REUTERS/Jonathan ErnstA demonstrator holds up a sign at the ‘Stop Watching Us: A Rally Against Mass Surveillance’ march near the U.S. Capitol in Washington, October 26, 2013.
Good morning. Here’s what you need to know.
- Asian markets were mostly higher, with Japan’s Nikkei up big at 2.19%; Hong Kong’s Hang Seng up 0.48%; and Korea’s KOSPI, 0.68%. European markets were also mostly up, and U.S. futures were pointing higher too.
- Get ready for a big week of economic data. This morning at 9:15 a.m. ET, we’ll see the monthly U.S. industrial production figure. Economists are expecting an increase of 0.4%, the same reading as last month.
- Then at 10:00 a.m. U.S. pending home sales will be released, tracking residential contract activity for existing homes in September. Economists are expecting a 0% move this month (and 3.5% year over year), as opposed to -1.6% last month. “The gradual rise in interest rates likely played a role in slowing sales in August and likely will keep the bounce back in pending sales restrained in September,” Wells Fargo’s John Silvia wrote to clients. “Going forward, many analysts will be watching the existing housing market indicators now that interest rates are beginning to drop again. The short-term pull back in rates could help to support slightly better sales numbers in the coming months.”
- At 10:30 a.m., the Dallas Fed will release its manufacturing figure for October. Economists are expecting the regional index to come in at 9.0, down from last month’s 12.8 print.
- Some big companies will report earnings today. Apple will report after the closing bell, with analysts expecting an EPS of $US7.93. Herbalife will also report this afternoon, and analysts are estimating EPS at $US1.14. Halfway through earnings season, it looks like EPS are set to post new records. “At $US26.85, 3Q 2013 EPS is on track to establish a new quarterly and trailing four-quarter high,” wrote Goldman Sachs strategist Amanda Sneider. “Trailing four-quarter EPS totals $US102.13. Despite more sales misses than usual, aggregate sales results are in line with expectations.”
- The New York Stock Exchange says that Saturday’s test run of the Twitter IPO was a success. This was the first time the exchange conducted a mock IPO, likely taken as a precaution after tech giant Facebook’s high-profile trading debacle on the NASDAQ in May 2012.
- A German newspaper has reported that Barack Obama knew U.S. intelligence agents were eavesdropping on Angela Merkel’s mobile phone as long ago as 2010. According to U.S. officials, the NSA ended a spying program on Merkel and “other world leaders after an internal Obama administration review started this summer revealed to the White House the existence of the operation,” reported the Wall Street Journal’s Siobhan Gorman and Adam Entous.
- Dogged by inflation and falling central bank reserves, Argentine President Cristina Fernandez’s saw her party’s Congressional majority shrink after Sunday’s mid-term elections. The development has all but quashed any hope of a constitutional amendment to allow Fernandez a third term, and launched what will be a closely-watched political battle to succeed her in 2015.
- Toyota outsold all other carmakers for the second time in three quarters, Bloomberg’s Ma Jie and Yuki Hagiwara report. From July to September, Toyota sold 2.5 million vehicles, up 2.8% from a year earlier. Thanks to Abenomics and a weakened yen, large manufacturers are more confident than they’ve been since 2007, according to the report.
- On Tuesday and Wednesday, the FOMC will hold its October meeting, with market analysts expecting the central bank to remain “on hold” and not taper QE until around March. “Any FOMC effort at balance will come across as hawkish,” Citi’s Steven Englander wrote to clients, meaning that any slight hint of non-dovishness could jar markets.
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