Comment by phil

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phil
October 24th, 2014 at 6:35 am

Good morning! 

Futures down just a bit this morning, mostly flat overnight.  16,594, 1,941, 3,992 & 1,111.60 with the Dollar at 85.95, oil $81.21 and gold $1,232.50.  Silver is $17.22, nat gas $3.59 and gasoline failed $2.20, now $2.185.  

I have CNBC on in my office and Bloomberg on in the living room and, as I go from room to room it's "Ebola, ebola, ebola, ebola…."  People are simply nuts over this thing.  

New York Doctor Tests Positive for Ebola. Craig Spencer Recently Returned to New York After Treating Ebola Patients in West Africa. A physician who had returned to New York City 10 days ago after treating Ebola patients in West Africa has tested positive for the disease, according to an official familiar with the findings. Craig Spencer, a 33-year-old physician who worked with Doctors Without Borders and lives in Upper Manhattan, is the fourth person to be diagnosed with the deadly disease in the U.S.

NYC Doctor Confirmed Positive For Ebola; Contact With Girlfriend (Quarantine) & 3 Others; "Unlikely" Contagious On Subway

Mali confirms first Ebola case

• Mali has confirmed its first case of Ebola, becoming the sixth West African country to report a case of the virus.
• The patient, a 2-year-old girl who had come from neighboring Guinea, was brought to a hospital in the Malian town of Kayes.
• Mali is Africa’s third-largest gold producer.

Asia was down a bit except Nikkie, up 1% – all finished at day's lows.

China local debt fix hangs on Beijing's wishful thinking. China is asserting control over once-chaotic local government financing by banning the use of opaque funding vehicles, but filling the gap with a huge expansion of the fledgling municipal bond market will raise a whole new set of problems. 

China launches World Bank rival

• China's $50B Asian Infrastructure Investment Bank launched today, as the U.S. said it had concerns about the new rival to Western-dominated multilateral lenders, such as the World Bank.
• The new infrastructure bank aims to give project loans to developing nations.
• "We have concerns about the ambiguous nature of the AIIB proposal as it currently stands, that we have also expressed publicly," says State Department spokeswoman Jen Psaki.

Europe opened low but came back a bit and now down 0.25%ish into lunch.  

40% Of Eurozone Banks Are In Bad Shape

Friday's economic calendar

• 10:00 New Home Sales

Based on Ebola and the upcoming stress tests, I'd have to guess a sell-off is coming today.  Shorting /ES at 1,940 (tight stops, of course) and the Dow (/YM) at 16,600 are a lot safer than shorting /TF at 1,100 but all good lines to use and watch.  /NQ already failed 4,000.  

Global banks ready for Fed tests

• Thirty-one banks are set to participate in the Fed's 2015 stress tests, which will see how they can withstand pressures such as a spike in oil prices, a rise in the U.S. unemployment rate or an increase in risky corporate loans. The capital plans are due in January.
• Among the bank's that failed last year's tests are Citigroup (NYSE:C), HSBC (NYSE:HSBC), Santander (NYSE:SAN) and RBS (NYSE:RBS).
• Deutsche Bank (NYSE:DB) will participate for the first time, and has already felt pressure from the NY Fed, which has told it in a private letter that its regulatory reports were "low quality, inaccurate and unreliable".
• This Sunday, the ECB will release results for stress tests of 130 eurozone banks amid a deteriorating economic outlook for the region.

Van Hoisington And The Fed's Bubble: "Overtrading" And "Discredit" Always End In "Revulsion"

A Furious Albert Edwards Lashes Out At Central Bankers: "Will These Morons Ever Learn?

GM Financial receives second subpoena into subprime auto lending. GM Financial, the in-house financing arm of General Motors Co, said on Thursday it received subpoenas in September from state attorneys general and other authorities over its subprime auto lending and securitization practices.

Toyota next to sell Tesla shares

• Toyota (NYSE:TM) is now the next automaker to sell a stake in Tesla (NASDAQ:TSLA), although it did not disclose the timing or amount of the sale.
• Daimler unloaded its remaining 4% stake in the electric car earlier in the week for $780M.
• Toyota invested $50M in Tesla in May 2010 (giving it a 2.5% stake at the time), ahead of the company's IPO in June that year.

Pfizer(PFE) Announces Eye-Popping $11 Billion Share Buyback Plan

Lockheed receives $4B order for eighth batch of F-35s

• Lockheed Martin (NYSE:LMT) and U.S. defense officials have reached agreement on the terms of a contract worth about $4B for an eighth batch of 43 F-35 fighter jets, Reuters reports.
• The new contract lowers the cost of the jets by about 3%,
• Both sides had expected to reach a deal early in the summer, but negotiations slowed after an engine failure in June grounded the entire F-35 fleet for weeks.
• LMT +0.6% premarket

Microsoft(MSFT) earnings beat, cloud business soars. (video) The tech firm handed in earnings of 54 cents per share on revenue of $23.20 billion, beating Wall Street estimates of 49 cents per share on revenue of $22.02 billion, according to a consensus estimate from Thomson Reuters.

Wall Street may finally be giving up on Amazon(AMZN). (video) The company posted a huge earnings miss for its third quarter on Thursday, reporting a loss of 95 cents a share versus the street's estimate of 74 cents. And that big miss may be the last straw for investors, analysts said. ?

Why Amazon Is Crashing: Jeff Bezos' Nightmare Quarters In Charts

Amazon pressed over media growth, international numbers on CC

• "Can you tell us or remind us what financial measures are important to you guys … it's a little hard to see any of them making positive progress," asked Wolfe Research's Aram Rubinson during Amazon's (NASDAQ:AMZN) Q3 CC (transcript), just one of several pointed questions offered.
• Bernstein's Carlos Kirjner asked about weak international margins – international op. loss rose to $224M from $28M a year ago – and why international's growth (14%) has fallen far behind North America's (25%). CFO Tom Szkutak (again) chalked up Amazon's losses to growth investments, and gave little detail about growth other than to state it "has been softer across a number of geographies."
• BGC's Colin Gillis asked why North American media growth (+5%) was the lowest in years. Szkutak mentioned Amazon is seeing a demand shift from textbook purchases to rentals (could be a positive for CHGG), and that heavy discounting last year made for tough comps.
• Total media revenue rose 4% to $5.2B vs. 10% in Q2, and total electronics/general merchandise revenue 26% to $14B vs. 27% in Q2. North American "Other" revenue (mostly AWS) rose 40% to $1.34B, and returned to positive Q/Q growth (15%) followinghuge price cuts earlier in 2014.
• Other details: 1) $170M in charges were taken, largely related to the slumping Fire Phone. 2) Paid unit growth was 21% vs. 23% in Q2, and 3rd-party sellers made up 42% of units vs. 41%. 3) Gross margin rose 120 bps Y/Y to 28.9%. 4) Fulfillment, tech/content and marketing spend respectively rose to 12.4%, 10.8%, and 4.7% of revenue from 11.5%, 9.2%, and 3.9% a year ago.
• Shares finished AH trading down 10.7%, making new 52-week lows along the way. Not factoring post-earnings estimate revisions, they now trade for 1.2x 2015E sales.
• Q3 results, guidance/details, PR

Here's the story of US Earnings in two charts: