Volkswagen

So far today's trading session has been a repeat of what happened overnight on Monday, when following a weak start on even more weak Chinese data, US equities soared on the first trading day of the month continuing their blistering surge since that dreadful September payrolls report, which as we showed was mostly catalyzed by a near record bout of short's being squeezed and covering, which accelerated just as the S&P broke the 2100 level.

• Baffle with BS: German Bonds Decline Along With Peers as Draghi Cools QE Talk (BBG)
• And yet... ECB's Nowotny says low inflation forces ECB to act (Reuters)
• Stocks fall on China data, but stronger euro zone lifts gloom (Reuters)
• Global factories struggle as stimulus fails to spur (Reuters)
• Russian airline rules out technical fault, pilot error in Egypt crash (Reuters)
• Turkey returns to single-party rule in boost for Erdogan (Reuters)

• World stocks on course for best month in four years (Reuters)
• Global Stocks Up Amid Stimulus Hopes (WSJ)
• BOJ Refrains From Adding Stimulus Even as Inflation, Growth Wane (BBG)
• U.S. Avoids Debt Default as Congress Passes Fiscal Plan (BBG)
• China naval chief says minor incident could spark war in South China Sea (Reuters)
• Exclusive Club: No High-Frequency Traders Allowed at Luminex (WSJ)

• Fed puts December rate hike firmly on the agenda (Reuters)
• Charting the Markets: A More Hawkish Fed Rattles Investors (BBG)
• China to modernize and improve fiscal and tax systems (Reuters)
• Deutsche Bank to Cut 35,000 Jobs in Overhaul (WSJ)
• Deutsche Bank Said to Near $200 Million Sanctions Settlement (BBG)
• Barclays profits drop as it abandons cost-cutting targets (FT)

Norway's $860 billion sovereign wealth fund (tasked with managing the country's vast oil wealth) just had its worst quarter in 4 years and its first back-to-back quarterly loss since 2009 after an array of EM bets went awry. Meanwhile, the government is set to start making withdraws from the fund as slumping crude prices have effectively reduced inflows to zero. 

• Global shares rise as Riksbank helps ease Fed wait (Reuters)
• Asian Stocks Retreat Before Fed as Material Shares Lead Losses (BBG)
• For Fed, a Rates Puzzle Looms (WSJ)
• What the Superforecasters Say About When the Fed Will Lift Rates (BBG)
• U.S. Looks at Proposals to Step Up Fight Against Islamic State (WSJ)
• China Steel Head Says Demand Slumping at Unprecedented Speed (BBG)
• VW slumps to first quarterly loss in at least 15 years (Reuters)

We would say today's main event is the culmination of the Fed's two-day meeting and the announcement slated for 2 pm this afternoon, however with the 90 economists polled by Bloomberg all expecting no rate hike, today's Fed decision also happens to be the least anticipated in years (which may be just the time for the Fed to prove it is not driven by market considerations and shock everybody, alas that will not happen). And considering how bad the economic data has gone in recent months, not to mention the recent easing, hints of easing, and outright return to currency war by other banks, the Fed is once again trapped and may not be able to hike in December or perhaps ever, now that the USD is again surging not due to its actions but due to what other central banks are doing.

• Hilsenrath - The Fed Strives for a Clear Signal on Interest Rates (WSJ)
• Tentative Budget Deal Reached, Raising Debt Limit (WSJ)
• China Calls U.S. Challenge Over Island Threat to Regional Peace (BBG)
• UK economy slows more than expected in third quarter (Reuters)
• In China’s Alleyways, Underground Banks Move Money (WSJ)
• Inside the Secretive Circle That Rules a $14 Trillion Market (BBG)
• A Frustrated Koch Brother Decides It’s Time to ‘Spout Off’ (WSJ)

Germany's Suddeutsche Zeitung reports that just two (or is it three, this past summer is one big blur) months after Greece voted through its third bailout, one which will raise its debt/GDP to over 200% on a fleeting promise that someone, somewhere just may grant Greece a debt extension (which will do absolutely nothing about the nominal amount of debt), its creditors have already grown tired with the game and are refusing to pay the next Greek loan tranche of €2 billion.

After earlier in the year exposing "the greatest shorting opportunity since 2007-2009" and trading it profitably through September with "front row seats to an imminent market shock," Billionaire Crispin Odey's flagshipfund has suffered recently. As Bloomberg reports, the fund plunged 16.8% in the first 16 days of October, after the fund profited in August and September from Odey’s negative view of the Chinese economy. Odey believes that the only way economies will be able to work their way through the next downturn is by writing off capacity. Therefore, with credit tightening as well, according to Odey, it’s a good time to be short...

• European shares slip as easing expectations fade (Reuters)
• Valeant and Pharmacy More Intertwined Than Thought (WSJ)
• The Pawn Isolated: Valeant, Philidor and the Annals of Fraud (WSJ)
• Strongest Afghan Quake Since 1949 Triggers Search for Survivors (BBG)
• EU Agrees To Tighten Border Controls And Slow Migrant Arrival (AP)
• Volkswagen Suspends More Employees (WSJ)
• Volkswagen Loses Global Sales Lead to Toyota Amid Diesel Scandal (BBG)

In our Chinese stock market wrap following Friday's unexpected rate cut, which saw the Shanghai Composite storm out of the gate, we said that "we would not be surprised to see China's stocks sliding back into the red very shortly as "sell the news" concerns return, and as the increasingly more addicted "markets" demand even more liquidity from central banks just to stay unchanged, let alone rise to new all time highs." Sure enough, with just minutes to go before the close, the SHCOMP wiped out all its daily gains and was set for a red close had it not been for the "national team" miraculous last minute intervention which was inevitable after Friday's PBOC rate cut, and which lifted the composite 0.5% into the green as the euphoria was rapidly evaporating.

• China's central bank cuts rates for sixth time since November (Reuters)
• Global stocks hit two-month high on dovish Draghi message (Reuters)
• $6.5 Billion in Energy Writedowns and We're Just Getting Started (BBG)
• Alphabet, formerly Google, sets share buyback, shares jump (Reuters)
• Hurricane Patricia, Stronger Than Katrina, Nears Mexico (BBG)
• TVA Cleared to Start First New U.S. Nuclear Power Plant in Nearly 20 Years (WSJ)

Yesterday morning, when previewing the day's tumultuous events, we said that "Futures Are Firm On Hope Draghi Will Give Green Light To BTFD." And boy did Draghi give a green light, that and then some, when his press conference unleashed one of the biggest one-day US equity rallies in 2015. This morning it has been more of the same, with global market momentum on the heels of Draghi's confirmation that Europe's economy is again backsliding (it's a good thing, if only for stocks), leading to momentum for US equity futures, which together with soaring tech/cloud, earnings if no other, are on their way to take out recent all time highs.