“I made my money by selling too soon & never lost money by turning a profit” Bernard Baruch

1. China growth slows — China’s Q3 GDP rose 9.1% Y/Y, shy of expectations for 9.3%, and down from 9.5% in Q2. Though the numbers are relatively healthy, it marks the country’s slowest growth since 2009 and raises concerns that the eurozone debt crisis and general global malaise are taking their toll on China’s momentum.
2. New Mortgage Plan Floated by the government — State and federal officials are pushing a plan that could help some “underwater” borrowers get refinancing assistance in the latest government bid to break a legal impasse with big banks over alleged foreclosure abuses and ease problems in the housing market. The proposal was raised in a meeting last week between government negotiators and giant lenders as part of an effort to settle allegations of questionable foreclosure practices.
3. Lack of liquidity spooks traders — according to the WSJ, Hedge-fund traders and other professional investors are finding that a lack of liquidity is making it increasingly difficult to trade individual stocks without causing large price swings.
4. Country YTD performance — below is the chart of 78 countries performance courtesy of the Bespoke Investment Group.

5. Draft Proposes Fast, Flexible Bailout Fund — A draft of the guidelines seen by The Wall Street Journal outlines how the €440 billion ($605.44 billion) European Financial Stability Facility would implement the basic principles agreed by European leaders at the July 21 summit. The guidelines provide the EFSF with the ability to purchase sovereign debt directly from countries issuing new bonds or on the open market.
6. Citigroup settles with the SEC — Citigroup (C) will pay $285M to settle charges brought by the SEC that it misled investors in its sale of a mortgage bond deal. The SEC had been investigating whether Citigroup misled investors in the deal, a CDO created from other CDOs backed by subprime mortgages.

The week ahead — Economic data from Econoday.com:

“Never pay the slightest attention to what a company president ever says about his stock. “Bernard Baruch

1. Dexia bank rescued — Dexia agreed to the nationalization of its Belgian retail bank and secured 90 billion euros ($121 billion) in state guarantees, in a rescue that raises pressure on other euro zone countries to strengthen their banks.
2. Greece likely to get aid tranche in November — Greece is likely to receive an 8 billion euro ($10.9 billion) tranche of aid in early November from its international lenders. This allows the troubled euro-zone nation to avert a near-term default.
3. Senate OKs bill pressuring China over yuan — the Senate approved a bill that would allow new duties on goods from China and other countries that lawmakers say manipulate their currencies.
4. Obama’s jobs bill falls in the Senate — as expected, the Senate late yesterday blocked consideration of President Obama’s $447B jobs plan, with the chamber voting 50-49 in favor of advancing the package, well short of the 60 needed to overcome procedural hurdles.
5. China Export Growth Dwindles to Slowest Pace in Seven Months as Yuan Gains — China ‘s Exports rose a less-than-forecast 17.1 percent in September from a year earlier, the bureau’s data showed in Beijing. The trade surplus was $14.51 billion, the smallest since May. Growth in shipments to Europe, China’s biggest export market, slumped to 9.8 percent, from 22 percent, amid the sovereign-debt crisis in euro-region nations.
6. Fitch Ratings downgraded UBS AG and placed seven other U.S. and European banks on credit watch negative — The ratings agency lowered UBS’s long-term issuer default rating to A from A+. Fitch is also reviewing ratings for Barclays Bank Plc BARCBB.UL, BNP Paribas (BNPP.PA), Credit Suisse Group AG (CSGN.VX), Deutsche Bank AG (DBKGn.DE), Societe Generale SOGNNY.UL, Bank of America Corp (BAC.N), Morgan Stanley (MS.N) and Goldman Sachs Group Inc (GS.N) for further possible downgrades.
7. G20 finance chiefs meet as S&P downgrades Spain — Spain is once again the center of attention after S&P downgraded the country’s long-term debt to “AA-” from “AA” following a similar move from Fitch last week.

The week ahead — Economic data from Econoday.com:

“A speculator is a man who observes the future, and acts before it occurs”. Bernard Baruch

1. Greece will miss deficit targets — the Greek cabinet approved the draft 2012 budget and will present it to parliament; However, but while the government agreed to an additional €6.6B ($8.8B) of austerity measures demanded by the troika, the country won’t meet its deficit target this year. Greece’s 2011 deficit is now expected to be 8.5% of GDP vs. its 7.6% target; for 2012, the deficit is set to fall to 6.8%, still above the 6.5% target.
2. China says U.S. yuan bill may spark trade war — China criticized a U.S. Senate decision to move ahead with a bill designed to pressure Beijing on its currency policy, saying the move fosters distrust and could spark a trade war.
3. Moody’s Downgrades Italy — the ratings agency cut Italy’s sovereign debt by 3 notches to A2 with a negative outlook.
4. Q3 key ETFs performance — below is the table depicting 3Q 2011 performance of selected ETFs courtesy of the Bespoke Investment Group.

5. EU’s President wants coordinated bank recapitalization — the European Union’s executive proposed coordinated recapitalization of banks as the bloc’s regulators met to review capital buffers of stressed lenders.
6. AAII Bullish Sentiment Rises
7. Fitch downgrades Italian, Spanish debt ratings — The Fitch agency downgraded its sovereign credit rating for Italy and Spain on Friday and said its long-term outlook for both countries was negative, citing high debt and poor prospects for growth.
Separately, Fitch also said it was keeping Portugal’s debt rating on watch for a possible downgrade, with a decision due by the end of the year.

The week ahead — Economic data from Econoday.com:

“The market is better at predicting news than the news at predicting the market” — Gerald Loeb.

1. Multi-trillion plan to save the eurozone being prepared — reported by The Telegraph European officials are working on a grand plan to restore confidence in the single currency area that would involve a massive bank recapitalisation, giving the bail-out fund several trillion euros of firepower, and a possible Greek default.
2. Senate approves budget stop-gap — the Senate approved, in a 79-12 vote, stop-gap measures to fund the government for an additional six weeks and avert a shutdown. It also approved, on a voice vote, a one-week extension to give the House time to consider the funding bill; House approval is expected.
3. German parliament approves expanded EU bailout fund — Chancellor Merkel achieved her majority after intense lobbying. A large majority in the German parliament has approved expanded powers for the EU’s main bailout fund. All 17 countries that use the euro must ratify the commitment to expand the powers of the EFSF and boost its bailout guarantees to 440bn euros (£383bn). So far, 10 have approved the measure.
4. Italy and Spain extended their bans on short-selling due to ongoing volatility, according to European regulator ESMA — Italy extended until Nov. 11, while Spain didn’t set a date, saying its decision was based on “protracted instability in European securities markets.”
5. Justice Department probing Chinese accounting — The U.S. Justice Department is investigating accounting irregularities at Chinese companies listed on U.S. stock exchanges, said an official with the Securities and Exchange Commission, suggesting criminal charges may be brought in addition to civil proceedings.

The week ahead — Economic data from Econoday.com: