Yields for Italy, Spain, France, and Germany …
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Leading Indicators and Philly Fed Beat Expectations
Leading indicators came in up 0.6% vs expectations of 0.2%
Philly Fed came in at 0.5% vs expectations of 0.1%
Comments »Yields Continue to Fall in Spain as EU Leaders Prepare to Meet
“Spanish government bonds rose for a third day after the nation sold more than its maximum target at an auction and as European Union leaders gathered for a two-day summit in Brussels.
Spain’s 10-year yields dropped to the lowest level since April as German Chancellor Angela Merkel told lawmakers in Berlin that stability was taking hold after three years of crisis in the euro area. Spanish securities surged yesterday after Moody’s Investors Service said this week it would keep the country’s credit rating at investment grade. France auctioned notes and inflation-linked bonds today and Ireland sold bills.
“The Spanish auction went as well as could be expected,” said Elisabeth Afseth, a fixed-income analyst at Investec Bank Plc in London. “Yields are a bit lower and the volumes they managed to do on the 10-year was a positive. Some positive comments out of the European meetings today should also offer some support.”
Comments »Wen Jiabao Says GDP Data Shows Stabilization in Chinese Economy
“China’s stocks rose, driving the benchmark index to a five-week high, after Premier Wen Jiabao said the economy has started to stabilize and industrial production and retail sales data beat estimates.”
Comments »Asia Has a Modest Rally, Europe is Mixed, and U.S. Futures are Down Slightly
Global Markets Rally on Improved Crisis Outlook, U.S. Futures are Flat
Market Update
Equities are in rally mode on the notion Spain is close to a bailout. Good data around the planet has also helped to get the risk on trade going.
Meanwhile the finance minister of Germany had some comments that may get some people excited: ”
“German Finance Minister Wolfgang Schaeuble has called ahead of an EU summit for a great leap forward in European integration, urging the creation of a new commissioner with power over budgets and reform of European Parliament decision-making.
Such a reform would accelerate the trend towards a two-speedEurope whose inner core would be the euro zone, spurred towardscloser union by its three-year-old sovereign debt crisis.”
All in all we had some decent earnings reports this morning and investors have thrown caution to the wind.
Comments »A Second Month of Better German Confidence Helps to Lift European Equities
“European stocks had their first back-to-back gains in a month, commodities rose and the euro strengthened as German investor confidence topped forecasts. The cost of default insurance on German debt fell to a 15-month low.”
Comments »Global Markets Gap Up on a FT Article That Spain is Near in Asking for a Bailout
“Markets are on a big tear with Spain leading the way, so it’s easy to surmise that enthusiasm over a possible Spain bailout is what’s got investors excited.
And there’s an article to support exactly that.
Miles Johnson at FT reports that Spain is getting ready to bite the bullet.
A senior official within the Spanish ministry of economy said Spain did not require any money from the European Stability Mechanism, the eurozone’s state rescue fund, but would be comfortable making a request for a credit line only in order to satisfy the conditions of the ECB to begin buying bonds.”
Comments »Global Markets Rally, U.S. Futures Display Tame Upside
U.S. Equities Rise on Retail Sales and Earnings, Commodities Get the Homo Hammer
“U.S. stocks rose, after paring an early rally in the Standard & Poor’s 500 Index (SPX), as better-than- estimated retail sales and earnings from Citigroup (C) Inc. overshadowed a slump in commodity prices and Apple Inc. (AAPL)
Citigroup soared 3.9 percent as results benefited from a tax benefit and a surge in bond-trading revenue. Texas Instruments Inc. (TXN) rose 2.4 percent on a report Amazon.com Inc. (AMZN) may buy its mobile chip unit. Valero Energy Corp. (VLO) and Occidental Petroleum Corp. (OXY) dropped as much as 1.1 percent as oil tumbled. Apple lost 0.1 percent after rising as much as 0.8 percent earlier.
The S&P 500 added 0.2 percent to 1,431.11 at 11:18 a.m. in New York. The Dow Jones Industrial Average (INDU) rose 23.20 points, or 0.2 percent, to 13,352.05. Trading in S&P 500 companies was 11 percent above the 30-day average at this time of day.
“The direction of the economic data is positive, but we’re moving at a very slow pace and the market is very fragile to external shock,” Dan Veru, who oversees $3.5 billion as chief investment officer at Palisade Capital Management LLC in Fort Lee, New Jersey, said in a phone interview. “The big question regarding earnings is whether expectations have come down enough so that companies can beat guidance.”
Stocks rose as the Commerce Department said retail sales rose 1.1 in September following a revised 1.2 percent increase in August that was the biggest since October 2010 and larger than previously reported. The median forecast of 77 economists surveyed by Bloomberg called for a 0.8 percent rise.”
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M&A Activity Helps to Lift European Stocks
“European (SXXP) stocks climbed amid an increase in mergers-and-acquisition activity and before a U.S. report that may show retail sales gained for a third month. U.S. index futures also rose, while Asian shares were little changed.
Orkla ASA (ORK) jumped 5.6 percent after agreeing to combine units with Norsk Hydro ASA.Douglas Holding AG (DOU) jumped 7.8 percent after Advent International Corp. made a 1.5 billion euros ($1.9 billion) takeover offer for the retailer. Vivendi SA (VIV) gained 2.9 percent on a report the company is in talks to merge its mobile-phone unit SFR with Numericable.”
Comments »Export Growth in China Grew More Than Expected, Up YoY
“China’s exports and money supply grew more than estimated in September, signaling that the world’s second-biggest economy may be stabilizing after a slowdown that began in the first quarter of 2011.
Overseas shipments increased 9.9 percent from a year earlier, the customs administration said Oct. 13 in Beijing. That was more than the 5.5 percent median estimate in a Bloomberg News survey of economists. M2 money supply gained 14.8 percent, the fastest pace since June 2011, a central bank report showed the same day.”
Comments »Emerging Markets Falls After Talks Reveal Confusion Over How to Boost Economic Growth and Deal With Sovereign Debt Problems
“Emerging-market stocks fell for the first time in three days as global policy makers clashed on ways to boost economic growth and Chinese companies from ZTE Corp. (000063) to Yunnan Copper (000878) Industry Co. predicted losses.
ZTE, China’s second-largest maker of telephone equipment, dropped the most in three months in Hong Kong. Yunnan Copper sank 2.4 percent. Mol Nyrt., Hungary’s largest refiner, fell to a two-week low on a government proposal to take over strategic gas-storage facilities. OAO Raspadskaya slid for a second day as Deutsche Bank AG downgraded shares of Russia’s coal producer.
The MSCI Emerging Markets Index (MXEF) slid 0.2 percent to 994.97 as of 12:30 p.m. in London. Finance chiefs at the International Monetary Fund meeting left Tokyo over the weekend at odds, with South Korea’s central bank chief urging Asia to add stimulus as Russia and Brazil called on rich nations to fix their own challenges. At stake is a world economy Bank of Israel Governor Stanley Fischer calls “awfully close” to recession.”
Comments »Retail Sales: Prior 0.9%, Market Expects 0.7, Actual 1.1%
Inflation Hits a Ten Month High in India, Cools in China
“Indian inflation accelerated to a 10-month high in September after an increase in diesel prices, limiting room for an interest-rate cut to revive the economy.
The wholesale-price index rose 7.81 percent from a year earlier, after climbing 7.55 percent in August, the Commerce Ministry said in a statement in New Delhi today. The median of 35 estimates in a Bloomberg News survey was 7.7 percent.”
“China’s inflation was close to the slowest pace in two years in September, giving the government room to ease policies should the economy deteriorate.
Consumer prices rose 1.9 percent from a year earlier while the producer-price index dropped 3.6 percent, the National Bureau of Statistics said on its website today. China’s imports increased 2.4 percent from a year earlier while overseas shipments climbed 9.9 percent, the customs administration said on Oct. 13.”
Comments »Global Markets Pare Early Losses, U.S. Futures Look to Higher Ground
Warren Buffets’s Favorite Indicator Continues to Weaken
“Rail traffic trends continue to weaken as this week’s intermodal traffic report came in at 3.8% year over year growth. This is up slightly from last week’s reading of 2.5%, but brings the 3 month moving average
down to 3.8% from 4%. I continue to see this as being consistent with an economy that is growing, but only marginally.”
Global Markets Trade Unch to Down a Fraction, U.S. Futures Follow Suit
A Look at Short Interest in U.S. Equities
INTC, AMD, QCOM, ARMH, MU, SNDK, BRCM, MRVL, NVDA, TXN, AMAT, SMH
BHI, BP, CHK, CVX, COP, EPD, XOM, KMI, NOV, PSX, SLB, RIG, VLO
ALXN, AMGN, ARNA, BIIB, CELG, DNDN, GILD, ILMN, ONXX, PCYC, REGN, VRTX, VVUS, IBB
CSIQ, FSLR, GTAT, WFR, SPWR, JASO, LDK, STP, TSL, YGE
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