“The main purpose of the stock market is to make fools of as many men as possible.” ― Bernard M. Baruch

1. China GDP Grew 6.9%, Slowest Pace Since 2009 — China’s economy grew 6.9% in the third quarter from a year ago, beating forecasts for 6.8% growth, but decelerating to its slowest pace since the global financial crisis. The results add to doubts the country can meet its year-end GDP target of about 7%, and raises pressure on Beijing to roll out more stimulus measures following a summer stock market plunge and devaluation of the yuan.
2. ECB. Holds Interest Rates Steady — the European Central Bank (ECB) also left unchanged its economic stimulus program, but said it would review its impact on the eurozone economy in December. Grounds for extending QE would include deflation risks, slowing growth in China and stock market volatility.
3. Deadline for the “Debt-Ceiling” Must Be Raised By Nov. 3 — Treasury Secretary Jacob Lew is concerned that “last-minute brinkmanship” in Congress could lead to a legislative “accident” in which lawmakers would fail to raise the debt ceiling before a Nov. 3 deadline. The standoff is bubbling through financial markets as investors limit their exposure to Treasury bills that mature in November, pushing yields to levels last seen two years ago, when Congress went through a similar episode.
4. Hedge Fund Losses Swell Continue Into September — per Hedge Fund Research, hedge funds suffered their largest quarterly loss in assets since the financial crisis during the three months that ended in September. The third-quarter saw the average fund lose 3.9% driven by slowing growth in China, sliding commodities prices and a likely U.S. Fed rate hike that sent stocks tumbling. Well known Hedgefunds such as Bill Ackman’s Pershing Square (OTCPK:PSHZF) has now fallen 12.6% for the year, while David Einhorn’s Greenlight Capital (NASDAQ:GLRE) is down 17% YTD.
5. China’s Central Bank Cuts Rates for 6th Time Since Nov — the People’s Bank of China (PBOC) cut rates for the 6th time in less than a year and relaxed reserve requirements yet again. Growth has flagged in the world’s No. 2 economy. China has pursued its most aggressive policy easing cycle this year since the 2008/09 global financial crisis, as policymakers seek to invigorate an economy beset by weak demand and excessive industrial capacity.

The week ahead — Economic data from Econoday.com: