“Don’t try to buy at the bottom and sell at the top. It can’t be done except by liars.” — Bernard Baruch

1. Japan’s Economy Falls Into Surprise Recession — MarketWatch, a sales tax increase pushed Japan’s economy into a recession in the third quarter. Japan’s real GDP shrank 1.6% on an annualized basis as firms cut inventories and held back on capital investment. The figure marked the second quarter of contraction, after the economy shrank 7.3% in the April-June quarter after the national sales tax ticked up to 8% from 5% on April 1. Many economists consider two quarters of economic contraction to be a recession.
2. Intel Unveiled The Luxury Wearable Device for Fashion-Forward Women — via TheVerge, it features a 1.6″ OLED display, and delivers texts, e-mails, and Facebook (NASDAQ:FB)/Google (GOOG, GOOGL) notifications over AT&T’s (NYSE:T) 3G network independently of the user’s smartphone. Intel (NASDAQ:INTC) has priced the device at $495.
3. West African Mining Projects Take Hit From Ebola Crisis — WSJ, the Ebola epidemic in west Africa has led mining companies in the region to put expansion plans on hold, delaying the roll-out of jobs meant for residents of the countries hardest hit by the virus. ArcelorMittal (NYSE:MT) has delayed a $1.7B expansion at its iron ore mine in Liberia, Rio Tinto (NYSE:RIO) has stopped work on a $20B iron ore mine in Guinea, and Sierra Leone-focused London Mining filed for bankruptcy last month.
4. Alibaba To Launch International Version of Taobao Marketplace — Reuters, Jack Ma has announced that Alibaba will set up an international version of its e-commerce marketplace Taobao to serve buyers worldwide in multiple languages, including English and Chinese. Alibaba (NYSE:BABA) currently has an international e-commerce platform specializing in wholesale goods called Aliexpress but does not have an international offering for consumers to sell to each other.
5. China’s Central Bank Cuts Interest Rates — WSJ, China cut lending rates for the first time in more than two years, in an acknowledgment that its piecemeal efforts to bolster its flagging growth have failed. The People’s Bank of China lowered one-year benchmark lending rates by 40 bps to 5.6% and reduced the one-year deposit rate by 25 bps to 2.75%. China’s economic growth slowed to a five-year low of 7.3% last quarter. The last time China cut lending rates was July 2012.
6. ECB Begins Buying Asset-Backed Securities Under Private QE — The European Central Bank (ECB) has started buying asset-backed securities,in a move to encourage banks to lend and revive the economy. The program is one plank in a strategy which ECB chief Mario Draghi hopes will increase its balance sheet by up to 1 trillion euros. It already buys covered bonds, a secure form of debt often backed by property. The ABS and covered bond programs will last for at least two years.

The week ahead — Economic data from Econoday.com:

“In the business world, the rearview mirror is always clearer than the windshield.” – Warren Buffett

1. Elon Musk’s Plans Internet Satellites — WSJ, Elon Musk is working with Greg Wyler on building and launching cheap, lightweight satellites that would blanket the Earth with Internet access. Musk and Wyler are said to have “discussed launching around 700 satellites, each weighing less than 250 pounds.” The constellation would be 10x as large as Iridium’s (NASDAQ:IRDM), currently the world’s largest, and would likely cost $1B+ to finance.
2. The Fed and DOJ probing bank conduct in forex markets — Reuters, the U.S. Federal Reserve is investigating possible improper conduct in foreign exchange markets by large banking institutions. The announcement was made as global regulators fined five major banks, including UBS, HSBC and Citigroup, $3.4 billion for failing to stop their traders from trying to manipulate the foreign exchange market.
3. U.S., China to Drop Tariffs on Range of Tech Products — WSJ, the U.S. and China have reached an agreement to drop tariffs on a wide range of tech products, expanding upon their previous Information Technology Agreement at a time of strained relations. Eliminating tariffs on sales of roughly $1T, the deal would liberalize trade in more than 250 categories ranging from semiconductors to medical devices.
4. Ackman Takes Stake in Animal-Health Company Zoetis (ZTS) — WSJ, Bill Ackman’s Pershing Square has taken a $2B stake in Zoetis (NYSE:ZTS) and could push the animal-health company to sell itself to a large drug maker such as Valeant Pharmaceuticals (NYSE:VRX). The stake amounts to a roughly 10% in Zoetis, and includes an investment by fellow hedge fund Sachem Head Capital Management.
5. Sony unveils web-based TV service PlayStation Vue — Sony’s PlayStation Vue will allow users to access live TV and on-demand content without a cable or satellite service. PlayStation Vue will begin an invite-only beta preview during November for select PlayStation owners, consisting of about 75 channels, and will later offer the service to more Sony (NYSE:SNE) and non-Sony devices. The new cloud-based TV is expected to be commercially launched during the first quarter of 2015.

The week ahead — Economic data from Econoday.com:

“Rule No. 1: Never lose money. Rule No. 2: Never forget Rule No. 1.” — Warren Buffett