REUTERS/Carlo AllegriChildren pose for their parents photo with a new installation of British graffiti artist Banksy’s art, in New York October 20, 2013
Good morning. Here’s what you need to know.
- Asian markets were higher, with Japan’s Nikkei up 0.91%; Hong Kong’s Hang Seng, 0.42%; and Korea’s KOSPI, 0.03%. European markets were mixed, and U.S. futures were pointing higher.
- Multiple outlets reported yesterday that JP Morgan will pay a $US13 billion civil penalty for allegedly failing to warn investors about risky mortgage-backed securities trades. It would be the biggest civil penalty in history, representing about half of the banking giant’s record profits last year.
- Japanese export growth missed the mark in September, increasing 11.5% from a year earlier but missing analyst expectations of 15.6%. The development is “a sign that slowing demand in Asia is taking the shine off Prime Minister Shinzo Abe’s stimulus policies and clouding the outlook for a budding economic recovery,” reports Reuters’ Leika Kihara and Tetsushi Kajimoto.
- German producer prices climbed 0.3% in September, rising above economist expectations for a 0.1% increase. Prices were still down 0.5% from the year previous. “Muted inflation at Germany’s factory gates masks sharp increases in consumer goods prices. Food prices were up 2.7% from September 2012, as prices for butter and milk leapt 32.1% and 18.2% respectively. Wine prices were up 7.5% on the year,” reported the Wall Street Journal’s Nina Adam.
- This morning at 10 a.m. ET we’ll get September existing home sales. Economists estimate that sales slipped to an annualized pace of 5.3 million. “Existing home sales rose unexpectedly in August as the upward move in mortgage rates encouraged further home buyer traffic,” wrote Wells Fargo’s John Silvia. “We continue to expect existing home sales to edge higher, although the pace of improvement may be uneven in the months ahead. Our expectation is that sales will pull back 3.1 per cent to a 5.31 million unit pace in September. Given the leaner inventory levels, existing home price appreciation will likely continue to be strong.” Thanks to the end of the government shutdown, this week we’ll receive a spate of economic data that we missed. Tuesday morning, we’ll get the long-awaited September jobs report.
- McDonald’s will report earnings before the bell this morning, with economists expecting an EPS of $US1.51, up from $US1.43 a year ago. Energy giant Halliburton will also report this morning. Analysts are expecting EPS at $US0.82, up from $US0.67 the year previous quarter.
- Interestingly, Bitcoin has surged from $US140 to $US190 over the course of a month. The price spike comes after the closure of Internet drug bazaar Silk Road, a development that many suspected would destroy the cryptocurrency used often on the site.
- Mortgage watchdog FHFA will seek a $US4 billion penalty from Bank of America, the FT reports. “The FHFA has sued 17 institutions asserting that they broke securities laws when selling the mortgage-backed securities to Fannie and Freddie,” according to the FT. “Bank of America has the biggest potential exposure, with a notional value of the securities of more than $US57bn compared with $US33bn at JPMorgan.”
- For the first time since July 3, oil fell below $US100 a barrel. Oil prices have dropped significantly since the summer, when geopolitical tensions in the Middle East raised the price.
- The Obama administration is planning a “tech surge” to address the disastrous rollout of the Obamacare website. “The President will directly address the technical problems with HealthCare.gov — troubles that he and his team find unacceptable — and discuss the actions he has pushed for to make it easier for consumers to comparison shop and enroll for insurance while work continues around the clock to improve the website,” a White House official told Business Insider’s Rob Wile.