Style Underperformer:
Sector Underperformer:
- 1) Restaurants -4.60% 2) Education -4.45% 3) Coal -4.01%
Stocks Faling on Unusual Volume:
- GE, CMG, GOOG, MCD, MMR, PGI, FHN, BCS, SBGI, CATY, E, GORO, CPNO, VOC, ATHN, HWAY, BOOM, APD, PH, SHAW, WAC, AEGR, AFFY, CCC, CEB, XXIA, CPHD, BJRI, MCS, TNC, THC, DIOD, PNRA, MLU, VRA, PRU, SBUX, ORB, MDF, UTEK, BKW, ARIA, VRTX, APOL, JACK and NAV
Stocks With Unusual Put Option Activity:
- 1) TRIP 2) NAV 3) MRVL 4) SPLS 5) ETN
Stocks With Most Negative News Mentions:
- 1) MRVL 2) ETFC 3) AMD 4) APD 5) CSX
Charts:
Style Outperformer:
Sector Outperformers:
- 1) Homebuilders +.09% 2) Utilities -.31% 3) Drugs -.34%
Stocks Rising on Unusual Volume:
- COF, SNDK, RVBD, RHI and MAN
Stocks With Unusual Call Option Activity:
- 1) XRX 2) VMED 3) FL 4) RVBD 5) PCYC
Stocks With Most Positive News Mentions:
- 1) STLD 2) HOG 3) COF 4) CQP 5) CAT
Charts:
Evening Headlines
Bloomberg:
- EU Aims For Euro-Area Bank Supervision To Start In 2013. European
leaders committed to their
goal of establishing a euro-area bank supervisor by year-end,
opening the prospect of direct aid to Spain’s banking sector. The EU
will seek to agree on a framework that makes the European Central Bank
the main supervisor by Jan. 1, according to conclusions released
early today after leaders met at a summit in Brussels. The new system,
intended to break the link between banks and governments at the root of
the region’s financial crisis, will phase in over the next year and
could cover all 6,000 euro-area banks by Jan. 1, 2014. The supervisor
can “probably be effectively operational,” allowing the euro bailout
fund to lend directly to banks, as soon as 2013, EU President Herman Van
Rompuy told reporters after the meeting. He said finance ministers will design rules for such bank rescues. German Chancellor Angela Merkel, underscoring a go-slow
approach, said before direct aid, the bank-oversight system
needs to reach “practical completion.”
- Rajoy Seeks Proof Cuts Don’t Mean Defeat in Spain Regional Vote. Prime
Minister Mariano Rajoy may hold on to power in his home region of
Galicia even as fallout over austerity saps his support elsewhere, in
local voting that may ease an obstacle to a Spanish bailout request. The
People’s Party may hold on to its 38 seats in the 75- member regional
assembly in voting this weekend, maintaining the majority it’s held
since 2009, a poll by the state-run CIS indicated on Oct. 5. If it falls
short, Socialists and Galician nationalists would seek to govern in a
coalition. The Basque Country, where the PP has never won an
election, also votes on Oct. 21, and polls signal nationalists in the
lead. Rajoy, who flies home from a European summit in Brussels today to
give the closing campaign speech in Galicia, is counting on the outcome
to show he can still win votes even after implementing the deepest
budget cuts in three decades. The end of the campaign may also reduce
political pressure on the premier to delay a European bailout request
and free his hand to make deeper deficit cuts. “If they keep their
majority, Rajoy’s first message will be we can implement austerity and
still win elections,” said Antonio Barroso, an analyst at Eurasia in
London and former
Spanish government pollster. “He’ll gain breathing space.”
- Forced Conservation in France Prompts Big Brother Outcry: Energy. Heating a French home could soon
require an income tax consultation or even a visit to the doctor under
legislation to force conservation in the nation’s $46 billion household
energy market. A bill adopted by the lower house this month would set prices that
homes pay based on wages, age and climate. Utilities Electricite de
France SA and GDF Suez SA will use the data to reward consumers who cut
power and natural gas usage and penalize those whom regulators decide
are wasteful. “It’s Orwellian,” opposition lawmaker Daniel Fasquelle said by
telephone. “The law will create huge inequalities and infringe on
people’s individual freedoms. It won’t work.”
Socialist President Francois Hollande is pushing boundaries of
privacy and privilege in carrying out a campaign promise to reduce
energy costs.
- Aluminum Supply Outpaces iPhone, Audi Demand: Chart of the Day. A jump in the amount of aluminum used in products ranging from Apple Inc.'s iPhone to Audi AG cars probably won't be enough to cut a supply glut amid record output in China, the world's top producer. Inventories in 2013
are projected to be enough to supply 8.7 weeks of global demand,
according to figures from Barclays Plc. That's 12% higher than this year
and more than double the ratio in 2006. Output in China increased 9.4%
in August from a year earlier to an all-time high, International
Aluminum Institute data show. "Aluminum is a structurally weak market,
and the oversupply hasn't been fully reflected in the price," said Jeffrey Sherman, who helps manage more than $45 billion in assets at DoubleLine Capital in Los Angeles. "It looks like the direction from here is lower. There's a lot of downside risk to it."
- China Navy Conducts East China Sea Exercises Amid Japan Row. China’s navy will conduct exercises
in the East China Sea to better coordinate missions to protect
Chinese territory, Xinhua News Agency said, a move that may
heighten tensions with Japan over disputed islands. Today’s exercises with the fishery administration and the
marine surveillance agency will involve 11 ships and eight
aircraft, Xinhua reported yesterday, citing a statement from the
navy’s Donghai fleet. “When carrying out missions in disputed waters, patrol
vessels of the fishery administration and marine surveillance
agency have been stalked, harassed and even intentionally
interfered with by foreign vessels, greatly challenging their
duties,” Xinhua said, citing the statement.
- Southeast Asia Seen Leading Rate Increases Next Year: Economy. Central banks in Southeast Asia may
be forced to abandon this year’s monetary easing and raise
interest rates before their north Asian peers in 2013, as rising
inflation risks overshadow the current economic gloom.
- Microsoft(MSFT) Profit Falls Short as Weak PC Demand Hurts Windows. Microsoft Corp., the largest software maker, reported
fiscal first-quarter profit and sales that missed analysts’ estimates as
anemic personal computer sales crimped demand for Windows, its core
operating system. Net income declined to $4.47
billion, or 53 cents a share, in the three months through Sept. 30, from
$5.74 billion, or 68 cents, a year earlier, the Redmond,
Washington-based company said in a statement. That missed the 56-cent
average estimate of analysts polled by Bloomberg. Sales fell 7.9 percent
to $16 billion, compared with the $16.4 billion average estimate.
Microsoft’s Windows unit revenue is suffering in a depressed PC market
as some consumers switch to buying tablets. During the quarter,
global PC shipments slumped 8.3 percent from a year earlier to 87.5
million, market-research firm Gartner Inc. said last week.
- Black Monday Echoes With Computers Failing to Restore Confidence. A quarter century after the worst
one-day stock crash in history, measures to prevent a repeat are
failing to keep investors from losing confidence in the market.
- AMD(AMD) Forecast Misses Estimates; to Cut 15 Percent of Staff. Advanced Micro Devices Inc., the
second-largest maker of processors for personal computers,
forecast fourth-quarter sales that will miss analysts’ estimates
and said it will cut 15 percent of its staff. AMD’s outlook adds to evidence that PC makers and their
suppliers are being battered by a weak economy and a shift in
consumer spending to tablets and smartphones -- getting scant
relief from holiday sales that usually kick in this time of
year.
Wall Street Journal:
- Early Uncertainty on Libya Account. The night before Susan Rice went public with the administration's
assessment of the Sept. 11 U.S. consulate attack in Libya, intelligence
analysts were receiving new information that contradicted the account
she gave. It then took weeks longer—until early October—for a
new intelligence assessment discounting the role of protests in the
attack to make its way into public statements from senior officials in
the Obama administration.
- Buyers Run Back Into Open-Ended ARMs. Luxury-home buyers are returning to adjustable-rate mortgages, despite
pitfalls that pushed many homeowners into foreclosure during the housing
bust. The pitch? A lower interest rate—at least for a period—than a fixed-rate
mortgage means savings could be huge.
- China Faces Tough Choice on Growth. Incoming Leaders Must Decide Whether to Stick to Old Economic Model or Tackle Reforms to Get More Money to Consumers. China's latest evidence of sputtering growth underlines a dilemma for
its incoming leaders: They can shore up the economy by doubling down on
an exhausted growth model, or take a risky political bet on reforms
that could worsen the slowdown in the short term. The
challenge—an unusual one for a Communist government—is to put more money
in the pockets of its consumers by tackling the burgeoning inequality
in income, which has contributed to pushing China's growth off kilter.
- Syria Strikes Claim Dozens a Day After Helicopter Downed. Dozens of people were killed in airstrikes Thursday in northwestern
Syria as the government appeared to move to reclaim a strategically
located town from rebels, activists said, in one of the bloodiest recent
incidents in the country's civil conflict. Regime fighter jets
attacked Maarat al-Nouman, a town on a highway linking Syria's largest
cities, according to activists, providing a gruesome glimpse into the
growing toll of aerial bombardment by the regime.
- The Foreign Policy Debate. How Romney can show Americans he can be a capable Commander in Chief. When the history of the Obama Administration is written, it will be
noted that never before has an American President bet so much on the
power of his own charisma to change the world. As Mitt Romney prepares
for the foreign policy debate in Florida on Monday, his challenge will
be to show what a losing bet that's been—and how a Romney Administration
would do better.
CNBC:
- High Profile Earnings Misses Keep Investors Skeptical.
- China's Foreign Investment Shows Further Declines. China's foreign direct investment inflows fell 3.8 percent in the first
nine months from a year ago, extending the longest run of declines since
the depths of the global financial crisis as stiff economic headwinds
dent corporate spending plans. The Commerce Ministry said on Friday that China drew $83.4 billion in
foreign direct investment between January and September, with
September's inflow alone down 6.8 percent on year-ago levels at $8.4
billion.
- Top Bankers Urge Washington to Avoid Fiscal Cliff. Top financial industry executives urged the Obama administration and
Congress on Thursday to stop automatic fiscal austerity measures from
kicking in at year-end, but did not propose fresh ideas for replacing
those harsh budget and tax measures. "The consequences of inaction ... would be
grave," members of the Financial Services Forum, an industry trade
association, wrote to President Barack Obama and members of Congress in a
letter released on Thursday. The
letter, signed by 15 top executives of some of largest U.S. and global
financial services companies, points to rising concern that lawmakers
will run out of time to seal a deal to avoid sharp tax increases and
spending cuts. With a presidential election leaving the political
landscape uncertain, negotiations to avert what has become known as the
fiscal cliff are not expected until after the ballots have been counted
on November 6 - and that has made many nervous.
Zero Hedge:
Business Insider:
Washington Post:
- CIA seeks to expand drone fleet, officials say. The CIA is urging the White House to approve a significant expansion
of the agency’s fleet of armed drones, a move that would extend the spy
service’s decade-long transformation into a paramilitary force, U.S.
officials said. The proposal by CIA
Director David H. Petraeus would bolster the agency’s ability to sustain
its campaigns of lethal strikes in Pakistan and Yemen and be able, if
directed, to shift aircraft to emerging al-Qaeda threats in North Africa
or other trouble spots, officials said.
Washington Examiner:
- Poll shows Romney leading in blue Pennsylvania. A new poll shows Republican Mitt Romney
leading in Pennsylvania, a state that Republicans had all but written
off just weeks ago but which is now listed as a toss up by the Real
Clear Politics website. Susquehanna Polling and Research provided The Washington Examiner with
a poll it conducted for state party officials that shows Romney with a
49 percent to 45 percent lead over President Obama. It's the first poll
to show Romney leading among likely voters in the Keystone State.
The Hill:
Reuters:
- Ally Financial latest U.S. bank to face cyber attacks. Ally Financial Inc on Thursday became the latest U.S. financial institution to face cyber attacks that may stem from hackers in Iran.
Bank of America Corp (BAC.N), Wells Fargo & Co (WFC.N) and other
banks in recent weeks have suffered so-called denial of service attacks
in which hackers use a high volume of incoming traffic to delay or
disrupt customer websites. Regional bank BB&T Corp (BBT.N) and
credit card issuer Capital One Financial Corp (COF.N) confirmed
disruptions earlier this week. A spokeswoman for Ally, the former auto
lending arm of General Motors Co (GM.N), said the bank was investigating
the "unusual traffic" on its website. Sources
have previously told Reuters that the attacks could be part of a
year-long cyber campaign waged by Iranian hackers against major U.S.
financial institutions and other corporate entities.
- Moody's keeps negative outlook for German banking system. Moody's Investors Service said the
outlook for Germany's banking system remained negative, citing
margin pressure due to intense competition, limited loan growth,
Europe's recession and deteriorating asset quality. "Moody's says that intense competition and low interest
rates are causing margin pressure that will likely further erode
the banks' already-weak revenues and profits over the 12-18
month outlook period," the rating agency said in a report.
- SanDisk(SNDK) sees margin growth, memory prices stabilizing. SanDisk Corp's quarterly results
topped expectations as rising demand for chips used in
smartphones and tablets and a limited supply drove up prices for
flash memory, a trend that the chipmaker expects will continue. The surprisingly strong margin outlook from the company and
current-quarter revenue forecast of $1.5 billion, plus or minus
$50 million, drove shares up 4 percent after market.
Financial Times:
- China Solar-Panel Industry Like 'Patient on Life Support'. China's solar-panel industry will have to undergo "radical" consolidation and cuts to overcome its "crisis" of overcapacity,
citing Li Junfeng, deputy director of the energy research institute of
China's National Development and Reform Commission, as saying. At least half of the global solar-panel-manufacturing capacity will have to be eliminated, he said in Beijing.
China Daily:
- China Should Keep Stimulus Small, CASS Researcher Says. China should keep stimulus
measures to a scale that won't cause a rebound in housing prices, Yi
Xianrong, researcher with the Institute of Finance and Banking under the
Chinese Academy of Social Sciences, writes in a commentary today. Loose monetary policy would likely reverse housing market curbs, Yi writes. Low borrowing costs wouldn't promote growth because companies won't expand investment without increases in orders, he said.
Xinhua:
- China's Xinjiang should curb the "rapid" rise in electrolytic aluminum capacity, citing the National Development and Reform Commission.
Shanghai Securities News:
- China
should avoid large profits in the real estate industry, citing Wang
Juelin, a researcher at the Ministry of Housing and Urban-Rural
Development. China will continue limits on property purchases for at least the next 1-2 years, citing Wang.
Evening Recommendations
Piper Jaffray:
- Raised (CMI) to Overweight, target $115.
Night Trading
- Asian equity indices are -.75% to unch. on average.
- Asia Ex-Japan Investment Grade CDS Index 115.50 +2.50 basis points.
- Asia Pacific Sovereign CDS Index 92.75 -2.75 basis points.
- FTSE-100 futures -.31%.
- S&P 500 futures -.01%.
- NASDAQ 100 futures unch.
Morning Preview Links
Earnings of Note
Company/Estimate
- (APD)/1.44
- (BHI)/.85
- (CBE)/1.14
- (GE)/.37
- (HON)/1.13
- (IDXX)/.73
- (IR)/.98
- (MAN)/.68
- (MCD)/1.48
- (PH)/1.76
- (SLB)/1.07
Economic Releases
10:00 am EST
- Exiting Home Sales for September are estimated to fall to 4.74M versus 4.82M in August.
Upcoming Splits
Other Potential Market Movers
- The German PPI could also impact trading today.
BOTTOM LINE: Asian indices are mostly lower, weighed down by technology and industrial shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is 25% net long heading into the day.
Broad Market Tone:
- Advance/Decline Line: Lower
- Sector Performance: Most Sectors Declining
- Volume: Around Average
- Market Leading Stocks: Underperforming
Equity Investor Angst:
- VIX 15.29 +1.46%
- ISE Sentiment Index 127.0 +2.42%
- Total Put/Call .85 +8.97%
- NYSE Arms .73 -7.54%
Credit Investor Angst:
- North American Investment Grade CDS Index 90.82 bps +1.29%
- European Financial Sector CDS Index 158.48 bps +3.45%
- Western Europe Sovereign Debt CDS Index 105.94 bps +1.10%
- Emerging Market CDS Index 210.14 bps +.31%
- 2-Year Swap Spread 9.75 +.75 basis point
- TED Spread 22.25 +.75 basis point
- 3-Month EUR/USD Cross-Currency Basis Swap -25.25 -1.0 basis point
Economic Gauges:
- 3-Month T-Bill Yield .10% -1 basis point
- Yield Curve 153.0 +2 basis points
- China Import Iron Ore Spot $115.50/Metric Tonne +.09%
- Citi US Economic Surprise Index 53.90 -1.6 points
- 10-Year TIPS Spread 2.52 +4 basis points
Overseas Futures:
- Nikkei Futures: Indicating -10 open in Japan
- DAX Futures: Indicating -19 open in Germany
Portfolio:
- Slightly Lower: On losses in my Medical/Tech/Biotech sector longs
- Disclosed Trades: Added to my (IWM)/(QQQ) hedges
- Market Exposure: Moved to 25% Net Long
Bloomberg:
- EU Summit Tussle Over Costs Threatens to Derail Bank Union Plans. The French-backed effort to fast- track a European
bank supervisor is running into German-led concern over potential costs
as the region’s leaders tussle over putting their crisis-fighting
blueprint into action. The 27-nation European Union has
struggled to maintain momentum on a June plan to spur investor
confidence by putting the European Central Bank in charge of banks
across the euro area. Divisions have flared over the scope of the
ECB’s supervisory powers and how losses would be shared. As leaders
gather in Brussels for a two-day summit, French President Francois
Hollande says efforts to stem the turmoil that began in 2009 could
unravel if
the EU fails to deliver on its promises. He called on the EU to press
ahead on banking union, provide economic help to countries that rein in
budget deficits, and show investors that Greece will be able to stay in
the euro zone if it keeps its commitments.
- Merkel Proposes EU Aid Fund as Disagreements Loom Over Summit. German Chancellor Angela Merkel proposed a new European aid
fund to bolster competitiveness as she highlighted disagreements over
budget rules, joint borrowing and bank supervision in a pre-summit
address. Speaking to lawmakers in Berlin before heading to
Brussels for a two-day gathering of European Union leaders, Merkel laid
out her vision for more economic coordination, while expressing
“surprise” at negative reaction to a proposal for a watchdog with veto
power over national budgets. Her vision includes a fund “limited in time
and project-based” and possibly stocked by the proposed financial
transaction tax, she said. “To give all member states the
opportunity then to improve their competitiveness and to actually be
able to implement these commitments, I propose that we introduce a new
element of solidarity,” Merkel said in her speech at the Reichstag
parliament building. “Yes, we need solidarity, but we need a form of
solidarity that leads to what we need: more competitiveness.”
- On Crisis Anniversary, Athens Tear Gas Defies Merkel’s Stability.
- UBS(UBS) Said to Widen Job Cuts to 400 at Investment Bank. UBS
AG (UBSN) is preparing another round of job cuts across its investment
bank in Europe as Chief Executive Officer Sergio Ermotti tries to
overhaul the firm, two people with knowledge of the matter said. UBS is considering cuts in equities and fixed income as it
trims its merger advisory staff, bringing total reductions to
about 400, or 10 percent of the unit’s front-office employees in
the region, said the people, who asked not to be identified
because the review is private. The cuts are part of plans to
pare back headcount globally, said one of the people.
- Google(GOOG) Reports Profit, Sales That Miss Analysts’ Estimates. Google
Inc. (GOOG) reported third-quarter profit and sales that missed
analysts’ estimates, a sign that its tools are becoming less valuable to
advertisers while costs associated with expansion into new businesses
are chipping away at profitability. Profit excluding some items was
$9.03 a share, the Mountain View, California-based company said in a
regulatory filing today. Excluding sales passed to partner sites,
revenue was $11.3 billion. Analysts on average had estimated profit of
$10.65 a share on sales of $11.8 billion. The stock tumbled after the
results were released inadvertently, and trading was later halted. The
average amount advertisers paid each time a user clicks on a promotion
declined about 15 percent from a year earlier, and was 3 percent less
than the prior period. The company also is ramping up spending on
engineering, marketing and acquisitions to help it expand beyond search
advertising. The company earlier this year spent $12.4 billion on
Motorola Mobility Holdings, pushing it further into the hardware market
and stepping up its rivalry with Apple Inc. “The core business itself is
slowing down,” said Colin Gillis, an analyst at BGC Partners LP. Google
shares tumbled as much as 11 percent to $676 after the report, which
came during regular trading hours in New York. The stock was later
halted.
- Wall Street CMOs Crushed as Sales at 3-Year Low: Credit Markets. The Federal Reserve’s effort to
support the economy by acquiring $40 billion a month of mortgage
bonds is crimping Wall Street’s business of packaging the
government-backed securities into new notes. After falling last month to a three-year low of $19
billion, issuance of so-called agency collateralized mortgage
obligations, or CMOs, may decline 10 percent to 20 percent in
October, according to Scott Buchta, head of fixed-income
strategy at Brean Capital LLC. Sales last month were 25 percent
below the 2012 average through August, according to data
compiled by Bloomberg. “When you have a buyer with a different goal than the rest
of the market” it can crowd out other investors, said Bill Anast, who runs the agency CMO business in New York at Barclays
Plc, the third-largest underwriter.
- Man Group Outflows Rise to $2.2 Billion Amid ‘Subdued’ Sales. Man
Group Plc (EMG), the world’s biggest publicly traded hedge-fund
manager, said outflows increased 57 percent in the third quarter amid an
environment for sales Chief Executive Officer Peter Clarke called
“subdued.” Clients pulled a net $2.2 billion from the firm, up from
$1.4 billion in the second quarter, the London-based firm said
in a statement today. Customers redeemed $5.2 billion from Man
Group’s investment funds, compared with $3 billion of sales. “The flow environment continues to be challenging and this
was reflected in lower sales in the quarter,” Clarke said in
the statement. “Investor sentiment, and consequently the
outlook for flows, continues to be subdued.”
- A123(AONE) Shows Risks as Battery Science Meets Government Cash.
A123 Systems Inc., the electric-car battery maker that filed for
bankruptcy this week, had promising chemistry and marquee customers.
What it couldn’t overcome, even with government funding, were missteps
in manufacturing. A123’s filing immediately became a presidential
campaign issue, because the Obama administration pledged $249.1 million
in grants three years earlier to help the company bring jobs and
factories to the U.S. Republican Mitt Romney’s campaign pointed to the
bankruptcy as an example of President Barack Obama’s failures in
economic policy.
Wall Street Journal:
- Dividends: Start Screaming. Enough about the "fiscal cliff." What about the dividend cliff? At one second after midnight on Jan. 1, 2013, the maximum tax rate on
dividends is likely to go from 15% to either 18.8% or 43.4%. The
best-case scenario: Congress retains the top dividend-income tax rate of
15%, and the only increase is the scheduled 3.8% surtax on investment
income for high earners. The worst case: Congress decides dividends are
to be taxed at ordinary-income rates, and the highest rate jumps to
39.6%, plus the same 3.8% surtax.
- Weaker U.S. Jobs Data Pressure Copper Price. The most actively traded contract, for December delivery, was recently
down 1.60 cents, or 0.4%, at $3.7320 a pound on the Comex division of
the New York Mercantile Exchange. Weekly claims for initial unemployment benefits in the U.S.
unexpectedly ticked higher in the week ended Oct. 13, instilling a
cautious tone among copper traders. Jobless claims rose by 46,000 to a
seasonally adjusted 388,000, exceeding forecasts of 365,000 new
applications.
CNBC:
Zero Hedge:
Business Insider:
- GALLUP: Romney Opens Up Huge Seven-Point Lead Over Obama.
Mitt Romney widened his lead over President Barack Obama to seven
points today, giving the Republican challenger his biggest lead yet in
the poll and putting him well outside the margin of error. The seven-day tracking poll of likely voters showed Romney at 52 percent, up from 51 percent Wednesday. Obama's numbers stayed static at 43 percent. Today's results — which include polling from last Thursday through yesterday — are the first round of national poll numbers that factor in the second presidential debate.
- ZULAUF: China Is Actually Growing At A 3% Rate. Swiss hedge fund manager Felix Zulauf believes everyone is overestimating China's growth rates while underestimating its problems.
Washington Post:
NYPost:
AARP:
FXStreet.com:
Reuters:
- Spanish bad loans hit new record in August. Spanish
households and companies defaulted on their debts in record numbers in
August, hurting the country's lenders and highlighting the need for an
aid package and bad bank to help the economy out of recession. A
property crash left banks with billions of euros in bad debt from real
estate developers on their balance sheets but the problems have spread
to small businesses and other sectors. Loans that fell into arrears
in August increased by 5.3 billion euros ($7 billion) from July,
reaching 178 billion euros, Bank of Spain data showed on Thursday.
Spain is setting up a bad bank to siphon property assets off lenders'
balance sheets and banks are preparing to receive the first funds from a
100-billion-euro credit line agreed with the European Union. But the
record loan data raises the question of whether consumer loans should
also be transferred to the bad bank and if Spain will take too little of
the European cash. The government estimates it only needs 40 billion
euros. "The most obvious thing from this data is that the Spanish
government should aim for a greater recapitalization exercise," said
Gilles Moec, economist at Deutsche bank. "There is a risk of
undershooting with the recapitalization plan as it stands today."
- Britain seems to be saying "bye bye" to EU, says Finland. Britain's policy towards Europe is becoming harder to understand and
there is a sense the country is slowly waving goodbye to the European
Union, Finland's Europe minister said on Thursday. Speaking at an EU summit, Alex Stubb said Britain appeared to be
purposefully putting itself at odds with its partners. Finland allies
closely with Germany on a range of EU issues and has a substantial voice
in EU policymaking. "It's almost as if it's 26 plus 1, to be very honest," he said when
asked if the push for deeper integration among the 17 euro zone
countries risked leaving Britain and the other nine EU member states in a
second-tier group. "I think Britain is right now,
voluntarily, by its own will, putting itself in the margins," he told
Reuters in an interview. "We see it in foreign
policy, we see it in economic policy, we see it linked to the single
currency. And I, as someone who advocates the single market and free
trade, find that very unfortunate, very unfortunate. "It's almost as if the boat is pulling away and one of our best
friends is somehow saying 'bye bye' and there's not really that much we
can do about it."
- European slowdown could hurt Mexico -cenbank's Sanchez. A further decline in
Europe's economic growth could hurt Mexico by causing a
reduction in exports to Europe and curbing investment in Mexico,
central bank board member Manuel Sanchez said on Thursday. Sanchez, in the text of a speech delivered to a central bank
conference in Poland, also said some Mexican banks could face
fallout from events affecting their European parents, although
the sector in general was in a sound position. "Further deceleration of EU growth could hurt Mexico's
economic prospects, indirectly if the U.S. economy slows as a
result, but also directly through less dynamic exports of goods
and services to Europe, especially in vehicle shipments
which are the most important export item, and lower European
investment, likely in manufacturing and financial services,
which have been the leading recipient sectors," he said.
Telegraph:
Style Underperformer:
Sector Underperformer:
- 1) Internet -3.03% 2) Computer Services -2.51% 3) Gold & Silver -2.05%
Stocks Faling on Unusual Volume:
- GOOG, NOG, SZYM, FIO, IBM, BBT, HBAN, RDSB, ALGN, NVDQ, SCSS, GORO, MLNX, ABT, DTG, RGA, DHR, LTM, UFPI, FTNT, ADES, HSIC, CY, PDCO, LHO, HWD, LH, ORLY, NOG, SIRO, HNI, NGLS, ELLI, PANW and PCRX
Stocks With Unusual Put Option Activity:
- 1) JNPR 2) HTZ 3) BBT 4) BHI 5) NAV
Stocks With Most Negative News Mentions:
- 1) POT 2) STJ 3) DHR 4) VALE 5) CMI
Charts: