Ebola Strikes Back

Economic Data

- (CL) Chile Sept PPI M/M: -0.7% v -0.1% prior

- (BR) Brazil Sept Current Account Balance (BRL): -$7.9B v -$7.0Be; Foreign Direct Investment (FDI): $4.2B v $3.8Be

- (BE) Belgium Oct Business Confidence-6.8 v -7.9e

- (MX) Mexico Aug Economic Activity Index Y/Y: 1.3% v 2.3%e

- (US) Sept New Home Sales: 467K v 470Ke

Markets are choppy this morning as traders digest the New York City Ebola scare, EU bank stress test results and tons of major earnings reports. Note that comments by ECB President Draghi at the EU Leader Summit in Brussels seem to have helped lift US equities out of the red mid morning. As of writing, the DJIA is up 0.34%, the S&P500 is up 0.22% and the Nasdaq is up 0.32%.

US new home sales rose to a six-year high in September, according to the report out this morning. The August sales - the prior six-year high - were revised much lower, down to 466K from 504K prior. Prices continue to fall. Homebuilders are trading lower on the news, with most major names down one or two percent this morning.

Press reports out in the US premarket suggested that 25 banks out of 130 reviewed would fail ECB capital stress tests. More importantly, only 10 of them still face capital shortfalls. The latter group are talking with the ECB on how they plan to ameliorate the situation. This figure is slightly lower than reports out earlier this week.

Financial media have obsessively dissected Amazon's third-quarter results this morning and reiterated longstanding arguments about whether the firm is a brilliant growth machine or just a big loss-making Ponzi scheme. Analysts from Janney Capital and Cowen cut Amazon to neutral, while other firms raised price targets and reiterated outperform ratings. One firm said the record loss was due mostly for the big writedown for Amazon's Fire Phone flop. AMZN is down more than 7% this morning.

Consumer staple Proctor & Gamble cleaned up nicely in quarterly numbers out this morning. Proctor's first quarter results met expectations, although revenue growth was limp. P&G also confirmed that it would check out of the Duracell business by creating a stand-alone company, via a spin-off to shareholders or possibly other options. Analysts note that the unit has been on the block for years and the company has had a hard time generating interest in a sale. Competitor Colgate is looking tarnished after the firm warned FX issues cut deeply in the quarter and forced the firm to reduce its full-year guidance. CL is in the red, while PG is up 3%.

Among the biggest gainers is Edwards Lifesciences, which crushed consensus expectations and hiked its FY14 guidance. EW is up nearly 10%. Agrium is up 8% after ValueAct disclosed a 5.7% stake. Lions Gate is up 7.5% on press reports thtat Alibaba Chairman Ma may buy Chairman Rachesky's 37.4% stake. Microsoft had gained around 4% in after-hours trading on excellent first-quarter results, although MSFT has given up around half its gains in cash trading.

Looking Ahead

- Ratings agencies may publish changes in sovereign ratings on Austria, Cyprus, Germany, Italy, Spain or Russia today after the EU close

- (EU) ECB's Draghi speaks at EU Leader Summit in Brussels

- 12:00 (FR) France Sept Net Change in Jobseekers: +5.9Ke v -11.1K prior; Total Jobseekers: 3.419Me v 3.413M prior

- (PT) Portugal Year-to-Date Budget Report