REUTERS/Mike BlakeParkinson’s patient Jim Coppula works out in the ring with boxing coach Justice Smith (L) during his Rock Steady Boxing session in Costa Mesa, California September 16, 2013.
Good morning. Here’s what you need to know.
- Asian markets saw a nasty sell-off, with Japan’s Nikkei down 1.95%; Hong Kong’s Hang Seng, 1.36%; and Korea’s KOSPI, 0.99%. European markets were likewise down, and U.S. futures were pointing lower too.
- A Chinese bank story from Bloomberg is causing some worry this morning. “Industrial & Commercial Bank of China Ltd., the world’s most profitable lender, and its four largest rivals expunged in the first six months 22.1 billion yuan ($3.65 billion) of debt that couldn’t be collected, up from 7.65 billion yuan a year earlier, filings showed,” according to the report. “That didn’t pare first-half profits, which climbed to a record $US76 billion, as provisions were set aside in earlier periods when the loans began souring.”
- Spain finally emerged from recession, posting 0.1% GDP growth in the third quarter. The figure broke its 9-quarter negative streak. You’ve got to start somewhere.
- This morning we’ll get some data releases on U.S. housing and imports. At 8:30 a.m. ET, U.S. import prices will come in. Economists are expecting a 0.2% increase, up from last month’s 0.0%. At 9:00 a.m. we’ll have the U.S. house price index. Economists are looking for a 0.8% increase from last month’s 1.0% jump.
- At 10:00 a.m. the Bank of Canada will announce its interest rate decision. “The Bank of Canada will likely keep its benchmark overnight rate at the 1% level, where it’s stood for more than three years, for at least eight more months as disappointing economic growth keeps consumer price pressures near the very bottom of the inflation-target range,” report the Wall Street Journal’s Nirmala Menon and Don Curren.
- At 10:00 a.m. we will also see Eurozone consumer confidence. Economists are expecting a -14.5 print, slightly better than the last reading, -14.9. Any number below zero indicates negative consumer sentiment.
- Global machinery giant Caterpillar reported Q3 earnings before the opening bell this morning. Earnings came in at $US1.45 per share, much weaker than the $US1.67 expected by analysts. Revenue of $US13.42 billion was also below the $US14.47 billion expected. Boeing also reported earnings. At $US1.80 EPS, the company beat analyst expectations of $US1.55.
- After yesterday’s weak jobs report, Goldman Sachs’ Jan Hatzius wrote clients about the significance of the disappointments of recent months. “The 3-month average gain in nonfarm payrolls is now down to 143,000, the weakest pace since August 2012. Other measures are even softer, with 3-month averages of 82,000 for total household employment growth and 42,000 for ‘payroll-consistent’ household employment growth,” he wrote.
- Activist investor Carl Icahn reduced his stake in Netflix from 9.98% to 4.5%, he tweeted yesterday. It was a pretty solid trade for the hedge funder, who bought Netflix at $US58 and sold it $US322, a whopping 457% return.
- $13 billion Justice Department settlement aside, investors — led by Goldman Sachs Asset Management and BlackRock — are seeking $US6 billion from banking giant JP Morgan over mortgage-backed securities sold to them before the financial crisis, the FT reports. Two years in the making, the deal would likely follow the format of the $US8.5 billion settlement between investors in Bank of America agreed upon in 2011, according to the report. JP Morgan anticipated this case when it set aside $US9 billion last quarter for legal matters, according to the WSJ.