Tag: finance

Going into last night’s debate Trump’s candidacy had all but been declared officially dead by the mainstream media as well as many politicians in his own party.  But, with 5 little words, “because you’d be in jail“, Trump managed to shift the media cycle to the debate performance and away from his “lewd comments” made 11 years ago. 

Trump came into the debate with nothing to lose and, as such, was aggressive throughout the night with numerous sarcastic interruptions of Hillary and the moderators.  You could say that the “let Trump be Trump” strategy was back in full force and it was effective.  As The Hill pointed out, the prime exchange that drew the most reaction from viewers came when Trump promised to seek a special prosecutor, if he were elected, to probe Clinton’s use of a private email server while secretary of State.

Clinton responded to that comment by calling into question Trump’s temperament saying it’s “awfully good that someone with the temperament of Donald Trump is not in charge of the law in our country.” 

Unfortunately for Hillary, that turned out to be a huge mistake because it teed up Trump’s “because you’d be in jail” retort which is the line that most people will be talking about today.

 

Going into the debate, numerous Republican lawmakers had called for Trump to step aside as the party’s nominee after video surfaced of him making “lewd” comments about women.  Trump’s running mate, Indiana Governor Mike Pence, and campaign manager, Kellyanne Conway, even expressed they were “offended” by the video but vowed to stick with Trump.  That said, virtually everyone, regardless of political affiliation, expects to see a sharp erosion of support for Trump in the next round of opinion polls.

There had even been rumors that Kellyanne Conway would quit but she sought to squash that idea as she made the rounds in the spin room after the debate last night.  Asked whether she was staying with the campaign, a smiling Conway said, “Yes. I’m here.”

Not surprisingly, the Trump video dominated the early stages of the debate with Anderson Cooper distorting Trump’s “lewd” comments as evidence that he was admitting to having previously sexually assaulted women.

Trump again expressed regret for his remarks and then pivoted to Bill Clinton’s alleged rape of multiple women, which were in attendance at the debate hall, saying “there has never been anybody in the history of politics in this nation who has been so abusive to women” and contending that Hillary Clinton “attacked those same women.”

Meanwhile, the “independent” moderators decided to debate Trump themselves as evidenced by this exchange between Martha Raddatz and Trump on Syria.

 

And, as usual, the moderators took every opportunity possible to interrupt Trump yet “shockingly” failed to intervene or press Hillary on her email scandal.

The moderators interrupted 41 times during the 90 minute debate. #debate https://t.co/277zJ3TeDa http://pic.twitter.com/sJaLJD7j4r

— FiveThirtyEight (@FiveThirtyEight) October 10, 2016

 

Even Trump took the opportunity to point out the bias during the debate.

 

As the Wall Street Journal pointed out, while Trump did seem more prepared for this debate than the last one, Clinton was still more effective at scoring points with voters on policy initiatives.  

Mrs. Clinton still was the greater master of policy detail, and she delivered her own critique of the so-called Obamacare health law and what she would do to fix the crown jewel of her party’s domestic policy achievements in recent years. She continued to hammer Mr. Trump on disparaging comments he’s made over time about immigrants, Muslims and, especially, women.

 

She delivered a sharp critique, for example, of Mr. Trump’s proposal, made earlier this year, to ban all Muslims from entering the country.

 

“How do you do that?” she asked. “We are a country founded on religious freedom and liberty. How do we do what he has advocated without causing great distress within our own county?”

But the overall voter impact from the debate was best summarized by the following tweet from a Frank Luntz focus group which showed a substantial shift toward Trump after his strong debate performance.

Focus Group: Who are you willing to vote for?

BEFORE #DEBATE
• Hillary: 8
• Trump: 9

AFTER DEBATE
• Hillary: 4
• Trump: 18

— Frank Luntz (@FrankLuntz) October 10, 2016

 

Clearly Trump fought for and won the right to fight for another day as the Republican candidate.  Now the only question is when the “un-unendorsements” will begin.

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From hype to hope to nope. Twitter shares are extending losses (down 12%) and have erased all post-deal-rumor gains…

 

Confirming what we said over the weekend… that a deal is dead.

Citing "people", Bloomberg reports that neither Google, nor Disney or Salesforce are likely to make a bid. On Friday. As confirmation that the process was unwinding, Bloomberg notes that "Twitter had planned to have a board meeting with outside advisers on a sale but canceled, one of the people said."

Why the dramatic shift in sentiment?

 

 

"At Salesforce’s investor conference this past week, several investors talked to Chief Financial Officer Mark Hawkins and other executives about how they weren’t pleased with the idea of a Twitter buyout, according to another person familiar with the matter. They made their feelings known during small huddles near the stage and other areas around the meeting room. High-profile investors also e-mailed Hawkins, who forwarded the messages to his CEO and the board."

As Citi and others explained in their warnings that the sale process would end in tears, buying Twitter would come with a series of complications. Beside the growth issue, the company has grappled with hate speech and harassment on its platform known for 140-character messages. A buyer would have to address heavy employee stock grants, while dealing with a workforce that has already faced a lot of turnover in its leadership.

What options are left for the suddenly unloved social platform?  Among the far less palatable solutions for both the company and its shareholders, are divestitures of assets not central to its business, "people familiar with the matter have said." More from Bloomberg:

 

 

If a buyer doesn’t appear, Twitter will continue to try to appeal to more users through a new strategy that emphasizes live video. The company has been entering partnerships for sports, politics and entertainment content — such as the National Football League’s Thursday night games — that it can stream alongside tweets related to the video. It may give people without Twitter accounts a new way to use the service, while allowing the company to share revenue on the video ads.

So far Twitter's attempts to aggressively grow the business have failed, while complaints from its existing user base to cater to their far more modest demands, remain unheard which is why while Twitter will likely persist as one of the best platforms for news dissemination, its stock price may continue to suffer until it drops low enough that a buyer is ultimately interested.

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The week ahead turns attention squarely towards the US, with the market’s reaction to the second presidential debate on Sunday the key focus during the Columbus Day US session. The other main event will be the September FOMC Minutes, following US data and an employment report that has left many banks comfortable with a December Fed hike. The minutes are likely to reveal a heated debate about the appropriate course of policy, revealing a discussion about the costs and benefits of keeping rates at the current low levels, highlighting the growing divergence of views within the committee.

Key data by region:

In the US focus will be on the market’s reaction to the second presidential debate, FOMC Minutes but also retail sales, import and producer prices and Michigan sentiment. We also hear from various Fed speakers throughout the week, and Chair Yellen gives a keynote speech on Friday.

In the Eurozone, we have a quiet data calendar with IP data and the German ZEW coming up. We do hear from a slew of ECB speakers, with focus on President Draghi over the weekend, especially given the increased taper talk.

In the UK, housing data, construction output and BOE speakers including Governor Carney coming up, while political noise around Brexit and Article 50 likely continues.

In Australia, we receive business and consumer sentiment surveys, housing finance and the RBA’s Financial Stability Review.

In Japan, current account and trade balance, machine orders and PPI on tap.

In Canada, housing starts the only release of note in a quiet week.

Broken down by day:

It’s a quiet start to the week today with just Germany trade data, France business sentiment and the Euro area Sentix investor confidence reading due this morning. There’s no data due in the US with it being Columbus Day. US equity markets are open but bond markets are shut.

Tuesday kicks off in Germany where the October ZEW survey will be released. In the US the NFIB small business optimism reading and labour market conditions index are due out.

We kick off in Japan on Wednesday with the latest machine orders data. Over in Europe we’ll get the final revised September inflation report in France along with the August industrial production print for the Euro area. Over in the US the JOLTS report for August is the sole data release while the September FOMC minutes will then be released in the evening.

Thursday kicks off with the September trade data for China. In Europe we’ll then get the final September inflation report in Germany, while in the US session we’ll get initial jobless claims and the import price index.

It’s a busier end to the week on Friday. In China the CPI and PPI prints for September will be closely watched. In Europe we’ll then get UK construction output and Euro area trade data, while the BoE will also release its latest credit conditions and bank liabilities surveys. Over in the US it’s all eyes on the September retail sales data, while PPI, business inventories and finally the first estimate of the University of Michigan consumer sentiment survey for October will be out.

* * *

Away from the data, the Fedspeakers during the week include Evans and Kashkari on Tuesday, Dudley and George on Wednesday, Harker on Thursday and Kashkari, Rosengren and Fed Chair Yellen on Friday. The latter is due to speak in Boston on the topic of ‘macroeconomic research after the crisis’. Over at the ECB we’ll hear from ECB officials including Visco, Mersch and Coeure this week. Of course the other big focus is on the unofficial commencement of earnings season in the US. Alcoa report prior to the open tomorrow while JP Morgan, Citigroup and Wells Fargo headline the banks reporting on Friday.

Main events over the week summarized:

 

And a focus on just the US courtesy of Goldman Sachs.

Monday, October 10

• Columbus Day holiday observed. SIFMA recommends bond markets remain closed.  
• 09:30 PM Chicago Fed President Evans (FOMC non-voter) speaks: Federal Reserve Bank of Chicago President Charles Evans will give a speech on the economy and policy at an event held by the Australian Business Economists in Sydney, Australia. Last week, President Evans said that he would be fine with the Fed raising rates once this year, adding that the most important issue “is not when the next moves takes place but it’s stating more clearly what the move after that would be based upon.”

Tuesday, October 11

• 06:00 AM NFIB small business optimism index, September (consensus 95.0, last 94.4)
• 10:00 AM Labor market conditions index, September (last -0.7)
• 11:00 AM Minneapolis Fed President Kashkari (FOMC non-voter) speaks: Federal Reserve Bank of Minneapolis President Neel Kashkari will speak at a town hall forum on ending “Too Big to Fail” and the role of the Federal Reserve in Arden Hill, Minnesota. Media Q&A is not expected.

Wednesday, October 12

• 09:40 AM Kansas City Fed President George (FOMC voter) speaks: Federal Reserve Bank of Kansas City President Esther George will give a speech at the Federal Reserve Bank of Chicago’s Annual Payments Symposium. Last week, President George, who dissented at the September FOMC meeting, remarked that the September jobs report was encouraging and suggestive of continued momentum.
• 10:00 AM JOLTS job openings, August (consensus 5,800, last 5,871): The JOLTS measure of job openings rose to a new high in July. Consensus expects job openings to edge down in August.
• 10:00 AM New York Fed President Dudley (FOMC voter) speaks: Federal Reserve Bank of New York President William Dudley will speak at a fireside chat with the Business Council of New York State in Albany. Last week, President Dudley remarked that monetary policy remains accommodative and he suggested that more effective communication would help the Fed meet its inflation objective.
• 02:00 PM Monthly budget statement, September (consensus $29.3bn, last -$107.1bn): Consensus expects the federal budget balance to rise to $29.3bn in September.
• 02:00 PM Minutes from the September 20-21 FOMC meeting: The September FOMC meeting statement described risks to the economic outlook as “roughly balanced.” In the minutes, we will be watching for any indications about the committee’s sense of urgency regarding rate increases in the near term.

Thursday, October 13

• 08:30 AM Initial jobless claims, week ended October 8 (GS 255k, consensus 253k, last 249k): Continuing jobless claims, week ended October 1 (last 2,058k):  We expect initial jobless claims to edge up to 255k after claims declined to the lowest level since April last week. The fall in claims last week was relatively widespread across states, with the largest drops in California (-3.1k) and Georgia (-1.9k).
• 12:15 PM Philadelphia Fed President Harker (FOMC non-voter) speaks: Federal Reserve Bank of Philadelphia President Patrick Harker will give a speech on the economic outlook to the World Affairs Council of Philadelphia. Audience and media Q&A is expected.
• 09:30 PM Minneapolis Fed President Kashkari (FOMC non-voter) speaks: Federal Reserve Bank of Minneapolis President Neel Kashkari will speak at a town hall forum on ending “Too Big to Fail” and the role of the Federal Reserve in Missoula, Montana. Media Q&A is not expected.

Friday, October 14

• 08:30 AM Retail sales, September (GS +0.7%, consensus +0.6%, last -0.3%); Retail sales ex-auto, September (GS +0.4%, consensus +0.5%, last -0.1%); Retail sales ex-auto & gas, September (GS +0.3%, consensus +0.3%, last -0.1%); Core retail sales, September (GS +0.4%, consensus +0.3%, last -0.1%): We expect headline retail sales to rise 0.7% after gasoline prices rose and auto sales strengthened in September. Core retail sales are likely to increase by 0.4% after a softer-than-expected August report as the retail components of service sector surveys looked strong September.
• 08:30 AM PPI final demand, September (GS +0.3%, consensus +0.2%, last flat); PPI ex-food and energy, September (GS +0.2%, consensus +0.1%, last +0.1%); PPI ex-food, energy, and trade, September (GS flat, consensus +0.1%, last +0.3%): We expect PPI ex-food, energy, and trade to be flat and for headline PPI to increase by 0.3%. Last month, producer prices were softer than anticipated, led by weakness in durable consumer goods and private capital equipment prices.
• 08:30 AM Boston Fed President Rosengren (FOMC voter) speaks: Federal Reserve Bank of Boston President Eric Rosengren will give opening remarks at the Boston Fed’s 60th annual economic conference, “The Elusive “Great” Recovery: Causes and Implications for Future Business Cycle Dynamics.”
• 10:00 AM University of Michigan consumer sentiment, October preliminary (GS 92.5, consensus 92.0, last 91.2): We expect the University of Michigan consumer sentiment index to rise to 92.5 in the October preliminary estimate, following a 1.2pt increase in the final September report. The measure remains in the middle of its range over the past year.
• 10:00 AM Business inventories, August (consensus +0.1%, last flat): Consensus expects a 0.1% increase in inventory levels in August.
• 01:30 PM Fed Chair Yellen (FOMC voter) speaks: Federal Reserve Chair Janet Yellen will give the keynote address at the Boston Fed’s 60th annual economic conference, “The Elusive “Great” Recovery: Causes and Implications for Future Business Cycle Dynamics.”

Source: DB, GS, BofA

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Oil prices are rebounding from their Friday drop as first the Saudis, then Russia dropped more hints at the potential for maybe, possibly, kinda, sorta considering an output freeze…

As Bloomberg reports, Russia, the world’s largest energy exporter, is willing to consider freezing or even cutting oil output in cooperation with OPEC, said President Vladimir Putin.

Speaking at the World Energy Congress in Istanbul Monday, Putin said he hoped OPEC would agree on limits to its crude production in November and that Russia was ready to support that decision. Russia will continue to be a reliable energy supplier, he said.

 

Ministers from some of the largest oil-producing nations are gathering in Turkey this week to discuss ways to end a two-year supply glut. With benchmark Brent crude trading at about $52 a barrel — less than half its price in mid-2014 — countries from Saudi Arabia to Russia remain under severe economic pressure. Last month in Algiers, the Organization of Petroleum Exporting Countries reversed its policy of pumping without constraints, helping boost prices.

 

“It is not unthinkable that we could see $60 by year-end” following the agreement in the Algerian capital, Saudi Arabia’s Minister of Energy and Industry Khalid Al-Falih said in Istanbul.

 

Even so, a lot of work needs to be done by the next OPEC meeting on Nov. 30, with crucial details still to be resolved on how the burden of cuts will be shared, or whether producers outside the group including will cooperate. Russia would prefer to freeze its output at current record levels rather than make cuts, Energy Minister Alexander Novak said earlier Monday.

 

Russia has pumped 11.2 million barrels a day of oil so far in October, beating last month’s post-Soviet record of 11.1 million, according to preliminary data from the Energy Ministry’s CDU-TEK unit.

And the resultant short-squeeze jawboning-driven shenanigans…

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In the latest reminder that there are more flash points in the middle east than just the ongoing Syrian conflict, yesterday two missiles fired from rebel-held territory in Yemen landed near an American destroyer in the Red Sea, the U.S. Navy said Monday, the second such launch targeting ships in the crucial international waterway in recent days. AP reports that the missile launches Sunday came as a ballistic missile fired from Yemen apparently targeted a Saudi air base near the Muslim holy city of Mecca, the deepest strike yet into the kingdom by Shiite rebels and their allies.

Yemen’s Houtshi Shiite rebels known offered no reason for the launches, although a reasonable explanation is that the strike was in retaliation for a Saudi-led airstrike targeting a funeral in Yemen’s capital killed over 140 people and wounded 525 on Saturday.

In a statement, the Navy said no American sailors were injured and no damage was done to the USS Mason, an Arleigh Burke class of guided missile destroyer whose home port is Norfolk, Virginia. Lt. Ian McConnaughey, a spokesman for U.S. Navy Forces Central Command, said that it’s unclear if the USS Mason was specifically targeted, though the missiles were fired in its direction over an hour’s time period, starting at around 7 p.m.

U.S. destroyer USS Mason sails in the Suez canal

According to an American defense official, cited by the AP, the USS Mason used onboard defensive measures after the first missile was fired, but it wasn’t clear if that caused the missile to splash harmlessly into the sea. The destroyer at the time of the missile fire was north of the Bab el-Mandeb Strait, which serves as a gateway for oil tankers headed to Europe through the Suez Canal, the official said.

However, as was the case with Saudi Arabia which initially denied it was responsible for the Yemen funeral airstrike which killed over 100, the Houthi-controlled SABA news agency of Yemen quoted an anonymous army official denying its forces fired on the USS Mason, without elaborating.

This is the second such incident to target a boat in the area: last week, an Emirati-leased Swift boat came under rocket fire near the same area and sustained serious damage. The United Arab Emirates described the vessel as carrying humanitarian aid and having a crew of civilians, while the Houthis called the boat a warship. U.S. Navy officials declined to immediately discuss what kind of rockets were used in the USS Mason incident.

Analysts with the Washington Institute for Near East Policy suggested in a report that the Houthis may have targeted the Emirati ship with an Iranian anti-shipping cruise missile, based on purported video of the attack.

 

Shiite power Iran has supported the Houthis, but denied supplying them with weapons. Any Iranian involvement could stoke tension between the Islamic Republic and the U.S., which already have had a series of tense naval encounters since the nuclear deal with world powers.

Meanwhile, suggesting that the Yemeni rebels are turning more aggressive and increasingly targeting Saudi assets, the kingdom’s state television aired a brief clip of what appeared to be a projectile that was said to have landed in Taif in the ballistic missile attack. The video shows the flash of an explosion, followed by images of emergency vehicles. Taif is home to Saudi Arabia’s King Fahd Air Base, which hosts U.S. military personnel training the kingdom’s armed forces. The Saudi military said the missile fired late Saturday night was intercepted and caused no damage. The U.S. military’s Central Command, which oversees troops in the Middle East, did not immediately respond to a request for comment.

In a modest attempt to respond to the Saudi bombing campaign that has killed thousands of innocent Yemeni civilians since last March, Houthis have fired a series of ballistic missiles in Saudi Arabia however   most of those ballistic missiles have hit areas far closer to Saudi Arabia’s border with Yemen, like an attack Friday night that targeted the southwestern city of Khamis Mushait. In the Taif attack, however, the missile struck a target more than 520 kilometers (325 miles) from the border. Taif also is just outside of Mecca, which is home to the cube-shaped Kaaba that all of the world’s Muslims pray toward.

Previously, the Saudi military also said it earlier intercepted another ballistic missile fired Sunday on the Yemeni city of Marib.

On Sunday, thousands marched through the streets of Sanaa to protest the latest Saudi strike which targeted a funeral in the capital Sanaa, one of the deadliest single attacks in the impoverished Arab country’s relentless civil war.

After initially denying its airforce was responsible, the Saudi Foreign Ministry said its U.N. mission sent a letter on Sunday to the Security Council, expressing the kingdom’s “deep regret of the reported attack” on the funeral. Saudi officials have promised to investigate the bombing, although one doubts such a “self-evaluation” will lead to any change in the Saudi offensive.

The Yemen war, which has been mostly ignore by the media, is largely overshadowed by the conflict against the Islamic State group elsewhere in the Middle East, though rights groups have mounted increased criticism of the Saudi-led airstrikes in recent months for killing civilians. The U.N. and rights groups estimate the conflict has killed at least 9,000 people and displaced nearly 3 million more. As Reuters reported earlier today, the US is increasingly concerned about legal blowback to its ongoing arms sales to Yemen as Saudis continue to bomb Yemen. However, as in the case of Saudi Arabia, it is unlikely that any amount of “seller’s remorse” will stop US arms shipments to the nation that has been among the most generous donors to the Clinton Foundation.

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With US Treasury markets closed, all eyes are on Bunds which are pushing on further above the cruclal 0.00% they broke Friday. Touching 5bps (yield) today, 10Y yields are nearing the upper bound of their post-Brexit range… as Deutsche Bank is bid.

Despite the un-taper announcements, Bunds are being dumped…

 

And it appears – as we noted earlier – that allowing the most systemically dangerous bank in the world to cheat on stress tests signals a TBTF buying opportunity…

 

 

Charts: Bloomberg

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While there was substantial surprise when CNN announced in its post debate poll that Hillary was the clear winner from last night’s debate, when it announced that 57% of its 537 “democrat leaning” viewers found Clinton to be the winner… 

… another “hot mic” incident may have emerged when CNN may have accidentally caught itself coaching a member of its post-debate focus group how to respond to a question following last night’s debate.

In a video uploaded to YouTube shortly after Sunday’s debate shows CNN discussing the debate’s events with a focus group of undecided Ohio voters, CNN captures a moment from the debate in which Hillary Clinton says, “that America already is great, but we are great because we are good.” Then, as CNN cuts back to its focus group, CNN reporter Pamela Brown can apparently be heard speaking to a group participant in a hushed tone.

“America is great, because we’re good,” Brown is heard saying.

Realizing she is back on the air, Brown then asks the same participant what anti-Trump argument from Clinton impressed her most. The participant responds with a close approximation of what Brown had just said to her seconds before.

“She stated that America is already great, and I tend to agree with that,” the panel member says. “Though we are slow in progressing in a number of ways, we are progressing and we need to continue the momentum.”

As the Daily Caller notes, “this brief exchange is being interpreted by many as proof CNN was coaching focus group member about what to say on the air. Within just a few hours of being uploaded, the video collected nearly 150,000 views. There are other possible explanations, though; Brown may have been informing focus group members about what clip CNN had just aired (since they couldn’t see the replay themselves), or Brown could have been setting up a semi-staged response after previously finding out what the focus group member wanted to say.”

Watch the exchange below.

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• Rancorous Debate Gets Personal (WSJ)
• In debate, Trump signals aggressive close to his campaign (AP)
• Trump Ends Nightmare Weekend With Over-the-Top Debate (BBG)
• Trump vs Clinton: He calls her a devil, she says he abuses women (Reuters)
• Ryan discussed revoking Trump endorsement (Politico)
• Trump’s body language during debate raises social media eyebrows (Reuters)
• Mexican peso rises after Trump-Clinton debate, pound falls again (Reuters)
• Pound Fails to Shake Off Wounded Image After Week of Flash Crash (BBG)
• $60 Oil Not ‘Unthinkable’ This Year, Saudi Energy Minister Says (WSJ)
• OPEC’s Quiet Man Is at Center of Cuts Deal Nobody Saw Coming (BBG)
• Yemen’s Houthis lash out after air strike with missile attack (Reuters)
• NBC suspends Billy Bush for role on Trump tape (AP)
• Samsung to Halt Galaxy Note 7 Production Temporarily (WSJ)
• Samsung Halting Note 7 Output Amid Reports of New Fires (BBG)
• Global Political Uncertainty Weighs on Growth Outlook (WSJ)
• China Intensifies Push to Cut Debt With Multi-Agency Blitz (BBG)
• Almost 1.4 Million Without Power as Matthew Death Toll Rises (BBG)
• Aftereffects of Matthew to linger in North Carolina (AP)
• Jack Ma, Spielberg Strike Deal to Bring Hollywood to China (BBG)
• Banks ponder the meaning of life as Deutsche agonizes (Reuters)
• Ex-Credit Suisse Trader Wins Dismissal of U.K. Fraud Charges (BBG)

 

Overnight Media Digest

WSJ

– Samsung Electronics Co has temporarily halted production of its troubled Galaxy Note 7, according to a person familiar with the matter, the latest setback for the South Korean technology giant as it struggles to manage a recall of 2.5 million smartphones. http://on.wsj.com/2d1Genn

– AT&T Inc and T-Mobile US Inc said Sunday they will stop issuing new Galaxy Note 7 smartphones to replace the ones turned in by customers, further complicating a massive recall of the Samsung Electronics Co devices and sowing confusion among consumers after multiple reports of the devices overheating. http://on.wsj.com/2d1FZbT

– Elon Musk posted a message on Sunday to Twitter saying Tesla Motors Inc and SolarCity Corp, both of which he leads, had no need to tap the equity or debt markets. http://on.wsj.com/2d1ERVy

– Steven Spielberg is teaming up with Jack Ma’s Alibaba Group Holding Ltd in a partnership that will help Spielberg’s Amblin Partners produce, finance and distribute movies, the companies said Sunday. http://on.wsj.com/2d1F9Mg

– NBC was on the defensive after the emergence of a recording of one of its rising stars, “Today Show” co-anchor Billy Bush, engaging in a lewd conversation with Donald Trump in 2005. http://on.wsj.com/2d1G9A5

– Australian mining billionaire Gina Rinehart has joined with a Chinese company to bid A$365 million (US$277 million) for S. Kidman & Co, Australia’s largest cattle ranch. http://on.wsj.com/2d1G52Z

 

FT

* Germany is considering changing its labour laws to make it more attractive for banks looking to move their operations from the United Kingdom following Britain’s historic decision to leave the European Union.

* Republican presidential nominee Donald Trump remained defiant and vowed to stay in the presidential race, as calls for him to leave the race grew stronger. Trump’s running mate Mike Pence said he was offended by Trump’s comments after a video surfaced showing Trump making lewd comments on women.

* Heads of the two biggest Wall Street banks indicated that they are more likely to shift their operations to New York than the eurozone if they move out of London. Jamie Dimon, chief executive of JPMorgan Chase, and James Gorman, chief executive of Morgan Stanley, said at the annual meeting of the International Institute of Finance in Washington that brexit could trigger a wider crisis.

 

NYT

– Billy Bush, a host on the Today show was suspended by NBC for his role in a video with Donald Trump, where he was heard engaged in a misogynistic conversation about women. nyti.ms/2d60FdJ

– Hurricane Matthew was downgraded to a post-tropical cyclone on Sunday morning as it hit North Carolina and Virginia. nyti.ms/2d61bIY

– Yemen saw a series of airstrikes on Saturday, which Yemeni officials and witnesses said was an attack by the military coalition led by Saudi Arabia. nyti.ms/2d62VSe

– Donald Trump and Hillary Clinton participated in the second presidential debate on Sunday night in bitter and personal terms. nyti.ms/2d62YxD

 

Britain

The Times

* Australian mining magnate Gina Rinehart has made a joint bid with a Chinese company to buy one of the UK’s largest cattle producers, which has pastoral leases covering more than 600,000 square miles of outback. (http://bit.ly/2dUQGK9)

* In a role reversal for the British economy, manufacturers have enjoyed a sales boost since the EU referendum, but the dominant services sector is showing signs of faltering, according to British Chambers of Commerce. (http://bit.ly/2dUSnHt)

The Guardian

* Facebook ‘s UK business generated an 11.3 million pound ($14.05 million) tax credit last year, despite the world’s largest social network making a global profit of $6.19 billion, according to the latest company accounts. (http://bit.ly/2dDoRuA)

* The union at the centre of the bitter Southern railway dispute has called for last-ditch talks to try to avert a three-day strike this week. Members of the Rail, Maritime and Transport union will take action from Tuesday in the long-running row over the role of conductors. (http://bit.ly/2dURBdw)

The Telegraph

* The recent takeover of Bernard Matthews will be scrutinised by the Work and Pensions select committee this week after concerns that the deal was “carefully crafted to dump the pension scheme”. (http://bit.ly/2e2g94z)

* Online retailer eBay paid just 1.1 million pounds ($1.37 million) in tax in the UK last year, despite telling U.S. investors that Britain was its second largest market, generating revenues of $1.4 billion, according to UK filings. (http://bit.ly/2dC2Nhw)

Sky News

* The heads of the UK’s leading challenger banks will this week renew calls for ministers to ease tax and regulatory burdens on the sector when they hold their first talks at the Treasury since George Osborne’s sacking as Chancellor. (http://bit.ly/2dDhH9B)

* The low-cost airline Monarch is close to finalising a multi-million pound financing package with Boeing, paving the way for its operating licence to be extended by aviation regulators ahead of a crunch deadline next week. (http://bit.ly/2dDjE5H)

The Independent

* Gatwick Airport bosses claim Heathrow is “likely to fail’ in building a third runway even if the project is given the go-ahead by the Government this week. (http://ind.pn/2dUTMgV)

 

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The gold trading Commitment of Traders (COT) report, released Friday, shows the peculiarly timed gold sell off and much needed wash out of speculative longs out of the gold futures market last week sets gold up for lower prices, prior to moving higher again.

The timing of the sudden sell off, when Chinese gold markets and the Shanghai Gold Exchange (SGE) were closed for the five days of the Chinese Golden Week, has rightly raised a lot of eyebrows. China is now a powerful force in the gold market, and is influencing global gold prices through the physical gold exchange, the Shanghai Gold Exchange and indeed the Shanghai Futures Exchange. China also has four gold-backed ETFs that are growing in popularity.

Concerns that the sell off was manipulative in nature are again widespread. The sell off was once again another purely paper or electronic futures market sell off with little or no liquidations of actual gold bullion and no important gold data or news or wider market data. Indeed the sell off came at a time of very robust physical demand – especially in mainland Europe – due to concerns about Deutsche and other German banks, Italian banks and other European banks.

There is also very robust demand in the UK on concerns about the outlook for sterling which has seen sterling gold surge in recent months. Gold brokers in the UK, including GoldCore, saw significant demand after the sell off last week and the sterling flash crash led to a further spike in demand.

Our friend John Rubino in Dollar Collapse looked at the latest Commitment of Traders (COT) report and his latest note about this is an important one to consider:

This year’s recovery in precious metals prices – and the sudden spike in gold/silver mining stocks – convinced a lot of people that a new bull market had begun. Last week’s brutal smack-down scared the hell out of many of the same folks.

The latest commitment of traders (COT) report implies that we should all relax. Things are playing out pretty much according to a script that’s been in place for decades — and which points to happy times by early next year.

The quick and dirty COT story is that it’s a snapshot of what the big players in gold/silver futures contracts are up to. There are two main groups in this market: the commercials (mostly big banks and companies that buy metal to turn it into coins, jewelry and industrial products) and speculators who bet on price moves. The former consistently fool the latter into guessing wrong at turning points. That is, the speculators are usually way long at the top and very short at the bottom. So you can tell where prices are headed over next the six or so months by looking at what the speculators are betting on and assuming that if they’re excited, they’re wrong.

The following chart illustrates the point (see chart above). Ignore everything here except the red line, which represents the speculators. When it’s way up, they’re very long and prices are about to fall, and vice versa.

This year they’ve gone record long, which explains the fast recovery in metals prices and mining stocks: The speculators were piling in. This of course sets the stage for an eventual correction. So what happened last week was to be expected (though it was several months overdue, illustrating the point that the COT report is great for direction but dangerously unreliable for timing).

The full note can be read here

 

Gold and Silver Bullion – News and Commentary

PRECIOUS – Gold up on China post-holiday buying; weaker dollar supports (Reuters)

Gold supported as Chinese investors return (BullionDesk)

Gold Advances as Investors Pile Into ETFs After Prices Retreat (Bloomberg)

Gold up on weaker dollar; presidential debate in focus (Reuters)

Gold Fizzles in Worst Week Since ‘13 as Fed Rate Fears Resurface (Bloomberg)

COT Report Is Playing Out As Usual, Which Means Lower – Then Much Higher – Prices Coming (DollarCollapse)

Ed Steer’s Gold and Silver Daily (GoldSeek)

Dutch gold finds a new home (NewsEurope)

Gundlach: “Deutsche Bank Will Be Bailed Out But What About Credit Suisse” (ZeroHedge)

Here’s Where the Next Bank Deposit “Bail-In” Will Strike… (InternationalMan)

Gold Prices (LBMA AM)

10 Oct: USD 1,262.10, GBP 1,016.62 & EUR 1,129.71 per ounce
07 Oct: USD 1,255.00, GBP 1,012.91 & EUR 1,127.62 per ounce
06 Oct: USD 1,265.50, GBP 994.30 & EUR 1,131.23 per ounce
05 Oct: USD 1,274.00, GBP 1,001.11 & EUR 1,134.37 per ounce
04 Oct: USD 1,309.15, GBP 1,026.90 & EUR 1,172.21 per ounce
03 Oct: USD 1,318.65, GBP 1,023.40 & EUR 1,173.99 per ounce
30 Sep: USD 1,327.90, GBP 1,025.01 & EUR 1,187.67 per ounce

Silver Prices (LBMA)

10 Oct: USD 17.78, GBP 14.31 & EUR 15.92 per ounce
07 Oct: USD 17.33, GBP 14.01 & EUR 15.55 per ounce
06 Oct: USD 17.76, GBP 13.98 & EUR 15.88 per ounce
05 Oct: USD 17.80, GBP 13.99 & EUR 15.86 per ounce
04 Oct: USD 18.74, GBP 14.68 & EUR 16.78 per ounce
03 Oct: USD 19.18, GBP 14.89 & EUR 17.07 per ounce
30 Sep: USD 19.35, GBP 14.92 & EUR 17.33 per ounce

Recent Market Updates

– Currency Shock Sees Sterling Gold Surges 5% In One Minute “Flash Crash”
– Top Gold Forecaster: “As Quickly As Gold Fell” May “Rally Back” on Global Risks
– Gold Buying ‘Opportunity’ After Surprise 3.4% Drop
– Deutsche Bank “Is Probably Insolvent”
– GBP Gold Rises 1.3% as Sterling Slumps On ‘Hard Brexit’ Concerns, Up 36% YTD
– Why Krugman, Roubini, Rogoff And Buffett Hate Gold
– ECB Refused “To Answer Questions” – Deutsche Bank “Systemic Threat” Is “Not ECB Fault”
– Euro “Might Start To Unravel” If Collapse Of Deutsche Bank
– Do You Really Own Your Gold?
– “Gold Will Likely Soar To A Record Within Five Years”
– Savings Guarantee? U.N. Warns Next Financial Crisis Imminent
– Gold Up 1.5%, Silver Surges 3% – Yellen Stays Ultra Loose At 0.25%
– Trump and Clinton Are “Positive For Gold” – $1,900/oz by End of Year

via http://ift.tt/2ej4Dot GoldCore

In the latest scandal to emerge involving Deutsche Bank, earlier today the FT reported that German’s largest lender was allowed to cheat, pardon was given “special treatment” by the ECB in the July stress tests.  As part of the July stress tests results, which “promised to restore faith in Europe’s banks by assessing all of their finances in the same way” Deutsche Bank’s result was boosted by a “special concession” agreed to by Mario Draghi: DB’s results included the $4 billion in proceeds from selling its stake in Chinese lender Hua Xia even though the deal had not been done by the end of 2015, the official cut-off point for transactions to be included.

While the Hua Xia sale was agreed in December 2015, it has still not been completed and now faces a delay after missing a regulatory deadline last month, though the bank is still confident of completion this year.

As the FT notes, the Hua Xia treatment was disclosed in a footnote to Deutsche’s stress test results, and adds that “none of the other 50 banks in the stress tests had similar footnotes, even though several also had deals agreed but not completed at the end of 2015.”

As disclosed in the central bank’s summer stress test, Deutsche’s common equity tier one capital fell to 7.8% after it was “subjected to the stress tests’ imagined doomsday scenario of fines, low interest rates and low economic growth.” However, without the Hua Xia boost, the ratio would have been 7.4%, a level comfortably above regulatory minimums. Why the speal treatment? Because the higher published result helped reassure investors who were growing increasingly nervy about the bank’s capital adequacy.

Other banks were not as lucky:

In one case, Spanish lender Caixabank completed the €2.65bn sale of foreign assets to its parent company Criteria Holding in March but was still not allowed to include the impact of that sale in its results.

The special treatment raised eyebrows among market analysts: “This [Deutsche’s treatment] is perplexing,” said Chris Wheeler, an analyst at Atlantic Equities. “The circumstances mean that it is inevitable the market watchers will be suspicious and have some concern about the veracity of the results.”

Nicolas Véron of Bruegel, the Brussels think-tank, said it was important that both the ECB and the European Banking Authority, which oversaw the tests, could “explain and defend their methodological choices”, especially given the market focus on Deutsche. “Stress testing methodologies should be applied uniformly and without any special treatment,” he added. “This of course equally applies to banks that are systemically important, such as Deutsche Bank.”

The only comment the ECB gave to the FT is that the central bank “treats all banks equally in line with the regulation” even though that appeared not to be the case in an attempt to pad DB’s balance sheet. The ECB would not comment on the Deutsche case specifically. The EBA said that there were more than 20 “one-offs” approved in the stress tests. “The one-offs are designed to avoid obvious anomalies in the forward-looking stress test where events have already taken place in 2015,” the EBA said.

According to the FT, other “one-offs” were disclosed citing a clause in the methodology that permits limited concessions around “administrative expenses, profit or loss from discontinued operations and other operation expenses”. Still, there is an obvious contradiction between the disclosure and the state rules:

The Deutsche disclosure simply says that the results include the proceeds of the Hua Xia sale, which “will be closed in 2016”. There is no effort to reconcile that to the official rules, which say: “any divestments, capital measures or other transactions that were not completed before 31 December 2015, even if they were agreed upon before this date, should not be taken into account in the projections”.

As a result of the report, DB shares, which earlier had traded as low as -3% on the day following the weekend report that the German lender’s negotiations with the DOJ had dailed to reach a deal, rebounded and were almost unchanged on the day as traders read into the report that the ECB would break even its own rules to keep Deutsche Bank stable.

via http://ift.tt/2d2oCYj Tyler Durden