Good morning. Here’s what you need to know.
- Asian markets were mixed, with Japan’s Nikkei down 0.49%; Hong Kong’s Hang Seng up 0.18%; and Korea’s KOSPI also up 0.18%. Europe was up slightly, and U.S. futures looked mixed.
- Prepare for another stacked day of economic data. This morning at 8:30 a.m. ET, we’ll see U.S. producer price index. Economists are expecting a 0.2% month over month increase, down slightly from 0.3%.
- At 8:30 a.m. we’ll also get advance retail sales, the monthly measure of of sales at retail outlets. Economists are expecting a flat 0% here, down from 0.2% last month. “Core details should look better than the headline, which should be held back by a drop in auto sales,” said Credit Suisse’s Alex Lebwohl. “On the upside, we look for a pick-up in food sales and a rebound in both building materials and clothing after declines last month.” At 9:00 a.m., the S&P/Case-Shiller Home Price Index will be released. Economists expect a 12.50% year-over-year increase in the headline 20-city composite, beating the last 12.39% print.
- Then at 10:00 a.m., get ready for U.S. consumer confidence. Economists think that the Conference Board’s confidence measure dropped to 75.0 in October from 79.7. “Our expectation is that consumer confidence fell again in October as the federal government shutdown and debt ceiling fight began to weigh on consumers,” said Wells Fargo’s John Silvia. “This erosion in consumer confidence would be consistent with the drop in confidence after the last debt ceiling debate in August 2011.”
- Apple reported earnings after the bell yesterday, posting an EPS $8.26 versus expectations of $7.92. The company bested iPhone sales, with 33.8 million units sold and made $37.5 billion in revenue versus expectations of $US36.82 billion.
- BP reported a 33.6% decline in Q3 net profits thanks to lower refining margins, The Wall Street Journal’s Justin Scheck reports. “BP has been trying to pull itself out of a three-year retrenchment following the April 2010 Deepwater Horizon explosion and spill in the Gulf of Mexico,” according to the Journal. “Since then, BP has sold close to $US40 billion in assets and taken more than $US42 billion in write-downs related to legal settlements and cleanup costs.”
- Deutsche Bank’s net profit fell to a paltry 51 million euros in the third quarter after it put aside over a billion for legal expenses, the AP’s David McHugh reports. Compare that with the same quarter a year ago, when the bank’s net profit came in at 754 million euros. Net revenues also fell 10%. “It said the deduction to earnings for litigation costs were mostly related to legal action over U.S. residential mortgage-backed securities, investments based on mortgage loans to borrowers with shaky credit,” according to the report.
- Multi-level nutritional products company Herbalife beat earnings expectations yesterday after the closing bell, posting an EPS of $US1.41. Revenue was also a beat, at $US1.21 billion versus estimates of $US1.197 billion.
- The Reserve Bank of India lifted interest rates to 7.75%, the second time is as many months, Reuters reports. India’s central bank warned that “inflation is likely to remain elevated despite sluggish growth,” according to the report.
- Japanese household spending climbed by 3.7% in September, the strongest annual gain in six months. The development may be a sign that Prime Minister Shinzo Abe’s plan to beat deflation via government spending and easy monetary policy may be working.
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