Financial Markets Close

Manufacturing in the NY region shrank more than forecast in September, with the index dropping to -10.41 (signaling contraction) from -5.85 in August as orders shrank. The median forecast called for -2.

The ECB plans to boost oversight of trading in repos by setting up a transactions database on a push by regulators to control “shadow-banking.” These regulations target “key actors” in the shadow-banking system, particularly money market mutual funds, which have risks to their liquidity. These can be one of several shadow-banking activities used to evade the global clampdown on excessive risk-taking.

China-Japan tensions threatened a trade relationship worth $340 billion. Toyota, Honda, and Panasonic all reported damage to their operations in China as a result of boycotts and protestors damaging property. The China Automobile Dealers association stated that the protests will hurt Toyota, Honda, and Nissan more than the March 2011 Japanese earthquake.

Equities:
DJIA: 13,533 (-0.3%)
S&P500: 1,461 (-0.3%)
Nasdaq: 3,179 (-0.17%)
EuroStoxx: -0.42%
Nikkei: +1.83%
Hang Seng: +0.14%

Stocks down deadlock during euro-area debt crisis talks discussed below, and poor Empire Manufacturing numbers.

Apple stock surpassed $700/share in after hours trading as the first-day orders for the new iPhone sold 2 million units in the first-day orders, more than double the record set by the 4S. The stock has advanced 73% this year.

Time Warner Cable announces its plan to sell its 46.4 million shares of Clearwire Corp. Time Warner spent $550 million for its Clearwire stake in 2008 on hops to fund a WiMax network to offer 4G. The joint venture with Sprint has struggled to gain subscribers, prompting Comcast and Time Warner Cable to switch over to Verizon. The shares are worth $71.5 million today. Comcast still owns its 88.5 million shares in Clearwire. Clearwire stock dropped $0.08 to $1.54, and its 12% coupon bond maturing in 12/1/15 reached a 1 year high in price at 100.625.

Credit:
iBoxx IG: 120.11 (+0.3%)
iBoxx HY: 93.8 (-0.1%)
CDX IG S18 5Y: 85.23 (+2.7%)
CDX HY S18 5Y: 101.89 (-0.4%)

Commodities:
WTI Crude: 96.62 (-2.4%)
Nat Gas: -2.65%
Copper: -0.05%
Corn: -4.35%

FX:
EURUSD: 1.3116 (-0.01%)
DXY Dollar Index: 78.9 (+0.12%)

Rates:
U.S. 10y: 1.84% (-2bp)
German 10y: 1.67% (-3bp)
Spanish 10y: 5.94% (+19bp)
Italian 10y: 5.09% (+9bp)

Spanish yields jump on the September, 14, 2012 finance ministers meeting that deadlocked over a timetable for a more unified EU banking sector, with Germany pushing back against a more ambitious plan sought by France, Spain, and Italy. The finance ministers also bickered over the terms of the bailout request and the role of the ECB.