US Manufacturing PMI Rises To Highest In 12 Months

When 2016 started off poorly for the US manufacturing sector as a result of the pounding in the E&P sector, with rising concerns about a recessionary impulse among US manufacturing industries, the latest Markit manufacturing report for October has allayed much of the slowdown concerns with a headline print of 53.2, higher than the 51.5 expected, and up 1.7 points from September - the highest print since October of 2015.

VIX Smashed To 12 Handle Drags Stocks Near 'Unch' For October, Silver Jumps, Crude Dumps

VIX has now fallen for 6 of the last 7 days (from an 18 handle to a 12 handle) and until today's mega-merger excitement, stocks went nowhere. Today's gap up open lifts S&P and Dow back near unchanged on the month. Gold and Silver are spiking as crude slides back near $50. Treasury yields are modestly higher (and the curve steeper) on the day.

Key Events In The Coming Week

Looking at the week ahead, the US election enters the home stretch and politics will likely dominate the headlines, especially the closer races in Congress. Despite data being overshadowed by politics, there are some key US releases coming up, with the first estimate of Q3 GDP, the employment cost index and durable goods the main focus.

Goldman Cuts S&P500 Earnings Forecasts For The Next Three Years

"We cut our S&P 500 earnings estimates for each of the next several years. Our revised operating EPS forecasts now equal $105 (2016), $116 (2017), and $122 (2018) reflecting annual growth of 5%, 10%, and 5%, respectively. Low interest rates and peaking margins constrain profit growth in Information Technology, Financials, and Telecom and drive the reduction in our index-level EPS forecast." - Goldman Sachs

Frontrunning: October 24

  • The CEO Behind AT&T’s Huge Time Warner Deal (BBG)
  • AT&T-Time Warner deal sparks calls for scrutiny in Washington (Reuters)
  • Wall Street’s $40 Billion AT&T Pledge Offers Fees and Risks (BBG)
  • Bernie Sanders: Obama Administration “Should Kill” The AT&T-Time Warner Deal (Deadline)
  • Oil prices under pressure as Iraq resists joining output cut (Reuters)

Watergate's Bob Woodward: "Clinton Foundation Is Corrupt, It's A Scandal"

"Yes, it's corrupt. It's a scandal. And she didn't answer your question at all.... the mixing of speech fees, the Clinton Foundation, and actions by the State Department, which she ran, are all intertwined and it's corrupt. You know, I mean, you can't just say it's unsavory. But there's no formal investigation going on now, and there are outs that they have."

Biggest US Discount Brokerage TD Ameritrade Buys Scottrade For $4 Billion

The previously noted surge in Monday merger announcements, which seek to take advantage of still cheap credit before yields rise, got its latest entrant moments ago when discount brokerage TD Ameritrade agreed to acquire peer Scottrade in a $4 billion cash and stock transaction.

Global Stocks Jump On Mega Merger Monday, Buoyed By Earnings, PMIs, Politics

Global stocks jumped around the globe, with Europe's Stoxx 600 and US equity futures rising more than 0.5% on a surge in merger announcements over the weekend including the $85 billion mega takeout of AT&T for Time Warner, the $6.4 billion acquisition of B/E Aerospace by Rockwell Collins, the $2.7 billion deal targeting Genworth by China Oceanwide and the just announced $4 billion purchase of Scotttrade by Ameritrade.

Renzi's Gamble Is Even Bigger Than Most Think

Should the referendum pass, but Renzi lose the next election, a eurosceptic party will have control over Italy. Renzi’s gamble is that he will win the referendum, consolidate power ahead of the next election, and stave off election of M5S. That’s quite the gamble given how support for Renzi has collapsed.

NATO Continues To Prepare For War With Russia

One provocation follows another against the endless drumbeat of Western media reports about “Russian aggression”. The war preparations greatly reduce European security and the chances for revival of constructive dialogue between Russia and NATO – something Russia has been calling for so many years. Instead, the bloc is doing its best to provoke an arms race with unpredictable results.

Life After 11/9 - Governing The Ungovernable

Europe truly is a continent full of powder kegs. Even before you add refugees. However, the US and UK are first in line when it comes to the risk of being rendered ungovernable. Partly simply because of timing, and partly because the differences between various ‘groups’ and movements are as pronounced as they are already today. Both countries are running out of carpet to sweep their dirt under.

The Chinese Buyers Are Back: China Oceanwide Acquires Genworth For $2.7 Billion

China Oceanwide Holdings, a Chinese financial conglomerate, agreed to buy US insurer Genworth Financial for $2.7 billion in cash, a 4% premium to closing, and pledging to help the U.S. firm manage its debt and strengthen life insurance units after it was hurt by higher-than-expected losses tied to long-term care coverage.