“There is only one side of the market and it is not the bull side or the bear side, but the right side.” – Jesse Livermore

1. Bank of England (BOE) Keeps Rates Steady — the majority of the Bank of England’s Monetary Policy Committee remains against raising interest rates, voting 7-2 to maintain a record low rate of 0.5%, minutes from the October 7-8 meeting show. The minutes said that for most members, there remained “insufficient evidence” of inflationary pressure to raise rates.
2. GT Advanced, Apple in Deal for ‘Amicable’ Split-Up — WSJ, Apple and GT Advanced have agreed to wind down Apple’s (NASDAQ:AAPL) Mesa, AZ plant, once expected to provide sapphire that would be used to protect millions of Apple device screens. The plant’s sapphire furnaces (owned/operated by GT) will be sold and some of the proceeds used to pay down GT’s (NASDAQ:GTAT) debt to Apple. The deal suggests Apple will be turning to 3rd-party sapphire suppliers to obtain cover glass for the Apple Watch, which is set to ship in early 2015.
3. Tekmira starts limited manufacturing of therapeutic for Ebola — Reuters, Tekmira has begun limited manufacturing of a therapeutic part of its TKM-Ebola program, which will be available by early December. The company’s investigational new drug application to U.S. regulators for TKM-Ebola remains on partial clinical hold, although U.S. and Canadian regulators authorized its use last month for patients who have confirmed or suspected infections from the deadly virus. Also, Johnson & Johnson (JNJ) will begin testing an Ebola vaccine on humans in January, and plans to have 250K doses of the experimental vaccine ready for use in clinical trials in May.
4. U.S. regulators expand number of vehicles affected by Takata airbag problem recalls — Reuters, the NHTSA has expanded its warning about faulty airbags made by Takata (OTCPK:TKTDY) to 6.1M U.S. vehicles. “The National Highway Traffic Safety Administration urges owners of certain Toyota (NYSE:TM), Honda (NYSE:HMC), Mazda (OTCPK:MZDAY), BMW (OTCPK:BAMXY), Nissan (OTCPK:NSANY), Mitsubishi (OTC:MMTOY), Subaru (OTCPK:FUJHY), Chrysler (NYSE:FCAU), Ford (NYSE:F) and General Motors (NYSE:GM) vehicles to act immediately on recall notices to replace defective Takata airbags,”.
5. China GDP Growth Rate Is Slowest in Five Years —WSJ, China’s economic growth slowed in the third quarter to its weakest in more than five years as it battled a slumping real-estate market and weak domestic demand and industrial production. The world’s second-largest economy grew 7.3% between July and September from a year earlier, slightly above the 7.2% forecast by analysts but slowing from 7.5% in Q2.
6. New York Doctor Tests Positive for Ebola — WSJ, A NYC doctor, who returned to New York ten days ago after treating Ebola patients in West Africa, has tested positive for the virus. Meanwhile, Mali has confirmed its first case of Ebola, becoming the sixth West African country to report a case of the virus.

The week ahead — Economic data from Econoday.com:

“I think it was a long step forward in my trading education when I realized at last that when old Mr. Partridge kept on telling other customers, “Well, you know this is a bull market!” he really meant to tell them that the big money was not in the individual fluctuations but in the main movements-that is, not in reading the tape but in sizing up the entire market and its trend.” – Jesse Livermore

1. China consumer inflation cools to near 5-year lows — CNBC, Chinese inflation dropped to an almost five-year low in September, tumbling to 1.6% on year from 2% in August and coming in below consensus of 1.7%. Factory gate prices (PPI) slumped 1.8% vs -1.2% previously. “You got falling oil prices, falling house prices, excess capacity in the industry and an appreciating currency,” says BNP economist Richard Iley.
2. Second health-care worker tests positive for Ebola in Texas — a second healthcare worker has contracted ebola in the U.S. The worker, a staff member at Texas Health Presbyterian Hospital, was among those who looked after Thomas Duncan, who died of the virus earlier this month. The CDC also asked 132 people who flew with that infected woman on a Frontier Airlines flight from Cleveland to Dallas on last Monday to call the federal Centers for Disease Control.
3. S&P 500 Sector at nearly 3 standard deviations below its 50-day moving average — courtesy of BIG, the index has now clearly broken its uptrend channel hasn’t been this oversold in more than two years. The S&P500 Index now trade at nearly 3 standard deviations below its 50-day moving average.

4. 13 Ohio nurses are being monitored for Ebola — MarketWatch, nurses from Ohio on the same flight with a Dallas nurse diagnosed with Ebola have been placed on paid leave while their health is being checked daily for possible symptoms. “We learned that Cleveland Clinic and The MetroHealth System had employees–mostly nurses–aboard the Frontier flight from Dallas to Cleveland on October 10, returning from a nursing conference in Texas,” the health systems said in a joint statement.

The week ahead — Economic data from Econoday.com:

“In bear markets, stocks usually open strong and close weak. In bull markets, they tend to open weak and close strong.” – William J. O’Neill

1. Hewlett-Packard Plans to Break in Two — WSJ, H-P (NYSE:HPQ) plans to spin off its PC and printer ops into a separate publicly-traded company. If the H-P (NYSE:HPQ) division goes off as planned, it would give rise to two publicly traded companies, each with more than $50B in annual revenue.
2. First Ebola case Transmitted in Spain — a nurse in Spain became the first person to contract Ebola after treating a Spanish missionary flown in from Sierra Leone. The priest died Sept. 25. Furthermore, the Obama administration has called for new protocols to help stop the spread of Ebola, including additional passenger screening at airports and increased efforts to educate medical providers on how to handle cases.
3. Symantec is in “advanced talks” to split its security and storage software operations — Bloomberg a source adds the post-breakup companies could draw M&A interest, given firms such as EMC (NYSE:EMC) and H-P (NYSE:HPQ) have shown interest in one half or the other. Symantec’s (NASDAQ:SYMC) two security software units, enterprise security and PC/mobile security, respectively grew 3% and 1% Y/Y in calendar Q2, while its storage software unit grew 1%. The security units accounted for 63% of revenue and 80% of segment operating profit.
4. David Darst (Advisor to Morgan Stanley) Shows a Useful Bear Market and Healthy Correction Checklists — via video from CNBC. Click here for link

“This can be very difficult because admitting that the wrong trade was executed (or the right trade, but at the wrong time) is admitting that you were wrong. It is human nature to not like being wrong.” — unknown

1. Pioneer Natural Resources plans to double US oil exports in 2015 — Reuters, Pioneer Natural Resources (NYSE:PXD) expects to double its U.S. exports of condensate to 50K barrels per day next year. The U.S. shale resources explorer, along with Enterprise Product Partners (NYSE:EPD), received permits in June to export the ultra-light oil, after the country eased its 40-year ban on oil exports. Pioneer (NYSE:PXD) sells condensate from its Eagle Ford shale site to Enterprise, which markets the oil to foreign buyers.
2. NiSource to separate into two publicly traded companies — NiSource Inc (NYSE:NI) announced its board had approved plans to split into two publicly traded companies, separating its utilities and pipeline businesses. NiSource plans to list its natural gas pipeline division as Columbia Pipeline Group, which is expected to trade on the NYSE under the ticker “COLP.”
3. Hong Kong Protests Swell as Demonstrators Press Demands — Protestors continue to block many central roads and highways in Hong Kong, as pro-democracy demonstrations extend into their fifth day. Leaders have now issued a warning that the standoff would escalate in coming days if their demands aren’t met. The number of protestors have swelled into the tens of thousands, calling for Chief Executive Leung Chun-ying to resign and for the government in Beijing to drop plans to control the 2017 leadership election.
4. U.S. poised to become the world’s largest oil producer — FT, US oil output likely to exceed Saudi Arabia’s this month or next for the first time since 1991. U.S. production of oil and related liquids such as ethane and propane was level with Saudi Arabia in June and again in August at about 11.5M barrels a day, according to the International Energy Agency. U.S. crude production in August was still lower than both Saudi Arabia and Russia.
5. CDC confirms first case of Ebola in US— The Centers for Disease Control and Prevention has confirmed that a patient being treated at a Dallas hospital has tested positive for Ebola, the first case diagnosed in the U.S. The patient was placed under strict isolation, and CDC and Texas health officials are working to identify and monitor anyone who may have come into contact with the patient. Ebola is known to be incurable. Currently, there are a few pharma companies working on vaccines, drugs and other treatments for Ebola. These are Glaxo (GSK), Tekmira (TKMR), BioCryst (BCRX) and Sarepta (SRPT).
6. Pimco Total Return Fund outflows estimated at $23.5B in September — Pimco’s flagship Total Return Fund saw an estimated $23.5 billion in outflows in September as longtime Chief Investment Officer Bill Gross announced last week that he left for Janus Capital Group. This means the fund saw a drain of more than 10 percent of its total net assets in one month, according to data from Morningstar, which assessed it at $221.61 billion as of Aug. 31.
7. Exxon sees some disruption from Ebola outbreak — Reuters, Exxon Mobil is one of the first major U.S. companies to address the business impact of the Ebola outbreak in west Africa, with CEO Rex Tillerson announcing that the company is delaying plans to start offshore drilling in some areas. Exxon Mobil (NYSE:XOM) acquired an 80% stake in an oil prospect off the coast of Liberia last year, and has spent more than a year planning and preparing to drill there.

The week ahead — Economic data from Econoday.com: