- Government Heads Toward Shutdown (WSJ), First U.S. Shutdown in 17 Years at Midnight Seen Probable (BBG), Congress in game of chicken (RTRS)
- Italian Premier Pursues Last-Ditch Rescue of Government (WSJ)
- Election risk rattles Italian government bonds (RTRS)
- Obama and Ryan Stay on Sidelines on Budget (WSJ)
- Volcker Rule Costs Tallied as U.S. Regulators Press Deadline (BBG)
- Faltering Chinese Factory Growth Adds to Rebound Fears (FT)
- Health Law Hits Late Snags as Rollout Approaches (WSJ)
- Apple Overtakes Coca-Cola as Most Valuable Brand, Study Finds (BBG)
- Euro-Area September Inflation Slows More Than Forecast on Energy (BBG) - Puting will fix that shortly
Dispassionate overview of the key factors shaping the investment climate in the week ahead.
- House GOP banking on Plan C (Politico)
- Pimco shook hands with the Fed - and made a killing (Reuters)
- BlackBerry's Torsten Heins has a $55 Million golden parachute (Reuters)
- JPMorgan Urged to Pay More in Mortgage Deal (NYT)
- Soros Adviser Turned Lawmaker Sees Crisis by 2020 (BBG)
- U.N. Members Agree on Syria Disarmament (WSJ)
- U.N. Says Humans Are 'Extremely Likely' Behind Global Warming (WSJ)
- The non-falsifiable threats emerge: Shutdown Would Shave Fourth-Quarter U.S. Growth as Much as 1.4% (BBG)
- Swaps Rules Worry Industry: Coming Regulations Have Market Players Concerned About Possible Disruption (WSJ)
- JPMorgan eyes $4bn ‘pay for peace’ deal (FT)
- Prosecutors Pursue Big SAC Settlement (WSJ) - in the US if you are rich enough, no crime is bad enough
- Cruz's Defiant Stand Is Also a Lonely One (WSJ); Texas senator speaks for more than 14 hours (FT)
- Iran Applies Brakes to U.S. Mideast Plans (WSJ)
- Americans in Poll Doubt Economy Rebound in Defiance of Forecasts (BBG)
- Big Banks Cut Basel III Shortfall by $112 Billion at End of 2012 (BBG) - the equivalent of 10 bridges to the Kalahari desert
- Obama’s Jabs at Russia on Syria Shows Diplomacy Tensions (BBG)
- ICAP Staff Face Criminal Charges Tied to Libor (WSJ)
- Alibaba Is Said to Shift Target for I.P.O. to U.S. From Hong Kong (NYT)
- Home gold rush is over (Reuters)
- Conoco in landmark Alaska drone flight (FT)
Goldman Sachs is once again predicting that gold will fall, setting a new near-term target of $1,050. Never mind the schizophrenic gene that would be required to follow the constantly fluctuating predictions of all these big banks. Sure, the too-big-to-fails can move markets - but they say things that are good for them, not us. As an example, while Goldman Sachs was telling clients and the public to sell gold in the second quarter, they bought 3.7 million shares of GLD and became the ETF's 7th largest holder. When we visited China, guess who no one was talking about? Goldman Sachs. Since January 1, gold ETF holdings have fallen by roughly a quarter (26%, according to GFMS). But Chinese housewives aren't refraining from buying and certainly aren’t selling...
- Iran Icebreaker Set at U.N. (WSJ)
- Chrysler Feud Triggers IPO Filing (WSJ)
- JPMorgan Chase, 12 More Banks Said to Be Sued Over Libor (BBG)
- Regulator sues Morgan Stanley, eight others over faulty securities (Reuters)
- Monte Paschi Seen Boosting Cost Goals to Meet EU Demands (BBG)
- Here we go again - "not enough funds": CFTC chair Gary Gensler warns on fund cuts to police derivatives (FT)
- Congress Fuels Private Jails Detaining 34,000 Immigrants (BBG)
- KKR, Sycamore looking to buy Jones Group this week (NYPost) - take with lots of salt
- Fiat rethinks alliance with Chrysler after IPO filing (Reuters)
- Young Invincibles Caught in Crossfire Over Obamacare Cost (BBG)
- Mayfair Office Squeeze Spawns New London Real Estate Hubs (BBG)
A Day In The Life Of Edward Snowden: Under Guard, Secret Address, Learning Russian, And Heavily DisguisedSubmitted by Tyler Durden on 09/23/2013 12:07 -0500
If Obama's intention with the fast and furious series of geopolitical and domestic distractions over the past three months was to sideline Edward Snowden's revelations of the biggest spying scandal since Nixon, he appears to have largely succeeded: not only has America become largely numb to every successive iteration of shockers emerging from the most important whistleblowing episode in recent US history (and in fact can't wait to get even more in debt to purchase shiny, faux-gold fingerprint scanners), but the person behind these revelations, the 30 year old Snowden himself, has largely faded into the collective subconscious. So what is the Russian asylum-seeker doing now that the fruits of his labor has been largely exposed and the US public is already eager for the next big watercooler scandal, popcorn in hand? As AFP reports, it is all but life as usual for the whistleblower: "US intelligence leaker Edward Snowden is living under guard at a secret address in Russia and sometimes emerges in disguise, although he remains in such danger that even a family visit could endanger his security, his lawyer said Monday."
UPDATE: AAPL +5.7% on revised guidance
Despite concerns about supply (and 'change') the lines we saw on Friday and the disappointments in the UK have been dismissed by the latest Apple press release as opening weekend iPhone sales top their record at 9 million sales (compared with the 5 million sold at iPhone 5 launch and 6-7mm units expectations).
APPLE SAYS OVER 200M IOS DEVICES RUNNING IOS 7
APPLE 9M NEW IPHONE 5S AND IPHONE 5C MODELS SOLD IN 3 DAYS
APPLE SAYS OVER 11M UNIQUE LISTENERS USED ITUNES RADIO
APPLE SEES 4Q REV. NEAR HIGH END OF $34B-$37B, EST. $36.11B
The share price was up over 4.5% from Friday's sub-50DMA close in pre-market trading; but is fading back now.
The German elections came and went, with Merkel initially said to have an absolute majority, but in the end being forced to design a Grand Coalition. Still, the punditry has been tripping over each other desperate to make that result (or any other result) positive for Europe , which despite now paving the way for policy continuity, together with the latest round of less than impressive Eurozone PMIs (following the strongest China HSBC PMI in 6 months) failed to inspire appetite for risk in Europe this morning where stocks have traded mixed. What is amusing is that everyone expected, the second Merkel gets reelected things in Europe would start going pump in the night - sure enough, the Italian FTSE-MIB is underperforming in early trade amid reports that Italy's economy minister Saccomanni threatened to step down if the country does not stick to its pledges it made to the European Commission. However to a certain degree, the negative sentiment towards Italy was offset by €4.8bln of coupon payments and €24.1bln of redemptions from Italy which is eligible for reinvestment this week. With a second Greek 2-day strike in one week scheduled for Tuesday and Wednesday, look for Europe's catalytic event to unclog, now that the German political picture is set, culminating with the 3rd (and 4th) Greek bailouts and probably more: after all Europe now needs a lower EURUSD (recall Adidas' warning), and that usually means a localized crisis.
As Typhoon Usagi bears down on Hong Kong, the Securities and Derivatives Exchange that the mornig sessions of both markets will be delayed. If the Typhoon remains a Level 8 of above past 9am (HK time), the morning session will be cancelled and all trading cancelled if the Usagi holds Level 8 or above beyond midday local time. The Hong Kong Obersvatory currently has the Typhoon a Level 8.
Hong Kong Braces For Worst Storm In 34 Years As Typhoon Usagi Approaches, "Astronomical" Storm Surge ForecastSubmitted by Tyler Durden on 09/22/2013 09:19 -0500
One year ago New York had Superstorm Sandy. Now, with Typhoon Usagi closing in, Hong Kong is bracing for impact as the strongest storm in 34 years is set to hit the financial hub head on. As Severe Typhoon Usagi bore down on the city, the Hong Kong observatory issued a "severe threat'' warning. It hoisted the No 3 typhoon signal at 11.40pm yesterday and warned people in low-lying areas to take special precautions. “The water level may rise and cause flooding in the evening,” said Sandy Song Man-kuen, the observatory’s senior scientific officer. This happened as the Observatory issued a No 8 storm signal for Usagi. The Hong Kong Observatory said that Usagi would make landfall to the east of Hong Kong and will skirt the territory at around 100km or less to the north later tonight and early tomorrow morning. Observatory senior scientific officer Mok Hing-yim warned of "astronomical" high tides and a storm surge. Mok said that if the typhoon signal No 8 was issued, Usagi would be the strongest typhoon to hit Hong Kong since Typhoon Hope in 1979, which killed 12 people and injured 260.
It has been a quiet start to Quadruple Witching Friday (expiration of stock index futures, stock index options, stock options and single stock futures) but expect that to change, as erratic price action is a recurring hallmark of Quad Witches, especially with persistent low volume and markets that tend to shut down for no reason. So far stocks have traded steady in Europe this morning, credit spreads widened and Bunds traded in positive territory as market participants positioned for the much-anticipated German elections which are to be held on Sunday, with exit polls to be made available after the close of polling stations at 6pm local time. Ahead of that, and as reported here previously, Germany’s AfD Eurosceptic party could win enough support in the general election on Sunday to gain seats in the German Bundestag, an opinion poll published for a leading newspaper has forecast for the first time. Basic materials and utilities underperformed in Europe, with RWE trading sharply lower in Germany after the company announced plans to cut its dividend by half (and with the Adidas fiasco yesterday, one wonders just how bad things in Europe really are).
- Bernanke Resets Policy by Doing Nothing as Markets Soar (BBG)
- Stocks Jump to Five-Year High as Metals Rally on Fed (BBG)
- Centre-left bigwig says hard to stay allied with Berlusconi (ANSA)
- J.P. Morgan 'Whale' Fine Put at Over $900 Million (WSJ)
- Banks’ $10 Billion Sweet Spot Sets Off Buying Spree for Lenders (BBG)
- Time to taper? Not if you look at bank loans (Reuters)
- Mortgage Lending Reaches 5-Year High (WSJ) ... and then plunges as Fed gives "all clear" for a few months
- Yellen Chances Grow as Obama Aides Test Senate Support (BBG)
- Summers Quit Fed Quest After Democrats Spurned Obama Favorite (BBG)
- Geithner Still Not Interested in Fed Chair Slot (WSJ)
- Gross’s Trade Sours as Bonds Lose Faith in Fed Guidance (BBG)
- Bob Diamond calls for bank rules shake-up (FT)
- Russia says may be time to force Assad's foes to talk peace (Reuters)
- Iran Dials Up Syria Presence (WSJ)
- Kerry Seeks to Sell Syria Deal (WSJ)
- Shutdown of Japan’s Last Nuclear Reactor Raises Power Concerns (BBG)
- Emerging Stocks Rise to 3-Month High as Bonds Gain on Fed (BBG)
- Bernanke’s Maradona swerve hits bonds (FT)
While the only market moving event of note had nothing to do with the economy (as usual), and everything to do with the Fed's potential propensity to print even more dollars and inject even more reserves into the stock market (now that Summers the wrongly perceived "hawk" is out) some other notable events did take place in the Monday trading session. Of note: while India's August inflation soared far higher than the expected 5.7%, rising to 6.1% from 5.79% (making life for the RBI even more miserable, as it is fighting inflation on one hand, and a lack of liquidity on the other), in Europe inflation decelerated to 1.3% from 1.6% in July driven by a drop in energy prices, while core inflation was a tiny 1.1%. In a continent with record negative loan growth this is to be expected. Additionally, as also reported, Merkel appears to be positioned stronger ahead of this weekend's Federal election following stronger results for her CDU/CSU, if weaker for her broader coalition. In Libya, oil protesters said they would continue stoppages at oil terminals until their demands are met in yet another startling outcome for US foreign intervention. Finally, some headline on Syria noted a Kerry statement "will not tolerate avoidance of a Syria deal", while Lavrov observed that it may be time to "force Syria opposition to peace talks." And one quote of the day so far: "Don't want market to become excessively exuberant" from the ECB's Mersch- just modestly so?