Election Day!!
To celebrate the end (perhaps) to this once in a life-time clown show election, I found this very powerful song from when America was great, you know, a long time ago.
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Responsible message: We at PSW encourage all our readers to go out and vote if you haven't already.
Financial Markets and Economy
Don’t Worry When the Stock Market Goes Crazy After Election (Bloomberg)
That’s because regardless of how prices react on Nov. 9, next-day moves in the S&P 500 Index are useless in telling what comes after. While the index swings an average 1.5 percent the day after the vote, gains or losses over the first 24 hours predict the market’s direction 12 months later less than half the time.
China Weighs Giving Wall Street Investment Banks Greater Mainland Access (The Wall Street Journal)
HONG KONG—Beijing is considering allowing Wall Street firms to run their own investment-banking businesses on the mainland, according to people briefed on the discussions, a long-awaited step that would give them more access to China’s hard-to-crack domestic market.
German Industrial Output Drops Most in More Than Two Years (Bloomberg)
German industrial production declined the most in more than two years in September as Europe’s biggest economy ran into summer weakness.
Production, adjusted for seasonal swings, fell 1.8 percent from the previous month, when it rose a revised 3 percent, data from the Economy Ministry in Berlin showed on Tuesday.
Britain’s manufacturing sector is changing beyond all recognition (The Economist)
POLITICIANS of all stripes agree: Britain needs more manufacturing. George Osborne, the previous chancellor of the exchequer, promised that the country would be “carried aloft by the march of the makers”. To persuade Nissan and other carmakers to stay put after Britain leaves the European Union, the government has offered them “support and assurances”, including a pledge to seek tariff-free access to Europe.
In Battle of World's Biggest Oil Exchanges, One Gets Turbo Charge From Exports (Bloomberg)
In the battle for supremacy between the world’s two largest oil exchanges, one of them is enjoying a turbo charge from the U.S. government.
Traders bought and sold an average of almost 1.1 billion barrels of West Texas Intermediate crude futures each day in 2016, a surge of 35 percent from a year earlier.
OPEC Raises Oil-Demand Forecast on Outlook for Cheaper Crude (Bloomberg)
OPEC raised its forecast for global oil demand next year and through the end of the decade, anticipating that cheaper crude will spur consumption even as economic growth slows.
DR Horton beats as it sells more homes at higher prices (Reuters)
(Reuters) – D.R. Horton Inc, the largest U.S. homebuilder, reported an 18.7 percent rise in quarterly profit as it sold more homes at higher prices.
The company said it expects fiscal 2017 home sales to rise in a range of 8-13 percent.
Unsold New London Luxury-Home Glut to Reach Record on Oversupply (Bloomberg)
The number of unsold central-London homes under construction will reach a record high this year, increasing the risk that developers’ bets on rising demand for luxury properties will go sour.
Hertz Implodes After "Earnings Debacle": Shares To Open At 7 Year Low After Abysmal Results, Guidance (Zero Hedge)
Hertz stock is in freefall this morning, down some 32% in pre-market trading, after 3Q EPS and sales miss analyst estimates.
The rental-car company reported 3Q EPS of $1.58, wildly missing consensus est. $2.73 (range $2.34-$3.03), as a result of a surge in its depreciation costs, while 3Q revenue came in at $2.54 billion, below the estimate $2.59 billion.
Food Bank Use Set for Record as More Britons Turn to Charity (Bloomberg)
The number of visits to food banks run by the Trussell Trust rose to 519,342 in the six months through September from 506,369 a year earlier, the charity said on Tuesday. More than a third of the three-day emergency food packs went to children.
"China's Debt Has Grown $4.5 Trillion In Past 12 Months, More Than The US, Japan And Europe Combined" (Zero Hedge)
While concerns about China's debt load, capital flows, and depreciating currency have been pushed to the backburner in recent months, perhaps facilitated by a welcome rebound in global inflation – perceived by markets and global central bankers that monetary policy is finally working – it is worth a quick reminder of how we got here.
Worsening Conditions In Treasury Market Spell Bad News For Stocks Too (The Wall Street Examiner)
The TBAC is a committee of Primary Dealers tasked by the Fed to provide it with a quarterly forecast of how much Treasury debt will be needed to cover the deficit for the current and next quarters. It has persistently overestimated the strength of the US economy and government tax collections this year.
Cycle Indicators Show No Sign of Market Rebound – LINK CORRECTED (The Wall Street Examiner)
The market took the course of the more likely negative scenario last week, breaking support around 2095. SPX has set up a new, more sharply descending channel which could get worse. A major support level could soon be threatened, with much lower targets if it breaks down.
Companies
Pimco’s Strategy for Life After Gross: Go Beyond ‘Bonds and Burgers’ (The Wall Street Journal)
Pacific Investment Management Co. employees have fretted over what direction the money manager will take following the acrimonious exit of star investor Bill Gross and a steady stream of outflows.
Leaked documents shed light on the defunct pharmacy that brought Valeant to its knees (Business Insider)
When Valeant Pharmaceuticals' secret relationship with a pharmacy that sold its drugs directly to consumers was exposed last year, the company first tried to downplay its importance.
Valeant Cuts 2016 Forecast to Below Estimates After Big Loss (Bloomberg)
Valeant Pharmaceuticals International Inc. cut its annual profit forecast to well below estimates after posting a third-quarter loss, highlighting the major challenges the new management will have turning around the drugmaker after a tumultuous year.
Technology
New Discovery Broadens VW Emissions-Cheating Crisis (The Wall Street Journal)
BERLIN—Regulators in California recently discovered software installed on some of Volkswagen AG’s Audi models that appears to have allowed the cars to cheat carbon-dioxide emissions testing standards, according to people familiar with the matter.
“Oops, I did it again!”: Volkswagen caught cheating environmental regulations for second time (Salon)
Volkswagen is under fire again for attempting to cheat its way out of complying with environmental regulations, in the process reinforcing the importance of vigilance in holding companies accountable in order to reduce their negative impact on the environment.
Tim Long: Apple has sucked all the profit out of smartphones (Philip Elmer-DeWitt)
Well, Samsung’s share shrank to less than 1% (thanks to the meltdown of its flagship Galaxy Note 7) and big losses at LG and HTC pushed their profit shares into negative territory. Apple was beneficiary all around.
There’s an epic trailer for the Hyperloop (Holy Kaw)
Remember that “pipe dream” (get it?!) that was the Hyperloop? We haven’t heard much about it recently, but they’ve just released a trailer.
Politics
At long last, Americans decide between Clinton and Trump (Reuters)
Democrat Hillary Clinton and Republican Donald Trump face the judgment of the voters on Tuesday as millions of Americans turn out on Election Day to pick the next U.S. president and end a bruising campaign that polls said favored Clinton.
Donald Trump’s Extremist Supporters Feel Like Winners Either Way (NY Times)
His organization, the Minuteman Project, which sent volunteers, often armed, to patrol America’s southern border, was widely considered a fringe vigilante group with alarmist views about the dangers posed by Mexican immigrants.
Election Guide (via Goldman Sachs) (Ritholtz)
Trump Is Right About One Thing: 'The Economy Does Better Under The Democrats' (Capital Flows)
Since I’m an old Democrat supporting Hillary Clinton, it might surprise you to hear that I agree with Donald Trump’s top line view of the economy.
No, I don’t agree with much that he’s said since he started his 2016 presidential campaign, and recent revelations have rightly drawn opprobrium.
Media’s Next Challenge: Overcoming the Threat of Fake News (NY Times)
The last year has turned the United States into a country of information addicts who compulsively check the television, the smartphone and the good old-fashioned newspaper with a burning question.
Obama’s Successor Inherits Bond Market at Epic Turning Point (Bloomberg)
Barack Obama will go down in history as having sold more Treasuries and at lower interest rates than any U.S. president. He’s also leaving a debt burden that threatens to hamstring his successor.
Democrats see FBI controversy hurting chances in U.S. Congress races (Reuters)
Senior Democrats said on Monday their chances of winning control of the U.S. House of Representatives had been hurt by the FBI's surprise announcement last month that Hillary Clinton's email practices were again figuring in a federal investigation.
China Ousts Finance Minister as Xi Jinping Turns to Allies (The Wall Street Journal)
BEIJING—China removed its high-profile, reformist finance minister from the post in a shuffle that comes as President Xi Jinping positions trusted allies in key roles and Beijing prioritizes short-term growth over major overhauls.
China Flexes Legal Muscle to Quash Hong Kong Independence Calls (Bloomberg)
China’s top legislative body ruled that Hong Kong people who advocate independence can’t hold public office, a rare intervention designed to prevent two elected “localists” from taking their posts in a case that threatens to spark further unrest.
Swedish prosecutor says Assange interview set for November 14 (Reuters)
Julian Assange will be interviewed at Ecuador's London embassy on Nov. 14, Swedish prosecutors said on Monday, in a move that could end a long diplomatic deadlock that has seen the WikiLeaks founder holed up in the London residence since 2012.
Philadelphia transit strike ends one day before presidential election (Reuters)
A bus and rail strike in Philadelphia that had threatened to hamper voter turnout at Tuesday's U.S. presidential election has ended after workers reached a deal with the transport authority, the two sides said on Monday.
Failed vice presidential nominee, TV host and half-term Alaska governor Sarah Palin said polls deflected questions on Donald Trump’s waning Michigan electoral prospects during an interview with Fox News’ Bill O’Reilly on Sunday night.
Hong Kong lawmakers barred by Beijing from office (BBC News)
Pro-independence elected lawmakers Sixtus Leung and Yau Wai-ching have refused to pledge allegiance to Beijing when being sworn in.
Beijing has now interpreted a section of Hong Kong law to mean any official who does not swear the oath properly cannot take office, said state media.
The cost of this Congressional seat increased 23.5x in 6 years (Value Walk)
What do you think have been the best performing assets over the past several years? Perhaps it’s Facebook stock, whose price is up 3.2x since it debuted in 2012.
Or maybe Apple, whose stock has soared 4x since 2010. But neither of those companies’ stock performances holds a candle to Colorado’s sixth Congressional district.
Next President Faces a Raft of Foreign-Policy Quandaries (The Wall Street Journal)
The winner of Tuesday’s election is set to inherit one of the most complicated, high-stakes foreign-policy portfolios in a generation, with the U.S. facing rising tensions with Russia and China, a volatile Middle East, a nuclear-advancing North Korea, the spread of terrorism, a refugee crisis, and political and economic uncertainty in Europe.
Life on the Home Planet
Syrian militias make slight progress in attack on Islamic State stronghold Raqqa (Reuters)
U.S-backed Syrian armed groups have captured a number of villages in the first days of an offensive to retake the city of Raqqa from Islamic State militants, a war monitor and a Kurdish source said on Monday.
Smog Chokes Delhi, Leaving Residents ‘Cowering by Our Air Purifiers’ (NY Times)
NEW DELHI — For days, many in Delhi have been living as if under siege, trying to keep the dirty air away from their children and older parents.
But it is not easy: Open a window or a door, and the haze enters the room within seconds. Outside, the sky is white, the sun a white circle so pale that you can barely make it out.
Exoplanet hunters are missing 75 per cent of two-star worlds (New Scientist)
Planets that orbit two stars are truly, intriguingly alien – they have varied seasons, and formed under different circumstances from planets in our own solar system. They are also trickier to discover and study: unlike planets around single stars, they shift their orbital paths over just a few years.
Thousands march through Moscow for WW2 parade anniversary (Reuters)
Thousands of Russian servicemen dressed in historical uniforms marched through Moscow's Red Square on Monday to mark the 75th anniversary of the 1941 parade when Soviet soldiers headed to the front lines of World War Two.
