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November 6, 2013

Key Market Trends Nov. 6, 2013

By Emann Charts


SAN FRANCISCO (MarketWatch) — Tesla Motors Inc. reported third-quarter adjusted earnings and revenue that beat Wall Street’s expectations, but deliveries failed to meet some analysts’ expectations and shares dropped 12% in the after-hours trading session Tuesday.

Twenty-First Century Fox Inc. shares also fell as its quarterly earnings came in a bit short of analysts’ expectations and Abercrombie & Fitch Co.’s stock lost ground after the retailer reported a decline in same-store sales. See MarketWatch’s Earnings Wall.

Eurozone unemployment stuck until 2015, warns European commission

The European commission is warning that it is too early to claim victory in the euro area's fight against recession after its latest forecasts showed it would be 2015 before weak growth generated a fall in the jobless total.

Although the 17-nation single currency zone started to expand in the summer after a six-quarter double-dip recession, Brussels said there will be a lag before the pickup in activity leads to a fall in unemployment.


Google executive chairman Eric Schmidt is not a fan of Microsoft, and isn’t at all afraid of the rise of social media. In a recent speech, Schmidt also explained the move into cloud computing would fuel the rise of their Android operating system and Chrome browser, in detriment of the PC and Microsoft. Finally, the former chief executive of internet giant criticized the government for the NSA leaks, asking for less surveillance and telling the crowd to fight for freedom of speech and their own rights, omitting Google’s involvement in censorship in China and spying at home.


The bank bail-in rumble is growing louder. After the events in Cyprus, a small country and potentially meaningless in the eyes of most people, it seems that bail-in idea has spread like a virus across the Western world.
Only in the last week, we saw the following developments:


"Amount has more than doubled to 826 tons in the first nine months of the year"

You'd never know it from the tone of a Bloomberg news story on China's latest gold import figures from Hong Kong, but demand for bullion there remains at staggeringly high levels.

Net imports in September totaled 109.4 metric tons, down slightly from 110.2 in August, according to data from the Hong Kong Census and Statistics Department.


The revelations come amid high tension in the Middle East, with US, British, and French warship poised for missile strikes in Syria. Iran has threatened to retaliate.

The strategic jitters pushed Brent crude prices to a five-month high of $112 a barrel. “We are only one incident away from a serious oil spike. The market is a lot tighter than people think,” said Chris Skrebowski, editor of Petroleum Review.


We have witnessed a stunning drain of gold from the GLD ETF trust. Through last Friday, an incredible 479 tonnes - more than 35% - of GLD's gold has been removed and has disappeared, most likely to Asia - in the space of about 10 months. The biggest chunk of that 479 tonnes was removed shortly after Germany's Bundesbank issued it's feeble and hopeless request to the U.S. that the Federal Reserve start shipping back some portion of the 1500 tonnes of gold that is supposedly being "safe-kept" on behalf of Germany by the Fed in its vault in New York City. Gold luck, Angela...


The Treasury is expected to clamp down on trust schemes used by wealthy families to shield their estates from inheritance tax. Currently, this tax applies to the value of an estate of more than £325,000 – or £650,000 for couples.

The trusts are established to effectively remove assets from their owners' estates while they are alive so that, on their death, tax does not apply. Many different assets can be held in a trust, including property, financial assets such as shares and insurance policies that will pay out on death.


Millions of people could qualify for federal subsidies that will pay the entire monthly cost of some health care plans being offered in the online marketplaces set up under President Obama's health care law, a surprising figure that has not garnered much attention, in part because the zero-premium plans come with serious trade-offs.


Russia has started building the world’s largest universal nuclear-powered icebreaker capable of navigating in the Arctic and in the shallow waters of Siberian rivers. The unique vessel will further increase Russia’s dominance in the region.

The 173m ship is being built by the Baltiysky Zavod shipyard in St Petersburg, and is planned to be completed by 2017. Once finished the ship will be 14 meters longer and 4 meters wider than the current record holder, “50 year Victory” that is 159 meters long and 30 meters wide.


Global stock markets are soaring and near record highs. Credit markets are exuberant and near record tight spreads and low yields; and volatility (bond, FX, and stock) has been suppressed to the point of non-existence. So why is it that just 3 months after Nigeria issued debt (in an oversubscribed auction) at a yield below that of Portugal's, Nigerian lender Diamond Bank has suspended the launch of its seven-year $550 million bond?It appears it's the Fed's fault! as the bond's marketers noted "pricing turbulence in the international debt market," in a presentation seen by Reuters on Tuesday. Still think the Fed will ever actually exit?


At Hong Tiek Hian, the oldest temple in Surabaya, built centuries ago by Tartar troops, a puppeteer and the player of a traditional erhu instrument are modestly performing a traditional Chinese theater.

But there is no audience in the temple, not a single spectator. Both artists are “performing for God,” they say.


Gold retailers in Dubai are expecting to see their sales surge by 50 per cent this week as the five-day Diwali festival of lights continues this week. Gulf News reports that retailers are posting 25 to 100 per cent increases in business so far. Thank a 25 per cent fall in gold prices this year and a 10-15 per cent tax on gold by the Indian Government.


Britain’s services sector enjoyed its strongest growth since 1997 as new business flowed in at a record pace last month, according to the latest survey to suggest the recovery is strengthening.

The closely watched Markit/CIPS UK services PMI beat City forecasts to jump to a headline activity reading of 62.5 in October, from 60.6 in September. The forecast was for a slight slowdown to 59.8.


China’s richest man, Wang Jianlin, bought Picasso’s painting of his young children, Claude and Paloma, for $28.2 million at Christie’s in New York yesterday, the auction house said.

Estimated at $9 million to $12 million, the 1950 canvas led an otherwise lackluster evening sale of art dealer Jan Krugier’s collection.


The inhabitants of the desert kingdom of Saudi Arabia are not renowned for their sense of humour. In a country where public executions by beheading are commonplace, and even relatively minor transgressions such as drinking alcohol can be punished by the lash, the kingdom’s all-powerful religious police do not engender an atmosphere of levity.


The standup comedian Charlie Callas had a routine where he played a U.S. cavalry scout after the Civil War, reporting to his commanding officer that “I have traveled to the north, south, east and west, and I can assure that there isn’t a single Indian within a hundred mi —.” Then he would make a whizzing sound and stab himself with an arrow.



The views and opinions expressed herein are the author's own, and do not necessarily reflect those of EconMatters.

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Item Reviewed: Key Market Trends Nov. 6, 2013 Rating: 5 Reviewed By: EconMatters