Daily Scan: Oil slumps more than 4%; earnings take center stage as stocks rally 7th session

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    Updated throughout the day

    October 12

    Enough already about this Federal Reserve dithering. Time to worry about earnings. Last week, Alcoa launched the earnings reporting season with dismal news. Expectations are low for the season — which could prove positive for stocks. Tighten your seatbelt Tuesday for some biggies: Intel, JPMorgan, Johnson & Johnson, and CSX Corp. Later in the week we will get more heavyweights, including Goldman Sachs, Netflix, Bank of America, Wells Fargo, and Delta Air. Did we mention BlackRock, Schwab, or Citigroup? Busy, busy, busy. U.S. stocks closed higher in dull action but still notched a seventh consecutive day of gains. Banks and bond trading were closed for Columbus Day.

    Here’s what else you need to know:

    Fortress Investments to shutter lead fund after major losses. Head trader Michael Novogratz is reportedly on his way out. The fund has posted losses of 17.5% through September. The fund now has $1.6 billion in assets, down from $8 billion in 2007. Wall Street Journal (paywall)

    Oil hit by OPEC production. Sweet crude futures for November fell 4.41% while Brent tumbled nearly 4.5%. It was the biggest one-day drop since Sep 1. OPEC output rose 109,000 barrels/day in September to 31.57 million. That news overshadowed an earlier forecast that U.S. production would drop in 2016. MarketWatch

    AB Inbev hikes bid for SABMiller to $103 billion. They say the fourth time is the charm. AB Inbev has been wooing the No. 2 brewer for weeks. Apparently, when it announced its bid last week of  $99.2 billion, the jilted suitor thought board members representing SABMiller family stakeholders were in favor of the deal. Wrong! Wall Street Journal (paywall)

    Dennis Lockhart whistling the same tune. The Atlanta Fed president continues to say that the U.S. is ready for an interest rate hike this year. Lockhart is considered a good gauge on central bank thinking. WBP Online

    European stocks lower, breaking winning streak. The Stoxx Europe 600 was marginally lower. The FTSE was off 0.77%, breaking a nine-session series of up sessions. Rolls Royce Holdings fell more than 4% after the Financial Times reported that regulators were investigating some of its contracts. MarketWatch

    Dell to buy EMC in $67 billion deal, a tech record. The PC maker has gone through a total makeover, going private two years ago and now taking on a mountain of debt to acquire the storage giant. An announcement is expected Monday. New York Times (paywall)

    GE said to be in talks with Wells Fargo to sell $30 billion loan portfolio. GE has been on a tear to return to its industrial roots. Reuters

    Enough already, move! Central bankers at the annual meeting of the International Monetary Fund in Lima, Peru, told the Federal Reserve to raise rates, already. “’Delaying the increase would not solve the situation,’ said Sukhdave Singh, deputy governor of Bank Negara Malaysia.” They probably didn’t read that Goldman Sachs report.  Wall Street Journal (paywall)

    Don’t touch those rates! Reminder: The International Monetary Fund has urged the Fed to hold steady on interest rates — global growth is too weak to merit an increase. New York Times (paywall) 

    Deflation, the elephant in the room. Barron’s contributing editor Jim McTague writes on his blog that deflation is the thing no one wants to talk about at the Fed: “Deflation is evident in many places in our  economy. The buyout of older, high-paid employees by companies is an effort to reduce payrolls so that they can compete with startups and foreign competitors enjoying  lower human capital outlays.  Home prices in may sections of the country have not recovered from the Great Recession, owing to slack demand caused by weaker incomes.  The National Federation of Retailers this week said that their members this holiday season will have to grapple with deflation.  They will have to offer prices in 2015 lower than in 2014 to loosen consumer dollars.” LinkedIn

    Oil rises again on lower rig count. U.S. rig count fell for the fifth straight week. WTI gained 0.5% and Brent crude climbed 0.8%. MarketWatch

    Apple blocking news app in mainland China. Even users who bought their iPhones in the U.S. can’t access Apple News. Quartz

    Turkey blaming Islamic state for bomb that killed up to 128. A pair of suicide bombers disrupted a pro-Kurdish demonstration in Ankara. The Turkish government said the attack would not delay elections slated for November. Reuters

    Iran tests new long-range missle. The surface-to-surface weapon called Emad can reach Israel and has “precise control.” The test could throw a wrench into the nuclear agreement recently reached with six nations. Iran’s parliament approved the general structure of the deal on Sunday. Wall Street Journal (paywall)

    Hillary Clinton to claim center stage in first Democratic debate.  A total of five candidates will be squaring off on Tuesday. Can anyone out there name all five candidates? CNN

    China rallies on stimulus promise. The People’s Bank of China said it would extend a pilot relending program. The Shanghai Composite surged 3.28%, while the Shenzhen Composite climbed 4.18%. The Hang Seng Index gained 1.21%. Japan was closed for a national holiday.

    The prancing horse launches its IPO. After delaying its vaunted subsidiary’s offering earlier this year, Fiat Chrysler Automobiles announced that Ferrari has just launched its long-awaited IPO. The offering will see 17,175,000 of the prancing horse’s shares sold to the public, each valued between $48 and $52 per share. Fiat Chrysler Automobiles

    Kuroda: “Inflation dynamics is as we anticipated.” Bank of Japan Governor Haruhiko Kuroda dashed all hopes for an uptick in QE Monday. Kuroda told CNBC the bank can turn up monetary policy whenever necessary but “at this moment the inflation dynamics is as we anticipated.” The central banker also said  “unless oil prices decline further, the negative impact from oil will eventually dissipate, fade out, disappear and then 1 percent inflation is quite likely to come.” CNBC

    PBOC: Market “correction” almost over. PBOC deputy governor Yi Gang, speaking at the IMF and World Bank meeting in Peru, was quoted saying that after several rounds of “corrections,” the Chinese stock market rout is “almost over.” Foreign and local investors, scrambling to take their capital elsewhere, missed the memo. Reuters

    Glencore to sell Chilean, Australian copper mines. The shares had halted trading in Hong Kong ahead of the announcement. Glencore is down 55% for the year; the mining and commodities giant is struggling to reduce $30 billion in debt. Last week, Glencore announced plans to dramatically reduce its zinc production. BBC

    You wont believe this…

    China opens Communist Party theme park. The Red Army has never looked this cute. CNN

    Photo: John St. John