“The Market Can Remain Irrational Longer Than You Can Remain Solvent” — John Maynard Keynes

1. Scotland’s Plan to Stay in European Single Market — in trying to avoid the “national disaster” of a “hard Brexit,” Scotland will publish proposals for how it can remain in the European single market after Britain leaves the EU. The plans are expected to outline new and substantial powers for the devolved parliament in Edinburgh, allowing for free movement of goods, services and people.
2. IMF Leadership in Question as Lagarde Found Guilty — IMF Managing Director Christine Lagarde won’t face punishment and will keep her job, despite being convicted of negligence charges relating to a state payment made during her time as French finance minister in 2008. The court ruled that Lagarde failed to contest a €400M award to billionaire tycoon Bernard Tapie, but decided against sentencing owing to her preoccupation with the 2008-09 financial crisis and strong international reputation.
3. Apple in Talks to Manufacture in India — Apple is discussing with the Indian government the possibility of manufacturing its products in the country. In a letter last month, the company outlined its plans and sought financial incentives to move ahead, the WSJ reported. Making goods such as iPhones locally would allow Apple (NASDAQ:AAPL) to open its own stores in India, helping build its brand in a country where it has just a tiny slice of less than 5% – of a booming smartphone market.
4. Italy/World Oldest Bank Monte dei Paschi Moves Closer to Collapse — Italy’s parliament has approved a government request for a 20 billion euro rescue loan to prop up the country’s ailing banking sector, including Banca Monte dei Paschi di Siena SpA. Italy third biggest Italian lender after it warned that it would run out of cash in 4 months. Monte dei Paschi had previously said that its 10.6 billion euro ($11.5 billion) liquidity position could last for 11 months.
5. U.S. GDP Growth Revised Up to 3.5% Rate in Third Quarter — the Commerce Department said the economy expanded at a seasonally adjusted 3.5% annualized rate in the third quarter. This is above the government’s prior estimate of 3.2% due to upward revisions in consumer spending and business investment. Consumer spending, which added 2 percentage points to GDP, rose at a 3% annual rate, up from the prior estimate of 2.8%. Business investments rose at a revised 1.4% rate, much stronger than the previous estimate of a 0.1% rise. The trade sector was a big positive for growth in the third quarter. Exports spiked 10% helped by a temporary boom in U.S. soybean shipments.
6. Deutsche Bank, Credit Suisse Settle U.S. Subprime Probes — the DOJ has reached a $7.2B provisional deal with Deutsche Bank (NYSE:DB) and a $5.3B agreement in principle with Credit Suisse (NYSE:CS). Barclays (NYSE:BCS) is also feeling the heat from U.S. federal prosecutors after the British lender balked at paying the amount the government sought in negotiations.
7. S&P 500 Index Broke-out of 2-Year Trading Range — chart below shows the S&P 500 Index broke out of a 2-year consolidation. Courtesy of BIG.

The week ahead — Economic data from Econoday.com: