Japanese brokerage profits surge

Major Japanese brokerages have reported strong earnings for the first six months of their business year. Behind the gains are the country's booming stock markets.

Nomura Holdings posted net profits of more than 1 billion dollars for the April-to-September period. In yen terms, this is about 22 times the amount for the same quarter last year, and the firm's biggest profit in 11 years.

Source: NHK

Qantas digs deep to shore up Jetstar Japan

Qantas is said to be on the cusp of pouring tens of millions of dollars into Jetstar Japan as it seeks to secure its position in the domestic Japanese market against other newcomers.

Japanese financial newspaper Nikkei has reported Jetstar Japan will raise 11 billion yen ($117 million) next month from Qantas and Japan Airlines, which each have stakes of 33.3 per cent. Qantas has previously committed about 5 billion yen to Jetstar Japan.

Jetstar Japan's two other shareholders, Mitsubishi and Century Tokyo Leasing Corporation, are not expected to participate in the private share placement. They both have stakes of 16.7 per cent.

Since it began flying in July last year, Jetstar Japan has become the country's largest budget airline with a fleet of 17 A320 aircraft. But the cost of entering the market has weighed on the financial performance of Jetstar, which booked $50 million in losses from Jetstar Japan and Jetstar Hong Kong in the year to June.

Source: NewsOnJapan

Japan to probe megabanks after mob loan scandal

Japan's financial watchdog said Tuesday it would probe the country's top three banks in the wake of a loans-to-mobsters scandal that has scarred the reputation of major lender Mizuho.

The Financial Services Agency (FSA) will look at Mizuho's business dealings as well as rivals Mitsubishi UFJ and Sumitomo Mitsui Banking Corp., an agency spokesman said, without disclosing further details.Jiji Press news agency said the widening investigation would probe a range of issues including the banks' risk management systems, while Japan's finance minister said earlier Tuesday that the watchdog must do a better job in weeding out corporate misdeeds.
The scandal has made headlines for weeks in Japanese media, and reportedly sparked a police investigation into corporate ties with organised crime.
The widening regulatory probe comes a day after a panel of lawyers hired by Mizuho to look into its links with organised crime said bank executives knew it was doing business with gangsters but failed to stop the practice.

Source: NewsOnJapan

China urges fairness after Australia maintains Huawei ban

China on Tuesday urged joint efforts with Australia to provide a fair environment for enterprises from both nations after Australia maintained a broadband ban on Chinese telecom firm Huawei.

"China has always opposed pleading national security as an excuse for disturbing normal economic and trade cooperation between two countries," Foreign Ministry spokeswoman Hua Chunying said at a daily news briefing.

"We hope that both countries can work together to create favorable conditions and a fair environment for enterprises from both sides to conduct cooperation based on mutual respect and equality in line with the principles of market economy," Hua told reporters.

Australia on Tuesday maintained a ban issued by the previous Labor administration to bar Huawei from bidding for the country's high-speed national Internet program.

Hua said China and Australia have kept close contacts since the new Australia administration was established in September.

As important countries in the Asia-Pacific region, China and Australia share broad common interests, she said, adding that it accords with both sides' core interests to conduct mutually beneficial cooperation based on equality and mutual respect.

Huawei Australia was banned by the former Labor administration earlier last year from tendering in the National Broadband Network project over security reasons. Shortly after that, theUnited States also issued a congressional report, saying that Huawei and ZTE, another Chinese telecom company, pose a security threat to the United States and should be barred from U.S. contracts and acquisitions.

The U.S. report was dismissed by Huawei Australia Chairman John Lord as "protectionism," not security.

Source: Xinhua

China warns Japan against hyping external threats

The Chinese Foreign Ministry on Tuesday urged Japan to stop hyping up external threats and explain the true intent of its military buildup.

Spokeswoman Hua Chunying made the comments at a routine news briefing, responding to a reporter's question on media report that the Japanese Defense Minister Onodera Itsunori accused China of having intruded upon the waters around theDiaoyu Islands, called the Senkaku Islands by Japan.

China's stance on the related issues is clear, Hua responded, saying China pursues the path of peaceful development, which is its strategic choice based on the development trend of the era and its fundamental interests.

"If you look back at history, it is self-evident who is a peace-keeper and who is a war-maker," the spokeswoman added.

She urged Japan to stop intentionally hyping up external threats and tell the international community the true intent of its military buildup.

She emphasized that China has always insisted on dialogue and consultation to resolve disputes with neighboring countries. "Meanwhile, China will firmly respond to violation of its territorial sovereignty."

Hua urged Japan to make "tangible" efforts to safeguard regional peace and stability.

Source: Xinhua

China Exim bank's first overseas branch established in Paris

The Export-Import Bank of China (China Exim bank) announced on Tuesday that it has established a branch in Paris.

This is the first overseas branch of the China Exim bank which became the third Chinese bank to establish a branch in Paris, following the Bank of China and Industrial and Commercial Bank of China.

"The creation of Paris branch allow China Exim Bank possessing a financial services platform closer to its market and clients in Europe," said Li Ruogu, president of China Exim bank, adding that it would benefit Sino-French and Sino-European economic and commercial cooperation.

The establishment of China Exim bank's Paris branch means that Chinese banks think highly of the strategic significance of Paris with its role as an international financial center, and have full confidence in Sino-French cooperative perspective in economic and commercial fields, said Wu Xilin, commercial counselor of the Chinese embassy in Paris.

"The establishment of a Chinese bank in France means not only the arrival of a new Chinese company, but also a guarantee that the bank will attract other (Chinese) companies to France," said Serge Boscher, managing Director of the Invest in France Agency.

Founded in 1994, the Export-Import Bank of China is a state bank solely owned by the Chinese government. Its main mandate is to facilitate the export and import of Chinese products, assist Chinese companies with comparative advantages and promote international economic cooperation and trade.

The Bank, headquartered in Beijing, has more than 20 domestic business branches and two other overseas representative offices, one in South Africa and one in Russia.

Source: Xinhua

China's Growth, why Less is More. By Steven Barnett IMF

We should welcome China's  economic slowdown,"because by favoring structural reforms over short-term stimulus, China’s leadership is showing their commitment to move to a more balanced and sustainable growth model",says
Steven Barnett of the IMF.
China's model borrow and invest worked well to prop up growth. At least for a while. But eventually, debt rises, investment becomes less productive, and the risks rise.

Fortunately, China’s economy still has considerable buffers. The risks to the outlook in the near-term, therefore, is extremely low. But the economy is becoming more vulnerable on several fronts: surging credit, strains on local government finances, and weakening balance sheets in parts of the corporate sector. Credit provides the clearest example. A broad measure of credit (total social financing) had held steady at about 130 percent of GDP for much of the 2000s. However, since 2008, it has shot up to around 200 percent of GDP;an increase of 70 percent of GDP in 4½ years.

Not surprising, therefore, that investment is also booming. Investment accounts for nearly half of the economy’s output, which is among the highest in the world. Indeed, it is also high relative to the historical experience of other fast growing economies.But the current model of China's growth is not sustainable in the long run,as more output goes to investment,and less goes into consumption. The high rate of investment builds in overcapacity, and the lower rate of consumption brings lower growth of GDP.

 Reversing this trend requires rebalancing growth away from investment and towards consumption.

Achieving more balanced and sustainable growth will hinge on implementation of a package of reforms. Let’s focus on two areas of the package: further strengthening of the financial sector and opening the service sector to more competition. 

In this new model growth would be slower. In the coming years, taming rising risks in the economy—by reigning in credit growth and rationalizing investment, will likely slow the economy.

"We estimate that with reforms China’s growth could average around 6 percent a year from now to 2030. By all measures—except perhaps China’s 10 percent average annual growth over the past 30 years—this would be a fantastic outcome. Especially when compared to a status-quo scenario, in which China could very well get stuck in the middle-income trap and income per person would peak at around 25 percent of that in the United States in 2030. In contrast, with successful reforms, income per person in China could reach 40 percent of the U.S. level by 2030",says Steve Barnett.

"Somewhat slower growth in the near-term is a tradeoff worth making for higher future income. This is clearly good not only for China, but also the world economy. By 2030 China—especially with successful reforms—will almost certainly be the world’s largest economy. So China’s success—which will substantially increase income in China—will also mean much higher global demand and will thus be hugely important for a robust and healthy global economy".

Source: by Steve Barnett IMF

Japan to raise childcare leave pay to 67 percent of salaries

The Japanese government plans to increase the amount of benefits paid to those who take childcare leave from work to 67 pct of their salaries from the current 50 pct, labor ministry officials said Tuesday.

The move is intended to encourage women to join the job market by making it easier for men to take childcare leave and share the burden of raising children with their partners, according to the officials.The ministry sees that most Japanese men remain reluctant to take childcare leave due to concerns about income drops.

Source: NewsOnJapan

Tokyo govt rejects demand to help pay for stadium

The Tokyo metropolitan government turned down the central government's demand to shoulder 30 percent of ¥300 billion in costs for constructing the New National Stadium, the main venue for the 2020 Tokyo Olympics.

Discussions between the central and metropolitan governments have already been held, and the Education, Culture, Sports, Science and Technology Ministry has urged the metropolitan government to shoulder part of the construction costs."It is Tokyo that will gain the largest benefit from reconstruction of the stadium," the ministry said. But the metropolitan government refused and the talks remain deadlocked.
The New National Stadium will be built after demolishing the current National Stadium in Shinjuku Ward, Tokyo, and is scheduled to be completed in spring 2019. The 80,000-seat venue with a retractable roof will be equipped with a nine-lane running track. The ministry initially estimated the total construction cost at about ¥130 billion when the design for the new stadium was chosen. At the time, a host country for the 2020 Games had not yet been decided, and the new stadium was scheduled to be used only for the 2019 Rugby World Cup. Some members of the government have voiced suspicions over the huge reconstruction cost.
The design for the new stadium was chosen through an international competition, which British-Iraqi architect Zaha Hadid won.

Source: NewsOnJapan

Sinopec profit up 22.11 pct

Oil giant China Sinopec announced Tuesday that its net profit rose 22.11 percent year on year to 52.3 billion yuan (8.52 billion U.S. dollars) in the first three quarters of 2013.

The company's output of crude oil and natural gas went up 4 percent year on year to 330.79 million barrels, according to Sinopec's report.

In the first nine months, it processed 174.19 million tonnes of crude oil, an increase of 6.43 percent from a year earlier, which realized gains of 6.66 billion yuan in the refining sector while the losses of chemical businesses shrank to 59 million yuan.

Meanwhile, the company's sales of refined oil products totaled 134.64 million tonnes, up 4.91 percent year on year.

Source: Xinhua

Web Giants seek to control Web Tracking

"Web Giants Threaten End to Cookie Tracking"

  According to a report published on the Wall Street Journal,in the past month Google, Microsoft and Facebook, have said they are developing systems to plug into and control this river of data in ways that bypass the more than a thousand software companies that place cookies on websites.

The moves could radically shift the balance of power in the $120 billion global digital advertising industry,and have ad technology companies scrambling to figure out their next play.

"There is a Battle Royal brewing," says Scott Meyer, chief executive of Evidon Inc., a company that helps businesses keep track of the cookies on their websites. "Whoever controls access to all that data can charge rent for it and has a tremendous advantage going forward."                             The Silicon Valley trio, which produce browsers, email services and operating systems used by billions across many devices, are positioned to potentially learn far more about people's activities than cookies ever could. Today, a diverse ecosystem of companies places cookies on websites to track people through browsers; now the giants see an opportunity to get into tracking themselves.

The swift adoption of mobile gadgets is driving the changing landscape. Cookies let advertisers reach digital audiences, but the trail stops at smartphones and tablets, because cookie technology doesn't work well on them. Advertisers are hungry for consumer behavior on mobile devices, such as which workers are more likely to browse eBay during their lunch breaks, or the precise moment during a game of Angry Birds when a person would be most susceptible to an ad.

On Wednesday Microsoft announced that the company will give marketers the ability to track and advertise to people who use apps on its Windows 8 and 8.1 operating system on tablets and PCs. The company will do this by assigning each user a number—a unique identifier—that monitors them across all of their apps.

 Earlier this year,Apple Inc. also began offering advertisers the ability to trail and target users through a unique ID on smartphones and tablets.

Google's plans, which the company disclosed in only the broadest of terms last month, would also make use of a unique ID.  In a statement about its efforts, the company said "technological enhancements" like an identifier could improve security "while ensuring the Web remains economically viable."

Facebook's new ad service, launched earlier this month, gets around the traditional third-party advertising cookies by doing the tracking on its own. When a person visits a website selling shoes on a work PC, a piece of Facebook code placed on that site(Facebook's own cookie) recognizes that the person has logged into Facebook using that browser before.

WSJ: Apple Shows Its Mettle Ahead of Holiday Season

  According to an article published today in the Wall Street Journal,Apple reported a third consecutive quarter of declining profits, but showed signs that both prices and profit margins are stabilizing despite heightened competition for its iPhone and iPad.
The average selling price of an iPhone declined 6.6% from a year earlier, but less than 1% from the preceding quarter.

Revenue from the iPhone rose 17% from a year earlier and represented more than half of Apple's quarterly total of $37.5 billion, which was up 4.2% from a year earlier. Apple released two new iPhones near the end of the quarter instead of one as in past years.

Those sales couldn't stem a third consecutive slide in profit from a year ago for the Cupertino, Calif., company. Profit fell nearly 9% to $7.5 billion.

But Apple offered investors encouragement by saying it expects its closely watched gross margin to stabilize. The company said its gross margin for the coming holiday quarter should be about flat with the 37% reported in the two previous quarters. 

For the current quarter, Apple said it expects its best-ever revenue of $55 billion to $58 billion, slightly higher than analysts had been projecting and as much as 6% over a year ago.

The stable profit-margin projection is a sign that the company is better managing its cost structure, in light of numerous new product releases, including new versions of the iPhone and iPad.

A flat profit margin also would be an improvement over last year, when Apple introduced new products at roughly the same time. In 2012, gross margin in the December quarter fell to 38.6%, from 40% in the September quarter.

Global smartphone shipments jumped 39% on Q3

Global smartphone shipments jumped 39 percent in the quarter ended September 30, while brisk demand for low-priced Android devices in China eroded Apple's market share.
With growth in smartphones slowing in the United States and Europe, attention has turned to technology-hungry consumers in developing countries, many of whom favor devices that are less expensive than Apple's iPhones.

Apple's profit and margins slid despite selling 33.8 million iPhones in its September quarter, and greater China revenue climbed just 6 percent even though two smartphone models hit store shelves in its second-largest market last month.

Samsung Electronics increased its global smartphone market share 0.4 percentage points to 31.4 percent in the quarter compared to a year ago. Its 40.5 percent increase in shipments was driven more by its low-end mass market smartphones than its flagship models like the Galaxy S4 and Note 3, IDC said.

In the September quarter, Apple's smartphone market share declined 1.3 percentage points to 13.1 percent.

Huawei, Lenovo and LG, which all sell mass market products, grew at a faster percentage rate than Samsung and Apple although their shipments were smaller.

Huawei, Lenovo and LG Electronics each expanded their market share by about 1 percentage point, bringing each one's market share to nearly 5 percent.

Source: Reuters

Construction on China-U.S. nuclear security center begins

Construction on a nuclear security center jointly financed by China and the United States began in Beijing on Tuesday.

Construction of the Center of Excellence on Nuclear Security is scheduled to be completed by 2015, according to Wang Yiren, vice chairman of the China Atomic Energy Authority (CAEA).

Located in the Changyang science and technology park in the southwestern outskirts of Beijing, the center will be equipped with environmental labs, response force exercise facilities, test sites for physical protection, and buildings for technology display and training, experiments and scientific research.

The center is designed to become a regional center that will serve as a platform for training and technological exchanges.

The center, an idea originally put forward by former Chinese President Hu Jintao in April 2010 during the Washington Nuclear Security Summit, will bolster nuclear security capacities in China and throughout Asia, Wang said.

China and the U.S. signed a memorandum of understanding to set up the center during Hu's state visit to Washington in January 2011.

CAEA chairman Ma Xingrui and U.S. Secretary of Energy Ernest J. Moniz were present at Tuesday's groundbreaking ceremony.

Source: Xinhua

U.S. consumer spending gauge rises, but confidence weakens

A gauge of U.S. consumer spending rose in September as Americans likely snapped up Apple's new iPhone and bought leisure goods, but falling car sales pointed to sluggish economic growth.

And even the signs of strength could be short-lived as other data on Tuesday showed consumer confidence tumbled in October as a partial government shutdown rattled households.

With lawmakers still to agree on a budget, economists fear another damaging fight might be in the cards early next year.

Excluding automobiles, gasoline and building materials,retail sales increased 0.5 percent last month after a 0.2 percent gain in August, the Commerce Department said.

This so-called core sales gauge corresponds most closely with the consumer spending component of gross domestic product. Economists polled by Reuters had expected core retail sales to increase 0.4 percent in September.

Spending has been supported by rising home and share prices, and low gasoline prices. But even against that positive backdrop, weak consumer morale could crimp future sales growth.

In a separate report, the Conference Board, an industry group, said its index of consumer sentiment dropped to a six-month low of 71.2 in October from 80.2 in September.

The survey also showed a deterioration in households' perceptions of the labour market in October, which suggests hiring may have slowed.

Source: Reuters

Should retail investor consider "industrials"

Many investment experts are telling retail investors to consider industrials.
The category, which goes by investor shorthand ‘industrials’, includes aircraft manufacturers, railroad companies, trucking operations and heavy equipment makers. When economies are in a downturn, their sales lag and their stocks do, too — but their shares outperform the market when economies are booming.
The world’s gross domestic product — the monetary value of all the goods and services that countries produce — is expected to expand by about 3.6% in 2014. That is the biggest gain since 2010 and many investment experts are telling retail investors that now might be a good time to jump into the industrial sector.
There are several reasons why the industrial sector outperforms in improving markets, but the main driver comes down to basic economics. When companies that need industrial products are doing well, they’re more willing to spend money on equipment. That translates into sales and profits for industrials.
Investors have already missed out on some strong gains, as global industrials are up 22% year-to-date, according to MSCI. It’s highly possible that the sector won’t match those returns next year, but Russ Koesterich, BlackRock’s San Francisco-based chief investment strategist still thinks the industry will outperform the broader market.

Consider looking at companies in Europe and Japan, said Koesterich. The European market, in general, is cheaper than the US. And Japan’s economy is accelerating again after several years of little growth.

While Beesley director of global equities at Henderson Global Investors,said he also thinks European-based industrials offer good value, he focuses more where companies sell their products, rather than where they are headquartered. With emerging market growth slowing, he is partial to companies that sell into North America, Europe and Japan.

Swedish truck manufacturer AB Volvo is a good example, he said. It is based in Sweden, but most of its business is being done in the US, Latin America and other parts of Europe.

“That spread of revenues is important,” he said.

Source: BBC

JetBlue discount carrier reports Q3 increased earnings of 58%

      According to the Wall Street Journal ,"JetBlue reported its third-quarter earnings rose 58% and the U.S. discount carrier also unveiled changes in plans to improve its fleet to more closely align with demand and reduce costs".

"The company has continued to expand by increasing capacity and adding new destinations. JetBlue reiterated its 2013 capacity growth projection for the year of 5.5% to 7.5%.

JetBlue has tweaked its model over the years, in many ways becoming more like a full-service carrier. It added a frequent-flier plan, began overseas flights to the Caribbean and northern Latin America, added rows of coach seats with more legroom that are sold for higher fares, instituted a fee for the second checked bag and has plans to add premium seats.

JetBlue reported a profit of $71 million, or 21 cents a share, up from $45 million, or 14 cents a share, a year earlier. Revenue increased 10% to $1.44 billion. Analysts polled by Thomson Reuters recently expected $1.44 billion.

Passenger revenue per available seat mile, which is an important measure of performance for the industry, improved by 5.4%.

Passenger traffic rose 5.4% and capacity grew 5.1%. The percentage of seats filled—or load factor—was up at 85% from 84.8%".

Dutch Rabobank Reaches $1 Billion Libor Settlement

  According to an article published today on the Wall Street Journal,"authorities around the world accused Rabobank of participating in a widespread scheme to manipulate benchmark interest rates, reaching a roughly $1 billion settlement with the Dutch lender to resolve the allegations''.

''The settlement—with U.S., British, Dutch and Japanese regulators and prosecutors—makes Rabobank the fifth financial institution to resolve allegations that its employees tried to manipulate the London interbank offered rate, or Libor, and other benchmarks. The penalty is the second-largest to date, reflecting what authorities say is Rabobank's extensive role in attempted manipulation of rates that underpin trillions of dollars of financial contracts world-wide".

"As part of Tuesday's settlement, Rabobank entered into a deferred prosecution agreement with the U.S. Justice Department—a black eye for a bank with major U.S. retail-banking operations, but less severe than a guilty plea that some other banks have entered in recent Libor cases".

India´s Central Bank raises interest rate

India's central bank raised its key lending rate by a quarter of a percentage point to 7.75%, saying that it expects inflation to remain high for the rest of the fiscal year through March.

Source: WSJ

FTSE ends higher after U.K. data

The FTSE ultimately ended the session higher, albeit marginally, tracking some modest gains on the S&P 500 in the US and despite some less-than-impressive data ahead of the Federal Reserve's two-day meeting which begins tomorrow. 

The Fed is expected to announce after the meeting that it will keep its monthly $85bn bond buying programme unchanged and maintain the interest rate at 0.25%. Economists predict the Fed will hold off on a tapering of quantitative easing until March 2014.

In the UK, helping stocks inch higher was the news consumer credit rose in October for the first time since the recession, boosted by an improvement in confidence. According to a study by the EY ITEM Club, consumers are more prepared to take on credit than they have been in the five years since the crisis, helping to drive the economy towards improvement. The news indicates confidence in job security and UK economic prospects as a whole.

Also providing a boost was the announcement that average UK asking house prices rose 0.5% in October on the previous month, boosted by higher buyer demand and a decline in the supply of houses. Hometrack, the property tracking firm, said Monday that the increase matched that seen in September, and represents the ninth monthly climb in prices. On the year, average prices were up 3.1%, up from 2.4% the prior month. 

Begbies Traynor reported a decline in levels of 'critical' financial distress amongst UK businesses. The group's Red Flag Alert research, which looks at UK corporate financial health, saw a 2% fall in the number of businesses experiencing this level of financial trouble, which follows a 9% decline in the previous quarter. 

UBS profits slide, risk assets high ahead of stress test

Swiss banking group UBS's third-quarter operating profits fell by almost two thirds as European Central Bank regulatory stress tests loomed. 

The Zurich-based behemoth also delayed a key target by one year as its level of off-balance sheet, risk-weighted assets were higher than its targets. 

UBS's third-quarter adjusted profit before tax of 484m Swiss francs was down 65% on the same period last year and down 51% on the previous quarter in what the company said was a "challenging environment". 

UBS said it remained "the best-capitalized bank in its peer group" and that its Basel III fully applied Common Equity Tier 1 (CET1) ratio increased to 11.9%" the group said, referring to the amount of core equity balancing its total risk-weighted assets (RWA).

However, the group's Basel III fully applied RWA was down 8.4% to 219bn Swiss francs, below the bank's 2013 and 2015 targets.

Group Chief Executive Officer Sergio Ermotti said: "Our results this quarter provide more evidence that our business model works in a variety of market conditions. One year into the acceleration of our strategy we are ahead of plan on execution."

However, the bank said that the Swiss regulator, Finma, had at the end of the quarter demanded it hold more capital temporarily through a temporary 50% add-on to its operational risk-related RWA.

Starting in the fourth quarter of 2013, UBS expected this temporary add-on to result in additional operational risk-related RWA of approximately 28bn Swiss francs, which it estimated would reduce its fully applied Basel III CET1 ratios by 130 basis points. 

However, as UBS expected the exercise of the Swiss National Bank's 'StabFund' stability fund option would add around 100 basis points to its fully applied ratio in the fourth quarter, creating a net effect of a 30 point reduction.

Source: LiveCharts

U.S. Retail sales fell -0.1% in September

Retail sales in September were not good at the headline level but were positive at the core level. Retail sales slipped 0.1 percent in September, following a 0.2 percent rise in August (previously up 0.2 percent). Analysts projected no change for September. Autos fell 2.2 percent after a 0.7 percent rebound in August. Retail sales excluding autos gained 0.4 percent after nudging up 0.1 percent in August. The August figure posted slightly higher than the median forecast for a 0.3 percent increase. Gasoline sales were unchanged in September, following a 0.3 percent decline the month before. Excluding both autos and gasoline components, sales gained 0.4 percent, following a 0.1 percent rise in August. Expectations were for a 0.3 percent advance.

Within the core, gains were led by food & beverage stores, food services & drinking places, and electronics & appliance stores. Importantly, some of the components show improved discretionary spending. Also positive were furniture & home furnishings, building material & garden equipment, health & personal care, sporting goods & hobby & etc., general merchandise, and nonstore retailers. 

On the downside were miscellaneous store retailers and clothing & accessory stores.

Auto sales have been volatile on a monthly basis due in part to off and on discounts by manufacturers but the level is healthy. And gasoline sales have been weighed down by prices recently. However, core sales over the last three months have been moderately healthy despite glum consumer sentiment. Apparently, consumers have to spend even if they are in a bad mood.

U.S. PPI -0.1%, consensus expected 0.2% gain

Producer price inflation eased at the headline level but firmed a bit at the core. The September producer price index declined 0.1 percent after rising 0.3 percent in August. The consensus called for a 0.2 percent gain. The core rate, which excludes both food and energy, firmed to 0.1 percent after no change in August. The market forecast was for a 0.1 percent increase.

Food prices fell 1.0 percent in September after jumping 0.6 percent the month before. Energy increased 0.5 percent, following a surge of 0.8 percent in August. Gasoline prices dipped 0.1 percent after spiking 2.6 percent in August. 

A 0.6 percent increase in prices for motor vehicles led the advance in the finished core index.

For the overall PPI, the year-ago rate decelerated to 0.3 percent from 1.4 percent in August (seasonally adjusted). The core rate held steady at 1.2 percent in September. On a not seasonally adjusted basis for September, the year-ago headline PPI was up 0.3 percent, while the core was up 1.2 percent.

Inflation at the producer level remains very soft, leaving the Fed plenty of room to keep quantitative easing in place.

Source: Bloomberg

Deutsche Bank Q3 earnings well below forecast

Deutsche Bank is leading fallers on the benchmark DAX-30 after reporting earnings that fell well below analysts' expectations. 

Third quarter net income fell 94% to €41m, well below the €430m consensus estimate. Pre-tax profit plummeted 98% to €18m, leagues away from the €642m analyst forecast. 

Deutsche Bank said in the statement that income was "impacted by significant litigation charges", with legal provisions rising by €1.2bn. The German bank added that "we expect the litigation environment to continue to be challenging". Unlike rival financial institutions such as Barclays, RBS or UBS, Deutsche Bank has yet to settle accusations of rigging benchmark interest rates.

Source: LiveCharts

France's Business Confudence Slightily less than Forecast

French statistics Institute INSEE's business confidence index for the month of October remained unchanged at 85.0.

The consensus estimate was for a small move higher to 86.0.

The largest change amongst the survey's sub-indices was seen in the gauge for past price rises, which fell to -6 from +2.

The gauge for unemployment expectations moved lower, to 42 from 49 in the month before. 

Respondents' evaluation of their past financial situation worsened to -36 from -33. 

The sub-index measuring their future  ability to save improved to +2 from -5. 

Source: LiveCharts

Standard Chartered reports rise in operating profits

Standard Chartered reported a slight increase in operating profit for the year-to-date due to tight cost controls.

In a trading update for the nine months ended September 30th, the financial services company said it delivered a strong performance despite an uncertain market environment.

Analysts at Credit Suisse pointed out that full year underlying group profit before tax was annualising at circa $7.7bn - compared to its estimate of $8.0bn - with "low single digit" nine-month revenue growth compared to the broker's 5% growth expectation.

Consumer Banking saw income grow at a mid-single digit percentage for the year-to-date, as third quarter income registered a single digit decline. 

By product, income in mortgages rose by a double digit pace year-on-year during the period, income in credit cards and personal loans rose by a high single digit rate and Wealth Management income rose by a mid-single digit percentage (impacted by market volatility, Goldman Sachs points out).

In Wholesale Banking, client income also grew at a mid-single digit rate for the year-to-date, with strong volumes offsetting a lower margin environment than 2012. 

However, an ongoing weakness in Own Account income and continued market uncertainty weighed on performance. Own Account Income dropped by a double digit percentage rate year-on-year in these nine months. Asset and Liability management income is off by around 20% year-on-year and Principal Finance revenues decreased by $140m or 40% year-to-date.

Costs were well controlled and rose in line with income in the year-to-date, despite significant increases in regulatory and compliance costs, and continued investment in the businesses.

Total credit impairments in the third quarter were below the first half run rate, at less than $300m, although it was higher than a year ago by some tens of millions of dollars. 
It reflects continued elevated loan impairment levels in Consumer Banking and limited impairment in Wholesale Banking.

"In the third quarter, we delivered a resilient performance despite an uncertain macro environment, with continued strong levels of client activity and good volumes across many of our markets," said Chief Executive Officer Peter Sands.

"Our diversity by market, product and industry has underpinned our performance in the quarter, as has our ongoing tight control of costs and risk."

Commenting on the results analysts at Goldman Sachs said that: "The statement highlights low single digit income growth (impacted by adverse currency movements, margin compression and lower own account income), good cost control [...]

"We view these trends as somewhat soft relative to guidance at the time of the interim results of broadly flat jaws for fiscal year 2013 and income growth below a double digit pace but still 'at a good rate'. Overall, we expect the shares to under-perform slightly on the back of today's release," the analysts added.

Source: LiveCharts

BP RAISES DIVIDEND AS OIL GIANT REPORTS THIRD QUARTER

Oil giant BP has raised its dividend 5.6 per cent to 9.5 cents a share after third quarter earnings fell less than expected. 

Profit adjusted for one-time items and inventory changes declined to $3.7bn from $5bn a year earlier, beating the $3.4bn forecast.

The decline reflected reduced income from its Russian business.

The company said it will sell a further $10bn of assets by the end of 2015 and give most of the proceeds to shareholders, favouring buybacks.

BP has already sold $38bn of assets to pay for the Gulf of Mexico oil spill of 2010. 

However, asset sales have become frequent in the sector due to rising costs and falling oil prices. 

Including the impact of the Gulf of Mexico oil spill, net cash provided by operating activities for the quarter and nine months was $6.3bn and $15.7bn respectively, compared with $6.2bn and $14.1bn a year ago.

Net debt at the end of the quarter was $20.1bn, down from $31.3bn last year.

Investec reiterated a 'hold' rating and a target price of 450p.

"The stockmarket doesn't want the oil majors to spend money. Instead, investors want their cash back," according to Investec analyst Neill Morton.

"And BP has obliged this morning, with an increase in the dividend, a new $10bn disposal programme (with proceeds going to share buybacks) and indicated flat capex in 2014. The bull case for 2014 is that operational gearing could surprise on the upside. The downside is that this could yet be overshadowed by the Macondo legal fallout. Hold retained."

Source: LiveCharts