonesia said it will seek to enlarge bilateral swap agreements with its north Asian neighbors as Southeast Asia’s biggest economy battles a slumping currency. The country plans to boost swap arrangements to almost $40 billion by signing deals with China and South Korea and increasing an existing agreement with Japan, Industry Minister M.S. Hidayat told reporters in Jakarta after meeting with the central bank today. It may sign an agreement with China next month when President Xi Jinping visits Indonesia, he said.

• Schneiderman Calls Traders With Early Data Growing Threat. Elite investors with high-speed trading systems who gain early access to sensitive information are a growing threat to the integrity of U.S. financial markets, New York Attorney General Eric Schneiderman said at a conference. Schneiderman said today at the Bloomberg Markets 50 Summit in New York that that his office is looking at combating the advantages won by securing early access to market-moving data. Calling the issue “Insider Trading 2.0,” Schneiderman said that the combination of high-speed trading and early data access unfairly sets up a small group of investors to reap enormous profits.

• Lennar(LEN) Quarterly Profit Beats Estimates as Prices Climb. Lennar Corp., the third-largest U.S. homebuilder by revenue, reported a jump in quarterly earnings that beat analyst estimates as the company sold more homes and raised prices. Net income climbed to $120.7 million, or 54 cents a share, in the three months through August from $87.1 million, or 40 cents, a year earlier, the Miami-based company said in a statement today. Analysts expected Lennar to earn 45 cents, the average of 18 estimates compiled by Bloomberg.

• Twitter Said to Lean Toward NYSE for IPO Listing. Twitter Inc., the microblogging service that plans an initial public offering, is leaning toward listing its shares on the New York Stock Exchange, a person with knowledge of the matter said. A final decision hasn’t yet been made, said the person, who asked not to be identified because the deliberations are private.

• Carnival(CCL) Forecasts Possible Quarterly Loss Amid Lower Bookings. Carnival Corp., the world’s largest cruise-ship operator, forecast fourth-quarter results that trailed analysts’ estimates amid a decline in advance bookings and higher fuel prices. The shares slumped. The company said it expects that excluding some items, its fourth-quarter results will range from a loss of 3 cents a share to profit of 3 cents, according to a statement. That compared with the 9-cent average of analysts’ estimates, according to data compiled by Bloomberg.

Wall Street Journal: 

• Obama Sets Stage for Shift With Iran. President, in U.N. Address, Weighs In on Syria Resolution. President Barack Obama told world leaders that an agreement with Iran to contain its nuclear program should be achievable and offered Tehran improved diplomatic relations, setting the stage for heightened efforts this week to forge a rapprochement between Washington and Tehran.

• More Manufacturers Moving Operations Back to U.S.

Fox News: 

• Kerry to sign UN arms treaty, despite senators' opposition.

CNBC: 

• Malls mulling security boosts after Nairobi attack. The deadly assault on a luxury Nairobi mall Saturday has sent shock waves around the world, raising concerns about security at shopping centers amid fears of copycat violence or other terror attacks, according to industry officials and other experts.

• No handshake: Iran leader skips lunch with Obama.

Zero Hedge:

• July Case-Shiller Housing Index Misses For Third Month In A Row, Pace Of Increase At 10 Month Lows. (graph)

• Consumer Confidence Drops Most In 6 Months To 4 Month Low. (graph)

• Political Dis-Unity, Fed Dis-Credited, And Market Dysphoria.

• Treasury Yields Plunge To 7-Week Lows. (graph)

• JPMorgan's Mortgage Settlement May Reach $20 Billion.

Business Insider: 

• REPORT: Some Traders Got News Of Last Week's Fed Shocker Before Everyone Else. 

• Kenya President: Mall Siege Over, 72 Dead.

• BABY BOOMERS: Yeah, We’re Leaving The Labor Force Alright — Because We Can't Get Back In It.

• The Single Reason Why JP Morgan Stays Untouchable.

• Two 'Triple Bearish Divergences' Are Simultaneously Hitting The Stock Market Right Now.

• Richmond Fed Manufacturing Data Plunges To Zero.

New York Times:

• Vote for Merkel Seen as Victory for Austerity.

Reuters:

• Applied Materials(AMAT) to buy Tokyo Electron as chip gear sector slows. Applied Materials Inc in a deal valued at more than $9 billion, combining the No.1 and No.3 makers of chipmaking gear as demand for their products slow and it gets tougher to turn a profit. 

• New Italian targets show lack of progress since Berlusconi's fall. Italy's latest economic forecasts reveal how little progress has been made to fix its finances and restore growth since Silvio Berlusconi was forced from office at the height of the euro zone debt crisis in November 2011.

Telegraph:

• Eurozone still poses risk to global recovery, says OECD. The eurozone economy will not grow until 2014 and could still shatter the global recovery, the Organisation for Economic Cooperation and Development (OECD) has warned.

Der Spiegel: 

• Warming Plateau? Climatologists Face Inconvenient Truth. Data shows global temperatures aren't rising the way climate scientists have predicted. Now the Intergovernmental Panel on Climate Change faces a problem: publicize these findings and encourage skeptics -- or hush up the figures.

Caixin: 

• Northern Chinese City Shijiazhuang's Debt Ratio at 241%. Debt ratio of northern Chinese city of Shijiazhuang was 241% at end-June 2012, highest among all 11 prefecture-level cities in Hebei province, citing a report by the Hebei office of the Ministry of Finance. Debt ratios of six of Heibei's 11 prefecture-level cities were more than 100%.