Bull Radar

Style Outperformer:

• Small-Cap Value -.60%

Sector Outperformers:

• 1) Gaming +.73% 2) Tobacco +.56% 3) Utilities +.43%
  

Stocks Rising on Unusual Volume:

• KEP, AM, IDCC and ZUMZ

Stocks With Unusual Call Option Activity:

• 1) DNDN 2) ETP 3) CE 4) SAN 5) QID
  

Stocks With Most Positive News Mentions:

• 1) ALK 2) MDT 3) DTV 4) ORCL 5) KO

Charts:

• ETFs Rising on Unusual Volume 
• Stocks Rising on Unusual Volume

Wednesday Watch

Evening Headlines
Bloomberg: 

• Rajoy Nemesis Opens Catalonia Front in Europe Debt-Crisis Fight. Spanish Prime Minister Mariano Rajoy’s dispute with the leader of his country’s richest region erupted into the newest front of Europe’s effort to extinguish the financial crisis. Catalan President Artur Mas yesterday called early elections, with greater autonomy at stake, five days after Rajoy rejected his bid for increased control of his region’s tax revenue. Mas set the vote for Nov. 25, saying the time has come to seek “self-determination.” The move risks plunging Rajoy into a constitutional crisis amid a recession that has sent unemployment to 25 percent. He’s struggling to persuade Spaniards to accept the deepest austerity measures on record and stoking frustration in Germany over his foot-dragging on whether to seek a bailout. As police clashed with protesters in Madrid yesterday, Rajoy didn’t respond to Mas’s defiance. “It’s the very last thing Rajoy needed right now, and the last thing Europe needed,” said Ken Dubin, a political scientist who teaches at Carlos III University and IE Business School in Madrid. The standoff may mark the end of the rally in Spanish bonds triggered by the European Central Bank’s decision to buy struggling nations’ debt on condition they accept the terms of a bailout from euro-area governments.
• Rajoy Bets Italian Woes May Ease Spain Rescue Terms: Euro Credit. Spanish Prime Minister Mariano Rajoy may be delaying a bailout request on a bet that renewed market tension will also force Italy to seek aid, strengthening his bargaining power and giving political cover. Spain will have more leverage if it can fend off a rescue until Italy joins it in needing ECB help to bring down the cost of servicing its debt, said Raphael Gallardo, head of macroeconomics at Rothschild Asset Management in Paris.
• ECB’s Bond Buying May Hinder Reforms, Weidmann Tells Zuercher. The European Central Bank’s bond purchasing program could hinder a recovery in the euro zone if it eases pressure on governments to implement reforms, German Bundesbank President Jens Weidmann said in an interview with Swiss newspaper Neue Zuercher Zeitung. Weidmann questioned whether bond-purchase programs are the appropriate mechanism for solving structural problems, such as the lack of competitiveness and loss of trust in an individual country’s fiscal policies, according to the interview. Weidmann was the only member of the ECB Governing Council to oppose the so-called Outright Monetary Transactions program. Weidmann said the ECB’s fiscal policy seeks to keep risk low and buying back bonds causes the opposite. Maintaining price stability is the bank’s primary purpose, he said.  
• Barclays(BCS) Sued by U.S. Regulator Over Mortgage Security Sales. Barclays Plc is being sued by the U.S. regulator of credit unions, which says the bank sold $555 million in misrepresented mortgage-backed securities that contributed to two lender failures. The National Credit Union Administration announced the suit filed in federal court in Kansas in a statement today. 
• China-Japan Foreign Ministers Meet as Island Tensions Hurt Trade. The foreign ministers of China and Japan met in New York in an attempt to ease rising tensions over a territorial dispute that is hurting trade between Asia’s two biggest economies. China’s Yang Jiechi held talks with Japanese counterpart Koichiro Gemba on the sidelines of the United Nations General Assembly. Yang reiterated China’s “solemn position” over claims to islands in the East China Sea, the official Xinhua News Agency said. Gemba told reporters that the atmosphere in the meeting was “severe,” Japan’s Kyodo News reported.   
• Buffett-Backed BYD Tumbles as CLSA Cuts Share-Price Target 94%. BYD Co., the Chinese carmaker partly owned by Warren Buffett’s Berkshire Hathaway Inc., fell the most in two months in Hong Kong trading after CLSA Asia Pacific Markets cut the stock’s price target by 94 percent. BYD dropped 5.2 percent to HK$13.94 at 9:33 a.m., headed for its biggest drop since July 16. CLSA lowered its 12-month price goal for the Hong Kong-traded shares to HK$0.41, from a previous estimate of HK$7.40. The electric-car maker, based in Shenzhen in southern China, reported on Aug. 27 first-half profit plunged 94 percent as sales of handset components and batteries shrank. Net income for the first nine months is expected to fall by as much as 95 percent, the company said. MidAmerican Energy Holdings Co., a unit of Buffett’s Berkshire Hathaway, bought 9.9 percent of BYD in September 2008 to tap rising demand for clean technology. “The company will likely deteriorate further due to declining business in mobile phone components, rechargeable batteries and new energy,” Scott Laprise, a Beijing-based analyst at CLSA, wrote in a research note yesterday. “We see few positive catalysts going forward and maintain our conviction” to sell the stock, Laprise wrote.  
• China’s Stocks Fall, Poised for Biggest Quarterly Loss in Year. China’s stocks fell, sending the benchmark index toward its biggest quarterly decline in a year, on speculation the economic slowdown is deepening and measures by global central banks won’t be enough to boost growth. China Vanke Co. (000002) and Poly Real Estate Group Co. dropped more than 1 percent on earnings concerns after the southern city of Guangzhou restricted sales of homes before they are completed. BYD Co. (002594), the automaker part-owned by Warren Buffett’s Berkshire Hathaway Inc., slid to a five-week low after CLSA Asia Pacific Markets cut its share-price estimate of the company’s Hong Kong- listed stocks by 94 percent. “The market has no confidence in China’s old growth model of investment and exports any more,” said Wang Zheng, Shanghai- based chief investment officer at Jingxi Investment Management Co., which manages about $120 million. “With the two growth drivers fading, we haven’t found a new engine. That’s why stocks are performing so poorly.” The Shanghai Composite Index (SHCOMP) fell 0.3 percent to 2,023.75 as of 10:41 a.m. local time, heading for a 9.1 percent slump this quarter.
• Iron Ore Unlikely to Rebound as China Slows, Shale-Inland Says. Iron-ore prices, down 25 percent this year, probably won’t rebound as the economy slows in China, the world’s biggest importer and steelmaker, according to Shale- Inland Holdings LLC. Prices for steel, which have dropped 10 percent in 2012, also won’t recover, said Craig Bouchard, the chief executive officer of Shale-Inland, which fabricates and distributes metals. China’s economy will grow less than analysts expect, at 5 percent to 6 percent in 2013, Bouchard said. That compares with a Bloomberg survey of as many as 45 analysts, which showed a median forecast of 7.7 percent growth this year and 8 percent in 2013. There’s a 50 percent chance that the U.S. will slide into a recession next year as consumer spending ebbs, he said. “There’s not going to be a recovery in steel in the next six months,” Bouchard, who founded Schiller Park, Illinois- based Shale-Inland in 2010, said in a telephone interview. “You can’t expect a recovery in iron-ore prices until we see a recovery in the world economy.” 
• CMBS Selling Like It's 2007 in Pre-Crisis Spirit: Credit Markets. Commercial-mortgage bond sales are surging to the most in almost five years with yields at record lows, fueling a lending boom. Banks have arranged $6.9 billion this month in sales of bonds linked to skyscrapers, shopping malls and hotels, the most since December 2007, according to data from Bank of America Corp. Securities in the Barclays Investment Grade CMBS index yield 2.15%, the lowest since the index started in 1997. Property owners are benefiting as investors chase riskier assets with Federal Reserve Chairman Ben S. Bernanke saying this month that interest rates will likely hold near zero at least through mid-2015.
• SEC Says New York Firm Allowed High-Speed Stock Manipulation. A New York-based brokerage allowed overseas clients to run a scheme aimed at distorting stock prices by rapidly canceling orders, according to the U.S. Securities and Exchange Commission. Clients of Hold Brothers On-Line Investment Services were “repeatedly manipulating publicly traded stocks” by placing and erasing orders in an illegal strategy designed to trick others into buying or selling, the SEC said today in a release. Hold Brothers, its owners, and the foreign firms Trade Alpha Corporate Ltd. and Demonstrate LLC agreed to settle allegations that the New York broker failed to supervise customers and pay $4 million in total SEC fines. The SEC complaint targeted practices that abused high-speed computer trading on American equity venues. As high-frequency activity has grown in recent years, the agency’s efforts to stop fraudulent practices such as “layering” or “spoofing” have extended to the automated trading tactics. “Direct access firms like these are the gatekeeper to our markets,” Sang Lee, managing partner at research firm Aite Group LLC in Boston, said today in a phone interview. “That’s why the SEC is doing this. This is certainly the area that they need to focus on, and on a larger scale.”

Wall Street Journal: 

• Spanish Leader Outlines Fresh Overhauls. Rajoy, in Interview, Pledges to Limit Early Retirement, Set Budget Monitor. The Spanish government will restrict programs that allow people to take early retirement as part of overhauls to rein in the country's debt and shore up its shrinking economy, Prime Minister Mariano Rajoy said on Tuesday. In an interview with editors and reporters of The Wall Street Journal, Mr. Rajoy said measures to be unveiled Thursday would also include the creation of an independent agency to monitor compliance with budget targets, new job-training programs and legislation to sweep away many onerous government regulations.
• Alan Dershowitz: The Message Obama Should Have Sent. Forget about a 'red line.' Try a warning to Iran in black-and-white.

Barron's:

• Jabil(JBL) Slips: FYQ4 EPS Missses, Q1 View Light.

MarketWatch.com: 

• UBS chairman sees risks in QE programs: report. Widespread central bank action to support economies by printing money is distorting market prices and may create asset bubbles, said UBS Chairman Axel Weber, according to a report in the Australian Financial Review.

 CNBC: 

• Romney's Take-Home-Pay Message. In a 60 Minutes interview this past Sunday, Romney did mention tax cuts, and take-home pay, too. Whoa. (Read More: Obama and Romney Offer Possible Preview of Their First Debate.) “Take-home pay” is an old Reagan line. The Gipper appealed to middle-class voters who clearly understood that if you keep more of what you earn, and your take-home pay goes up, that’s the benefit of a tax cut.
• Bet You Don't Know About These Obama Gaffes.

Zero Hedge:

• Five SAC Traders Implicated In Insider Trading Case. 
• Several Exponential Charts.
• Quantifying The 6 Downside And 2 Upside Risks To Global Markets.

Business Insider: 

• Chinese Government Publishes Paper Calling Itself The 'Indisputable Owner' Of The Diaoyu Islands.  
• Crazy Video Of Spanish Protesters Dropkicking A Cop.
• Spain Has A Brand New Double-Crisis On Its Hands.
• There's Another Imminent 'Cliff' You Should Know About, And It's $1.6 Trillion Tall.
• Intel's(INTC) CEO Says Windows 8 Is Full Of Bugs.

Reuters: 

• China carrier a show of force as Japan tension festers. China sent its first aircraft carrier into formal service on Tuesday amid a tense maritime dispute with Japan in a show of force that could worry its neighbours. China's Ministry of Defence said the newly named Liaoning aircraft carrier would "raise the overall operational strength of the Chinese navy" and help Beijing to "effectively protect national sovereignty, security and development interests". 
• Euro zone will struggle to create fiscal union-former UK PM. Europe is enjoying a moment of calm due to the European Central Bank's plan to buy debt of euro zone countries, but the region will struggle to solve more fundamental problems, former British Prime Minister Gordon Brown said on Tuesday.  
• Syrian rebels bomb security building in Damascus. Syrian insurgents detonated bombs at a building occupied by pro-government militias in Damascus on Tuesday and France called for U.N. protection of rebel-held areas to help end Syria's bloodshed and rights abuses. Activists say that more than 27,000 people have been killed in the 18-month-old uprising against President Bashar al-Assad but jostling for regional advantage by world powers has thwarted effective U.N. Security Council action to defuse the conflict.

Financial Times: 

• ‘Big disparity’ in banks’ loan risk ratings. European banks are using such different estimates of risk that some are holding between double and four times as much capital as their competitors hold against potential losses from apparently similar loans, analysis by Barclays shows. Lloyds Banking Group assigns a risk weighting of 28 per cent to its portfolio of A-rated corporate loans, while BNP Paribas gives the same category a 14 per cent risk rating. As a result, BNP is required to hold half as much capital.

Telegraph:

• Spanish austerity protest turns violent: in pictures.

Kathimerini: 

• General Strike to Shut Down Greece on Wednesday.

Asahi:

• Toyota to Cut Planned China Output to Zero in October. The company has scrapped production plans for October as sales of new vehicles in China are expected to be difficult due to the islands dispute. The company will also halt exports of finished vehicles including Lexus models from Japan to China. Difficulty in importing parts from Japan due to tightened customs checks may also be a factor. The company produced 78,000 vehicles in October of lats year.

Nikkei: 

• Toyota, Nissan to Cut China Output on Islands Dispute. The companies will lengthen a planned suspension of output for the forthcoming national holidays as anti-Japanese consumer sentiment in China is expected to impact sales. Honda is also considering cutting operating hours at plants.   

Evening Recommendations 

• None of note

Night Trading

• Asian equity indices are -1.50% to -.50% on average.
• Asia Ex-Japan Investment Grade CDS Index 145.0 +8.0 basis points.
• Asia Pacific Sovereign CDS Index 118.25 +1.75 basis points.
• FTSE-100 futures -.80%.
• S&P 500 futures +.07%.
• NASDAQ 100 futures +.02%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (PRGS)/.23
• (FUL)/.53
• (WOR)/.47

Economic Releases
10:00 am EST

• New Home Sales for August are estimated to rise to 380K versus 372K in July.

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory build of +1,900,000 barrels versus a +8,534,000 barrel gain the prior week. Distillate inventories are estimated to rise by +500,000 barrels versus a -322,000 barrel decline the prior week. Gasoline supplies are estimated to rise by +500,000 barrels versus a -1,407,000 barrel decline the prior week. Finally, Refinery Utilization is expected to rise by +.25% versus a +4.2% gain the prior week.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The weekly MBA mortgage applications report, Italian retail sales report and the 5Y T-Note auction could also impact trading today.

BOTTOM LINE: Asian indices are lower, weighed down by technology and automaker 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.

Stocks Reversing Lower into Final Hour on Rising Global Growth Fears, Increasing Eurozone Debt Angst, Earnings Worries, Technical Selling

Broad Market Tone:

• Advance/Decline Line: Substantially Lower
• Sector Performance: Almost Every Sector Declining
• Volume: Slightly Below Average
• Market Leading Stocks: Underperforming

Equity Investor Angst:

• VIX 15.01 +6.08%
• ISE Sentiment Index 101.0 -23.4%
• Total Put/Call .79 -1.25%
• NYSE Arms 1.01 -35.65%

Credit Investor Angst:

• North American Investment Grade CDS Index 98.16 bps +2.63%
• European Financial Sector CDS Index 193.93 bps +3.80%
• Western Europe Sovereign Debt CDS Index 136.92 +1.14%
• Emerging Market CDS Index 227.12 +3.23%
• 2-Year Swap Spread 13.75 +.5 basis point
• TED Spread 25.75 -1.25 basis points
• 3-Month EUR/USD Cross-Currency Basis Swap -22.75 -.75 basis point

Economic Gauges:

• 3-Month T-Bill Yield .11% +1 basis point
• Yield Curve 141.0 -5 basis points
• China Import Iron Ore Spot $103.70/Metric Tonne unch.
• Citi US Economic Surprise Index 29.1 +8.5 points
• 10-Year TIPS Spread 2.44 -2 basis points

Overseas Futures:

• Nikkei Futures: Indicating -107 open in Japan
• DAX Futures: Indicating -62 open in Germany

Portfolio:

• Slightly Higher: On gains in my Emerging Markets shorts and Index Hedges
• Disclosed Trades: Added to my (IWM)/(QQQ) hedges and to my Emerging Markets shorts
• Market Exposure: Moved to 25% Net Long

Today's Headlines

Bloomberg:

• Fed's Plosser Says QE3 Risks Fed Credibility, Won’t Boost Jobs. Federal Reserve Bank of Philadelphia President Charles Plosser said new bond buying announced by the Fed this month probably won’t boost growth or hiring and may jeopardize the central bank’s credibility. “We are unlikely to see much benefit to growth or to employment from further asset purchases,” Plosser said in the text of a speech prepared for delivery today at the reserve bank in Philadelphia. “Conveying the idea that such action will have a substantive impact on labor markets and the speed of the recovery risks the Fed’s credibility.” Economic research indicates that additional asset purchases are “unlikely to reduce long-term interest rates by a significant amount” and that lowering rates “by a few more basis points” won’t spur growth and hiring, said Plosser. “I opposed the Committee’s actions in September because I believe that increasing monetary policy accommodation is neither appropriate nor likely to be effective in the current environment,” Plosser said. “Every monetary policy action has costs and benefits, and my assessment is that the potential costs and risks associated with these actions outweigh the potential meager benefits.” The Fed’s “hard-won credibility” is crucial because if the public doesn’t have confidence in policy makers, their ability to set effective monetary policy will be harmed, hurting households and businesses, Plosser said. If people believe the central bank will delay raising rates, they may “infer that the Fed is willing to tolerate considerably higher inflation,” spurring an increase in inflation expectations that would require a response from the FOMC, Plosser said. “The Fed’s most recent actions carry with them significant risks,” Plosser said. “I am not forecasting that those risks will necessarily materialize and I hope they will not. But if they do, they could prove quite costly to the economy.” Richmond Fed President Jeffrey Lacker, who votes on the FOMC this year and was the only policy maker to dissent at the last meeting, said QE3 probably won’t do much to boost the labor market. “This is going to have a greater effect on inflation and a minimal impact on jobs,” Lacker said in a Sept. 15 interview on National Public Radio. Similarly, Richard Fisher of Dallas, who doesn’t vote on monetary policy this year, opposed the third round of purchases, which he said led to an increase in market expectations for higher inflation without more job creation. “I do not see an overall argument for letting inflation rise to levels where we might scare the market,” Fisher said in a Bloomberg Radio interview.
• Spanish, Italian Bonds Decline After Demand Drops at Debt Sales. Spanish and Italian government bonds fell as demand declined when the two nations sold debt today amid concern the region’s financial turmoil is worsening. Spain’s securities dropped for the first time in three days as Deputy Prime Minister Soraya Saenz de Santamaria said the country needs to know how much the European Central Bank will spend on debt purchases before it decides whether to ask for a bailout. German two-year notes fell as ECB Governing Council member Ewald Nowotny said he doesn’t see a need to cut interest rates at the moment. “Markets are likely to be looking for any indication of a softening in investor appetite, through lower demand or rising yields,” said Brian Barry, an analyst at Investec Bank Plc in London. Rising yields at Spain’s bill sale “could potentially be an indication of the growing sense of unease felt by investors over the protracted bailout saga.” Spain’s two-year yield climbed 13 basis points, or 0.13 percentage point, to 3.16 percent at 4:19 p.m. London time. The 4.75 percent note due in July 2014 dropped 0.23, or 2.30 euros per 1,000-euro ($1,295) face amount, to 102.775. The 10-year yield increased seven basis points to 5.76 percent.
• Rajoy Defied as Catalan Head Seeking Autonomy Calls Vote. Catalan President Artur Mas called early elections for Nov. 25, defying Spanish Prime Minister Mariano Rajoy in a campaign that will focus attention on the potential for Spain’s biggest region to declare independence. Mas made his announcement to lawmakers in Barcelona five days after Rajoy rejected his bid for greater control of the region’s tax revenue. The Catalan leader, who has sought a 5 billion-euro ($6.5 billion) bailout from Madrid, said last week Rajoy lacked the political courage to forge a deal. The challenge to Rajoy adds to the premier’s woes as he fights to avoid a European bailout that imposes austerity on Spaniards already protesting against the deepest budget cuts on record. Catalonia, where 1.5 million people demonstrated for independence in the capital Barcelona this month, accounts for a fifth of the Spanish economy and is home to some of the nation’s largest companies.
• Irish Taxpayers Fund Army Bras to Avoid Greek-Style Protests. Paying for military bras, shoes for civil servants and bonuses for handling animal carcasses is the price of industrial peace in Ireland. After reviewing more than 1,100 special allowances for state workers, the government last week abolished one: a travel expense. Among those it kept are the 27.40 euros ($35.80) a year for female soldiers to buy underwear and night attire and 47.92 euros a week for attendants to ensure post is delivered to staff at the Chief State Solicitor’s Office before 9.15 a.m. “The failure to implement further planned cuts in expenditure is a worrying development,” said Conall Mac Coille, an economist at Dublin-based Davy, the largest Irish securities firm. “It is going to be very difficult for the government to pursue the needed cuts without touching pay and services.”
• Iron-Ore Supply to Seaborne Market Seen Rising 15% by Citigroup. Supply of iron ore into the seaborne market will rise 15% in the current half from 2012's first six months as Vale SA and Rio Tinto Group increase production, said Citigroup Inc. Supply will climb to 470 million tons in the first half and 440 million tons a year earlier, Citi Research said. Most of the projected increase stems from a rebound in output at Rio Tinto's mines in Western Australia and expansions by Vale at Carajas and the South Eastern Systems, Citi Research said.
• Young Adults Flock to Parents' Homes Amid Economy. The Class of 2008, born during the historic bull market that closed the past century, reached a dubious distinction last year: More than a million of the college graduates have gone back home. The number of 26-year-olds living with parents has jumped almost 46 percent since 2007, according to Census Bureau data compiled by the University of Minnesota Population Center. Last year, the number of 18- to 30-year-olds living with their parents grew to 20.7 million, a 3.9 percent gain from 2010. The figures underscore the difficulty that millions of young people have had in finding jobs and starting careers in the U.S.
• Health-Care Price Rise Poses Challenge for U.S. Overhaul. Medical prices accelerated faster than some projections last year and the number of uninsured is rising, according to data that show the U.S. goal of expanding health care is veering onto a more difficult road. Costs for people with employer-sponsored insurance plans jumped 4.6 percent in 2011, more than the government’s 3.9 percent estimate for the entire health system, the Health Care Cost Institute, which analyzed claims from UnitedHealth Group Inc. (UNH), Aetna Inc. (AET) and Humana Inc. (HUM), said today. A study by the U.S. Centers for Disease Control and Prevention found the number of people without insurance climbed 1.7 percent in the first quarter of 2012. The data pose a challenge for the Obama administration as it carries out the 2010 Affordable Care Act, which promises to expand coverage to 30 million Americans starting in 2014 and trim health costs. The CDC reported that 47.3 million people lacked insurance, and the health institute said hospitals and doctors raised prices at a clip that outstripped demand. “If you don’t bend the cost curve, ultimately insurance gets more expensive,” said Douglas Holtz-Eakin, the president of the American Action Forum, a Washington-based advocacy group that opposes the health law. “It’s a big problem for the Affordable Care Act.” The overhaul law may be contributing to higher costs, said Martin Gaynor, an economics professor at Carnegie Mellon University and chairman of the Washington-based Health Care Cost Institute.
• Morgan Stanley(MS) Recommends Reducing Junk Bond Holdings. Investors should reduce their holdings of speculative-grade bonds going into the last three months of the year as yields on the notes hover near record lows, according to Morgan Stanley. “Risk/reward for the asset class is less attractive today than at any other point this year,” analysts Adam Richmond and Jason Ng wrote in a report dated today. “The main driver of our downgrade is unattractive total return prospects going forward.” 
• Consumer Confidence in U.S. Rises.

Wall St. Journal:

• EU Lawmakers Set to Back New Derivatives Rules. European lawmakers are set to agree on new rules Wednesday to tighten regulation over opaque derivatives markets, force delays on high frequency trading and restrict the commissions brokers can accept for selling financial products. The rules, called the Markets in Financial Instruments Directive, aim to create a regulated trading environment for over-the counter derivatives and other off-market financial products. They are part of an effort by nations of the Group of 20 large economies to bring transparency to "dark pools" where financial instruments are traded away from public exchanges.  
• As Manufacturers’ Costs Tick Up, Hiring Still Muted.

MarketWatch.com: 

• The devil in the housing report details. Home prices are rising, experts say, but not as much as one report may suggest. And to maintain a realistic view of any real-estate recovery, it may be wise to err on the conservative side.

CNBC: 

• What Caterpillar's Profit Warning Means for Global Growth. Caterpillar's warning about its profits three years from now sends an ominous message about the global economy — that the current slowdown is likely to be long-term regardless of what policy makers do now.

Zero Hedge:

• What Do European Credit Markets Know That Stocks Don't?
• Why Germany Is Going To Exit The Eurozone.
• Live Spanish Protestcam. 
• Cashin On 'Occupy' Spain.

Business Insider: 

• HUGE Protest Engulfs Parliament In Spain. This image comes from TV station RTVE's live feed.  
• Canadian New Home Sales Plunged 64%. 
• Anyone Wondering Why Google's(GOOG) Stock Is Soaring Should Look At The Cash Flow...

New York Times:

• Spain Recoils as Its Hungry Forage Trash Bins for a Next Meal.
• I.M.F.’s Call for More Cuts Irks Greece.

Reuters: 

• Latam stocks fall as Brazil banks weigh.
• Brazil cuts 2012 revenue forecasts as tax collections slide.

Financial Times:

• Scepticism Grows Over 'QE Infinity'. Among the trading rooms and floors of Connecticut and Mayfair, supposedly sophisticated money managers are raising big questions about QE3 – and whether, this time around, the Fed is not risking more than it can deliver. Such scepticism is not easy to maintain. “When I started out in asset management I was told two rules: the trend is your friend and don’t fight the Fed,” says Luke Ellis, who oversees $19.5bn in hedge fund investments at Man Group’s FRM. “For the first time we now have the Fed fighting the trend.”

Telegraph:

• Be Very Careful, Beloved Spain.
• S&P warns of new eurozone recession. Standard & Poor's has warned that the eurozone economy is unlikely to grow for the next two years.
• Silvio Berlusconi: Mario Monti too 'servile' to Germany. Italy's ex-premier and possible future candidate Silvio Berlusconi criticised his successor Mario Monti for raising taxes in an interview out on Tuesday, accusing him of being "conditioned" by the left.

El Mundo:

• Prime Minister Mariano Rajoy intends to raise pensions by 1% next year. The 1% increase will cost the state EU1.2b.

The Australian:

• Low-doc risks rise in loans scramble. HIGHER-RISK pre-GFC-style lending practices are flooding back with non-bank lenders scrambling for their share in the burgeoning sub-prime lending market. Non-bank major lender Resimac has embarked on a campaign to capitalise on the growing sub-prime sector and is offering low-doc loans to borrowers of up to 90 per cent of the value of a home.

Kyodo News:

• More than 60 Japanese companies including Canon Inc. were told to leave an international trade show that began today in Chengdu, China.

Xinhua:

• China Researcher Sees Slowing 3Q Economic Growth. Zheng Xinli, vice chairman of the China Center for International Economic Exchanges, said that China's economic growth in the 3rd quarter will continue to slow. The "unexpected" impact of the euro debt crisis on China's exports, and liquidity tightening to curb inflation are causes for the slowdown, Zheng says.

Bear Radar

Style Underperformer:

• Mid-Cap Value -.80%

Sector Underperformer:

• 1) Education -3.20% 2) Steel -2.20% 3) Alt Energy -1.80%
  

Stocks Falling on Unusual Volume:

• RMBS, BAS, ATML, KEG, VELT, SEAC, CRAY, VRTX, NMFC, EPD, Z, HR, CQP, FWRD, KORS, TSLA, ASH, MM, FDS, WRLD, CGNX, GWRE, ESI, AVT, DECK, PAYX, RHT, PCRX, RBC, JOY, ASTE, DV, PNNT, SPLS and SPN
  

Stocks With Unusual Put Option Activity:

• 1) MRO 2) Z 3) TSLA 4) SWY 5) MMR
  

Stocks With Most Negative News Mentions:

• 1) NBR 2) ADP 3) TSLA 4) ORCL 5) F
  

Charts:

• ETFs Falling on Unusual Volume
• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer:

• Small-Cap Growth +.44%

Sector Outperformers:

• 1) Gaming +1.30% 2) Gold & Silver +1.04% 3) Drugs +.89%
  

Stocks Rising on Unusual Volume:

• WWWW, QCOR, DDD and LVS

Stocks With Unusual Call Option Activity:

• 1) ATVI 2) WAG 3) ABT 4) HNR 5) NIHD
  

Stocks With Most Positive News Mentions:

• 1) JEC 2) NWSA 3) SWY 4) UDRL 5) HPQ

Charts:

• ETFs Rising on Unusual Volume 
• Stocks Rising on Unusual Volume