TheChek News Flow

Asian Market Update: China GDP edges above consensus but still slows to 5-year low; Apple posts strong earnings

***Economic Data*** - (CN) CHINA Q3 REAL GDP Q/Q: 1.9% V 1.8%E; Y/Y: 7.3% (5 1/2 year low) V 7.2%E; GDP YTD Y/Y: 7.4% V 7.4%E - (CN) CHINA SEPT INDUSTRIAL PRODUCTION Y/Y: 8.0% V 7.5%E; INDUSTRIAL PRODUCTION YTD Y/Y: 8.5% V 8.4%E - (CN) CHINA SEPT RETAIL SALES Y/Y: 11.6% (multi-year low) V 11.7%E; RETAIL SALES YTD Y/Y: 12.0% V 12.1%E - (CN) CHINA SEPT YTD FIXED URBAN ASSETS: 16.1% V 16.3%E (multi-year low) - (NZ) NEW ZEALAND SEPT CREDIT CARD SPENDING M/M: 0.2% V 0.7% PRIOR; Y/Y: 4.4% V 4.2% PRIOR - (NZ) NEW ZEALAND SEPT NET MIGRATION: 4.7K V 4.7K PRIOR - (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index w/w: 111.6 v 113.8 prior - (US) NORTH AMERICA SEPT SEMI BOOK/BILL RATIO: 0.94 V 1.04 PRIOR (first time below parity in a year)

***Index Snapshot (as of 02:30 GMT)*** - Nikkei225 -0.7%, S&P/ASX +0.3%, Kospi -0.5%, Shanghai Composite -0.2%, Hang Seng +0.3%, Dec S&P500 -0.2% at 1,895

***Commodities/Fixed Income*** - Dec gold +0.1% at $1,246, Dec crude oil flat at $82.01/brl, Dec copper +0.1% at $2.99/lb - (CN) PBoC to drain CNY20B in 14-day repos (23rd consecutive drain); Offer yield at 3.4% (unchanged from previous yield) - GLD: SPDR Gold Trust ETF daily holdings fall 8.9 tonnes to 752.0 tonnes; Lowest level since Nov 2008 - JGB: (JP) Japan's MoF sells ¥1.09T in 1.4% (1.4% prior) 20-year JGBs; Avg yield: 1.318% v 1.435% prior; bid-to-cover: 3.59x v 3.89x prior

***Market Focal Points/Key Themes/FX*** - China Q3 GDP and industrial output narrowly beat consensus forecasts, while retail sales and fixed asset investment missed. Moreover, retail sales, fixed asset, and GDP prints still marked multi-year lows, as China continues to rebalance the economy. Power generation component was up just 4.1% y/y, steel output was flat, while crude oil production rose 9% despite the lower prices. China Stats Bureau said slower GDP was the result of high base in 2013, with employment and inflation situation remaining stable. Mixed Chinese data prints still generally yielded a slight uptick in risk-on assets - Dec WTI crude was up over 30c above $82.15/brl, while AUD and NZD rallied against the dollar by about 30pips to $0.8815 and $0.7915 highs respectively entering the afternoon session in Asia.

- RBA meeting minutes broke little new ground, much like the policy statement released earlier this month. Of note, the central bank reiterated AUD remains overvalued given the slide in commodity prices, while adding that only modest growth persisted through Q3.

- ADRs of Petrobras sold off by over 1% in extended session after Brazil Datafolha Poll showed Pres Rousseff opening up a 3pt lead on pro-business challenger Neves following weekend debates. Runoff election is scheduled for Oct 26th.

- USD remained under pressure across the other majors, tracking renewed strength in US treasuries. The yield on the 10-yr note is down 3bps at 2.16%, while USD/JPY is off 40pips around ¥106.50 and EUR/USD is up 25pips above $1.2810.

***Equities*** US markets: - ILMN: Reports Q3 $0.77 v $0.56e, R$481M v $451Me; +9.4% afterhours - WERN: Reports Q3 $0.36 v $0.36e, R$552.0M v $543Me; guides FY14 capex higher $210-230M vs $150-200M prior; +4.6% afterhours - CE: Reports Q3 $1.61 (adj) v $1.44e, R$1.77B v $1.74Be; raises FY14 EPS to $5.55-5.65 v $5.32e; +4.5% afterhours - ABBV: Announces $5B stock repurchase program (approx 5.8% of market cap); increases quarterly dividend by 17% to $0.49/shr (3.6% implied yield); +2.1% afterhours - STLD: Reports Q3 $0.47 v $0.43e, R$2.34B v $2.12Be; +1.9% afterhours - AAPL: Reports Q4 $1.42 v $1.30e, R$42.1B v $40.0Be; +1.5% afterhours - TXN: Reports Q3 $0.76 v $0.71e, R$3.50B v $3.46Be; +1.3% afterhours - CDNS: Reports Q3 $0.26 v $0.24e, R$400.5M v $397Me; +1.1% afterhours - MPW: Agrees to $1B in new real estate investments; accretive to FFO by $0.09-0.12/shr; +1.0% afterhours - UPS: To increase avg shipping rates by 4.9%; effective Dec 29th; +0.5% afterhours

- ZION: Reports Q3 $0.40 v $0.44e, R$532.9M v $545Me; -0.9% afterhours - TOT: CEO killed in a business jet crash at Moscow Vnukovo Airport - Russian press; -1.1% afterhours - CMG: Reports Q3 $4.15 v $3.86e, R$1.08B v $1.05Be; -4.3% afterhours

Notable movers by sector: - Consumer Discretionary: Gome 493.HK +3.2% (9M guidance); Chiyoda 8185.JP +3.1% (share repurchase plan); Gree Inc 3632.JP +4.3% (joint gaming development plans) - Financials: China Merchants Property Dev 000024.CN -2.2% (Q3 results); Nippon Accommodations Fund 3226.JP +2.4% (H1 results); Haseko Corp 1808.JP +1.3% (press report on H1 results) - Materials: Anhui Conch Cement 914.HK +1.4% (Q3 results); St Barbara Ltd SBM.AU +3.6% (Q1 production results) - Industrials: Shanghai Electric 2727.HK -4.7% (Q3 results); Macquarie Atlas Roads MQA.AU +4.5% (Q3 results) - Technology: Samsung Electronics 005930.KR -1.6% (positive Q4 Apple results) - Telecom: China Mobile 941.HK -1.1% (9-month results)

Total chief dies in Moscow air crash

Christophe de Margerie, chief executive of French oil group Total, died in the early hours of Tuesday morning when a private jet he was travelling in crashed near Moscow. According to Russian media reports, the landing gear on the light business jet hit a snow-clearing machine at the city’s Vnukovo airport. The pilot attempted to turn the aircraft round while an engine was on fire but the jet crashed on the runway, killing Mr de Margerie – the head of Europe’s third-largest oil company – and the three crew members on board. The driver of the snow-removal machine also died. Debris from the aircraft was scattered up to 200 metres from the crash site, according to reports by local media but not confirmed by the company. The tragedy follows a period of heightened tensions between Russia and the west over Ukraine, with Total’s joint venture with Russia’s Lukoil to explore shale oil in Siberia scuppered by western sanctions. Mr de Margerie has been sympathetic to Russia and a defender of Total’s interests in the region. In a recent interview with the Financial Times he struck an upbeat note, saying that "it was not the first time there was a crisis between Europe and Russia". A statement on the company’s website said: "Total confirms with deep regret and great sadness that chairman and CEO Christophe de Margerie died just after 10pm (Paris time) on October 20 in a private plane crash at Vnukovo airport in Moscow, following a collision with a snow-removal machine. It added: "The thoughts of the management and employees of the group go out to Christophe de Margerie’s wife, children and loved ones as well as to the families of the four other victims." The 63-year-old, who was known affectionately in Paris circles as Big Moustache – a tribute both to his facial hair and his larger than life personality – was a hugely respected figure in the energy industry as well as in French business and politics. Mr de Margerie was famous in the industry as one of the most original and outspoken thinkers on the outlook for energy. He argued in 2009 that world oil production was unlikely ever to exceed 89m barrels per day; a prediction that has been confounded by the US shale boom – world production now is heading for 93m b/d – but accurately highlighted the difficulty of increasing oil production in many parts of the world. He was unapologetic about the need for oil companies to work in countries even when the threat of sanctions or war made other executives less willing to engage in, or even talk about, such sensitive areas. His answer was simply that otherwise the lights would go out. For example, he warned policy makers going to a climate change conference in Denmark in 2009 not to leave energy security off the table. "We also have a concern over energy access. If you take only one [concern with you] we are dead and we don’t want to die," he said. "Carbon is not the enemy, carbon is life." As well as some detractors, Mr de Margerie had many admirers in the energy business and a few confidants, with whom he could talk for hours, often over a cigar and whiskey. Abdullah bin Hamad Al Attiyah, Qatar’s former deputy prime minister and energy minister, was one of them. He often joked that the two would eventually write a book about their travels. In spite of such close relationships, many of which became friendships – especially in the Middle East where Mr de Margerie spent an important part of his career before becoming chief executive – he had little luck in getting rulers to open their oilfields to Total, as he insisted, for example in Iraq and Iran, that only commercial deals that worked for both sides were sustainable. He rarely – if ever – held a grudge against those he cared about, but could not stand false pomposity. His travels often took Mr de Margerie away from his family, a hole he realised only when his grandchildren were born. He rarely admitted he regretted anything, but he said: "I used to think quality time with my children was good enough, but quantity matters." He joined Total straight from college in 1974. It was often reported that he liked saying he chose Total because it was the company that was closest to his house. He quickly worked his way up to become head of the company’s Middle East operations, which took him into several political hotspots. He was also head of exploration and production and was an early advocate of shale gas, before being appointed chief executive in 2007. Mr de Margerie was implicated in a scandal over kickbacks to Saddam Hussein’s regime in Iraq during the UN’s oil-for-food programme. He always maintained his innocence. Born in 1951, Mr de Margerie was a member of the elite Taittinger family, founders of the champagne house. He was the black sheep, preferring a career in the oil industry to the refined atmosphere of fine wines.

Closing Market Summary: Nasdaq Leads Stocks Higher

Equity indices finished the first session of the week near their highs with the Nasdaq Composite (+1.4%) leading the way. The S&P 500 (+0.9%) settled a bit behind the tech-heavy index while the Dow Jones Industrial Average (+0.1%) struggled to turn positive.

The price-weighted Dow spent the bulk of the session in the red as IBM (IBM 169.10, -12.95) weighed. The stock fell 7.1% and surrendered its standing as the second-largest Dow component after reporting disappointing results that featured revenue declines across all key segments and all geographic regions in which the company operates.

Despite IBM's miss, the technology sector kept pace with the broader market, thanks in part to the relative strength of Apple (AAPL 99.76, +2.09). The top-weighted sector component jumped 2.1% ahead of its earnings report. Similarly, chipmakers also contributed to the advance with the PHLX Semiconductor Index climbing 1.5%.

The outperformance of microchip manufacturers gave a boost to the Nasdaq Composite, which also benefited from strength in the biotech space. The iShares Nasdaq Biotechnology ETF (IBB 269.57, +4.20) spiked 1.6% while the health care sector (+1.2%) finished among the outperformers. Similarly, two other countercyclical sectors—consumer staples (+1.4%) and utilities (+1.4%)—displayed relative strength, while the telecom services space (+0.8%) ended a bit behind the S&P 500.

Also of note, the energy sector (+0.8%) was able to settle in the green even as crude oil slipped 0.1% to $81.97/bbl. Halliburton (HAL 52.92, +0.32) underpinned the sector, climbing 0.6%, in reaction to better than expected earnings and revenue.

Elsewhere, industrials (+0.3%) registered a slim gain, but the sector was weighed down by defense contractors with the PHLX Defense Index shedding 0.1%. Meanwhile, transport stocks fared well with the Dow Jones Transportation Average rising 1.0%. Airlines led the way with United Continental (UAL 47.29, +2.61) spiking 5.8%.

Treasuries registered modest gains with the 10-yr yield slipping one basis point to 2.18%.

Today's participation was largely in-line with average as 723 million shares changed hands at the NYSE floor.

Investors did not receive any economic news today and tomorrow's data will be limited to the Existing Home Sales report for September ( consensus 5.11 million), which will be released at 10:00 ET.

* Nasdaq Composite +3.3% YTD  * S&P 500 +3.0% YTD  * Dow Jones Industrial Average -1.1% YTD  * Russell 2000 -5.8% YTD