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19Oct2015 Pre-Market Commentary: U.S. Stock Futures Sliding Along With Oil, Investors Continuing Worries Of China GDP Slipping And Worsening Third Quarter Financial's

Written by Gary

U.S. stock future indexes are down this morning as oil prices slide, China's economic growth slipped below 7 percent and Morgan Stanley's results drop 42 percent sending shares sinking $1.85, or 5 percent, to $32.10 in pre-market trading.

Fears that China, the world's largest energy consumer, and signs that global oversupply is curbing Saudi crude exports has risen caution flags in the investment community.

Here is the current market situation from CNN Money

European markets are mixed. The DAX is higher by 0.18%, while the FTSE 100 is leading the CAC 40 lower. They are down 0.62% and 0.35% respectively.

What Is Moving the Markets

Here are the headlines moving the markets.

Halliburton revenue misses on weak drilling in North America

(Reuters) - Halliburton Co , the world's No.2 oilfield services provider, reported a bigger-than-expected 36 percent drop in quarterly revenue, hurt by weak drilling activity and pricing in North America.

Morgan Stanley quarterly profit drops 42 percent, shares plunge

(Reuters) - Wall Street bank Morgan Stanley reported a quarterly profit that fell far short of market expectations, capping a generally downbeat quarter for big U.S. banks after investors fled the bond, currency and commodity markets.

European stocks rise as China growth numbers ease concerns

LONDON (Reuters) - European stocks climbed on Monday after Chinese economic growth data came in slightly better than expected, allaying months of concerns over the slowdown in the world's second-largest economy.

Oil prices slip below $50 on Chinese demand concerns

LONDON (Reuters) - Oil prices fell on Monday on concerns about the pace of economic growth in China, the world's largest energy consumer, and signs that global oversupply is curbing Saudi crude exports.

Strong dermatology product sales help Valeant top estimates

(Reuters) - Valeant Pharmaceuticals International Inc , which is under fire for massive price hikes of its two heart drugs, reported a better-than-expected quarterly profit, boosted mainly by strong performance in its U.S. dermatology business.

Stock futures fall after China data, Morgan Stanley results

(Reuters) - U.S. stock index futures were slightly down on Monday after data showed that China's economic growth slipped below 7 percent for the first time since the global financial crisis and Morgan Stanley reported a slump in quarterly profit.

Hasbro profit beats on higher sales of toys for boys

(Reuters) - Hasbro Inc reported a better-than-expected quarterly profit as toys based on "Star Wars" and "Jurassic World" movie series boosted sales of its toys targeted at boys.

China economy logs weakest growth since 2009

BEIJING (Reuters) - China's economic growth dipped below 7 percent for the first time since the global financial crisis on Monday, hurt partly by cooling investment, raising pressure on Beijing to further cut interest rates and take other measures to stoke activity.

Green financing has hobbled home sales in California

(Reuters) - An innovative, government-sponsored program aimed at funding energy-saving home improvements has drawn praise from powerful supporters, including President Obama. But complaints from a growing number of homeowners, lenders and realtors in California suggest the financing is making homes more difficult to sell and disrupting the mortgage market.

Frontrunning: October 19

Great News: China’s GDP Growth Beats Forecasts as Stimulus Supports Spending (BBG)

Oh wait, maybe not: China GDP: Deflategate Comes to Beijing (WSJ)

Actually, definitely not: Shanghai rebar falls to record low after weak China GDP (Reuters)

But who cares: European Shares Gain on Earnings as Bonds Drop, Metals Decline (BBG)

Amid Slumping Economy, Canada’s Stephen Harper Braces for Tight Election Race (WSJ)

Syrian rebels say receive more weapons for Aleppo battle (Reuters)

Chinese Copper-Trading Surge Shakes Up Market (WSJ)

The ETF Whale Blamed for Moving Japanese Markets Gets Reeled In (BBG)

First Blackrock, now Blackstone: NYC's Stuyvesant Town Said for Sale With Blackstone Weighing Bid (BBG)

ECB Heads to Malta Meeting as More QE Seen a Matter of Time (

Morgan Stanley Q3 Earnings Crash, Revenues Miss By $1.2 Billion; Volatility And Burst Chinese Stock Bubble Blamed

While the big TBTF banks managed to hide much of their ugly balance sheet exposure, and prevent it from hitting the income statement in Q3 as reported previously, while covering up prop trading losses as well as they possibly could, the banks without trillions in deposits were less able to do so: first it was Jefferies, then Goldman posted its worst quarter in years, and now here comes the bank also known as Margin Stanley, which moments ago reported Q3 EPS of $0.34, which even if adjusted for various "one-time" items, at $0.48, not only missed consensus of $0.63 wildly, but it also missed the lowest range of the estimate range ($0.53-$0.70).

Q3 Net Income, on an apples to apples basis ex DVA, was a paltry $740 million, nearly $1 billion lower than Q2, and down 44% from the $1.4 billion a year ago.

The driver: a collapse in revenue, which at $7.3 billion non-GAAP and $7.8 billion as reported, was the lowest top-line print since 2012.

Not surprisingly, the biggest pain was again in Institutional Securities, as trading and liquidity ground to a halt in a quarter in which the CBOE literally had no idea what the VIX was for half an hour on August 24. The culprit, as usual, FICC: $583MM, which reported revenues down from $997MM. This was somewhat offset by Equity Sales: $1.8 billion, which were unchanged froim a year ago.

Overall, Investment Banking at $1.3 billion was down 15% from a year ago, while Trading plunged 17% to $2 billion.

Curiously, the biggest reason for the tumble had nothing to do with trading and everything to do with Investment Management, where revenue crashed 59% to $274 million. According to the company, "net revenues of $274 million decreased from $667 ...

Morgan Stanley Disappoints on Trading Revenue

Morgan Stanley’s bid to make its earnings less prone to market swings sputtered in the third quarter after drops in the trading and private-equity businesses led the New York firm to miss analysts’ estimates.

Big Banks to U.S.'s Companies: We Don't Want Your Cash

Banks are going to new lengths to fend off a surprising threat to their financial well-being: large cash deposits made by financial companies.

Deutsche Bank Shakes Up Management Amid Restructuring

Deutsche Bank AG announced sweeping changes to its senior management ranks and a broad restructuring of key units Sunday as new co-CEO John Cryan put his stamp on the giant German lender.

Reframing The Debate About Payday Lending

from Liberty Street Economics

-- this post authored by Robert DeYoung, Ronald J. Mann, Donald P. Morgan, and Michael R. Strain

Except for the ten to twelve million people who use them every year, just about everybody hates payday loans. Their detractors include many law professors, consumer advocates, members of the clergy, journalists, policymakers, and even the President! But is all the enmity justified?

Early Headlines: China GDP Declines, Dollar Crushing Earnings, US Debt:GDP Is "Normal", London Housing Boom, Life At Chernobyl And More

Written by John Lounsbury

Early Bird Headlines 19 October 2015

Econintersect: Here are some of the headlines we found to help you start your day. For more headlines see our afternoon feature for GEI members, What We Read Today, which has many more headlines and a number of article discussions to keep you abreast of what we have found interesting.


Capitol Report: Investor advocates protest to SEC proposals limiting disclosure

Investors have voiced complaints to the Securities and Exchange Commission about a proposal to change the threshold for corporate disclosure.

Metals Stocks: Gold futures extend retreat from 4-month high

Gold futures drop on Monday, pulling back further from a four-month high as analysts blame speculators locking in profits after the recent run-up.

Market Extra: Wall Street is consistently wrong about the Fed's intentions

The market is currently pricing in the first interest-rate hike in March 2016. But if history serves as a guide, the market is probably wrong.

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