10 Things You Need To Know This Morning

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Photo: Horrorphile

Good morning. Here’s what you need to know.

  • Asian markets were down in overnight trading with Hong Kong off 4.85%. Europe is lower and U.S. futures opened sharply lower. Stocks have seen a sell-off after the Fed’s announcement of Operation Twist. Gold and silver are both tanking as well.
  • China’s manufacturing sector has contracted for a third straight month. HSBC’s China Flash PMI fell to 49.4 in September from 49.9 the previous month. A reading below 50 indicates contraction. Check out 10 U.S. states that would get hit hard in a Chinese hard landing >
  • Eurozone manufacturing contracted for the first time in two years. Manufacturing PMI fell to 48.4 in September from 49 in August, services PMI  slipped to 49.1 from 51.5 last month. Composite PMI fell to 49.2. Consumer and business confidence have been hit as the eurozone debt crisis continues.
  • France is down 4.7% and its a bloodbath among financial stocks. Credit Agricole is down 7.2% and Societe Generale is off nearly 6.7%. Meanwhile, BNP Paribas’ executives will travel to the Middle East in coming days to raise capital and restore confidence. BNP’s stock is down 5%. 
  • As anticipated the Federal Reserve announced Operation Twist yesterday. The Fed will sell about $400 billion worth of bonds within three years and buy longer-term debt. In its statement, the Fed gave a markedly gloomy outlook on the economy pointing to recent indicators and strains in the global market. Stocks around the world have been selling hard. Check out two big surprises from the Fed announcement yesterday >
  • Initial jobless claims came in at 423K, below last week’s number but above estimates >
  • United Technologies Corp. is buying aerospace manufacturer Goodrich Corp. for $18.4 billion, including $1.9 billion of its debt. United Technologies will pay $127.50 a share in cash, a 16% premium on Goodrich’s closing stock price yesterday.
  • In earnings news, Bed, Bath & Beyond posted Q2 earnings that beat estimates after the bell yesterday. Net income was up 26% to $229.4 million or $0.93 a share, on revenue of $2.31 billion. The housewares retailer now expects full-year earnings per share to increase 22% – 25%. Meanwhile, FedEx reported Q1 earnings of $1.46 per share, on revenue of $10.52 billion but cut its full-year guidance to $6.25 – $6.75 per share.
  • Republican candidates will be in Orlando, Florida today for the Fox News-Google presidential debate. 5,000 attendees are expected at the Republican convention and straw poll known as Presidency 5. The RealClearPolitics average of polls shows Texas governor Rick Perry in the lead.
  • PIMCO’s Mohammed El-Erian has warned of a full-blown banking crisis in Europe if the rout in French banks continues. He said that signs point to an “institutional run on French banks” and that if it keeps up they would have to “deliver their balance sheets in a very drastic and disorderly fashion.” Now here are 20 banks hoping for the European bailout to work >

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