TheChek News Flow

US Market closed lower after FED Minutes..USD bid higher while US treasuries sold off after Fed meeting minutes revealed the start of QE taper may still begin in anticipation of the improved outlook; Markets reprice possibility of a December move despite the dovish sentiment from Yellen and Bernanke in recent days...VIX @ 13.40 flat...BRazil- closed ... PBoC conducted open market operations on 2 separate occasions this week - marks first weekly net liquidity injection in 5 weeks...China Nov HSBC flash manufacturing PMI falls to 3-month low as New Orders component fall into contraction territory; Chief HSBC economist noting growth momentum has softened in November, while muted inflation allows Beijing to keep policy accommodative...BOJ on hold with policy and also keeping economic assessment unchanged for the 3rd month as widely expected; Statement mentions "lackluster performance" in overseas economies but still sees exports as "picking up", disappointing some expectations of a more direct acknowledgement of risks to overseas shipments...Nikkei +1.92%...Shanghai -0.15%

Eur$ 1.3429 S&P Fut -0.10% European Fut -0.65%

Keep an eye on :

- AOIL SS : Alliance Oil 3Q Ebitda $175m vs Est. $185m; Ebitda Margin Falls - ATCOA SS : Atlas Copco interested in further acquisitions - Dagens Industri - BWO NO : BW Offshore 3Q Net $18m vs $22.3m in 2Q; Declares $0.03/Shr Div - CSGN VX : Credit Suisse to Change Structure From Mid 2015 - JMAT LN : on the tape... - UG FP : Peugeot Is Set to Reduce French Capacity, Le Figaro Says - UG FP : according to China press Dongfeng could buy 20% stake in PSA - PRS SM : Prisa puts its Mediaset stake up for sale (17.3% bought for €490 in 2010, could be worth €692m) -El Confidential - RBREW DC : Royal Unibrew Raises 2013 Outlook for Revenue, Ebitda, Ebit - SAB LN : SABMiller 1H Ebita $3.27b; Est. $3.2b - TEL2B SS : Russia Delays Rostelecom Mobile Merger With Tele2: Kommersant - TCG LN : Thomas Cook Boosts Stake in JV With Intourist, Kommersant Says - TIT IM : Telecom Italia CEO willing to sell TIM Brasil if other growth options can be found  - UHR VX : Switzerland Oct. Watch Exports Rose 1.1%

See Full note attached

1. Showtime for the US/DM Recovery 2. Forward guidance harder in an above-trend world 3. Earn the DM equity risk premium, hedge the risk 4. Good carry, bad carry 5. The race to the exit kicks off 6. Decision time for the ‘high-flyers’ 7. Still not your older brother’s EM... 8. ...but EM differentiation to continue 9. Commodity downside risks grow 10. Stable China may be good enough

Telecom Italia eyes sale of Brazil unit

Telecom Italia is prepared to sell its prized Brazilian business but would first need an alternative investment plan, according to the new chief executive of the heavily indebted Italian telecoms group. Marco Patuano told investors at a Barcelona conference that the company would not sell the business simply because it would reduce its substantial debts. TI, whose net debts are close to €30bn, recently sold its Argentine operations after receiving an unsolicited $860m bid, leading to speculation that its stake in TIM Brasil could be next.

Mr Patuano said that he would have to evaluate not just the “size of the cheque” for TIM Brasil, but whether he could present shareholders with an alternative source of growth. Telecom Italia has laid out a three year strategy to turn around the domestic business. Analysts from Macquarie on Wednesday said a Brazilian “sale will still happen in late 2014”, which would buy the group time to improve conditions in its home market. “Just repaying debt seems to me a strategy that is a little short-sighted,” said Mr Patuano at the Morgan Stanley conference. Asked whether he had a sufficient plan, he said, “The answer is, sorry, gentlemen and ladies, I’ve had five weeks [in the job].” The sale of the Brazilian business is seen by analysts as supported by Telefónica, which took control of a key shareholder group in Telecom Italia earlier this year. However, Mr Patuano suggested that the most likely buyer of TIM would not be one of the current players in Brazil, such as Carlos Slim’s America Movil. “It would be the only and last chance [for another telecoms operator] to enter Brazil,” he said. He said that, unlike Italy, the Brazilian market was large enough for at least four operators to operate profitably. Analysts say that Telefónica would, however, prefer to reduce the number of companies in Brazil to bolster its own business.

Mr Patuano said that slower growth in Brazil’s voice market means that operators are now focused on investing in data connectivity to allow consumers faster access to internet content. “I personally asked my guys to change the plan versus the previous one [so that capital expenditure in Brazil increases],” said Mr Patuano. The Telecom Italia stake in the Brazilian business is valued at about €6bn. Telecom Italia wants to reduce an adjusted net debt of €28.2bn to less than €27bn by the end of 2013. Telecom Italia is also progressing with plans to sell its mobile phone masts and media business.

Dongfeng Motor investigating possibility of buying 20% stake in PSA, mandates a bank to work on proposal

Dongfeng Motor [Dong Feng Qi Che], the Hubei-based Chinese auto maker, is in the preliminary stage of investigating the possibility of buying a 20% stake in French peer PSA Peugeot-Citroen, the Chinese-language China Business News reported.

The item cited an unidentified Dongfeng Motor source who said the company has mandated an investment bank to help work on the deal plan. The report also said that Dongfeng Motor and French government will each invest around EUR 1.5bn (CNY 12.4bn) to acquire a 20% and a 30% stake in PSA and the talks are being held by and between a French delegation and Dongfeng Motor.

Source China Business News

Veteran UK fund manager Anthony Bolton believes that China’s “momentous” package of economic reforms, revealed last week, will be the catalyst that draws foreign investors back to one of the world’s worst performing equity markets. On Friday, China’s top leaders released a blueprint for change covering various aspects of economic, social, and financial policy. Some economists have described it as the most important political development in China for more than 20 years.

Mr Bolton, a perennial China bull, steps down from running Fidelity’s China Special Situations fund in April next year. He sees these sweeping changes as the key to reversing years of entrenched antipathy towards Chinese equities among global investors. “What I think is really impressive is the extent of what they’re doing, and the amount of reform that they’re doing. . . When you add all this up, I think it is pretty significant,” said Mr Bolton. “There hasn’t been a catalyst, particularly to get foreign interest back in China. I think this could be the catalyst that brings that money back,” he added. “I think this will be the new story.” China’s stock market has been among the world’s worst performers since Mr Bolton set up his fund in April 2010. The H-share index of Chinese companies listed in Hong Kong has fallen 12 per cent, while the FTSE 100 has risen by one-fifth and the S&P 500 is up by about 50 per cent. Much of the negativity has come from fears that bad debts are building up in the banking sector, something that is much less of a concern for Mr Bolton. “I’m much less worried about the financial things that have worried other China bears,” said Mr Bolton. “There are certainly issues out there, but I think China . . . can move money around in the system to alleviate these problems and push them into the future.” Mr Bolton, who made his name as one of the UK’s most successful stock pickers, has overseen a patchy three years in charge of Fidelity’s flagship China fund. Many criticised his early attempts to apply western-style investing logic to China’s complex and opaque market, while the fund’s performance was hit by accounting scandals at some listed Chinese companies including Sino-Forest, which Mr Bolton had invested in. By September 2012, the fund had lost one-third of its value. However, Mr Bolton has enjoyed a recent reversal in fortunes. The fund is up 26 per cent this year, compared with a 2 per cent rise in the MSCI China index against which its performance is measured. After more than two years underwater the fund’s share price is finally back into positive territory. While most analysts agree that China’s reform package will prove positive for the longer term health of the economy, opinion is divided over whether it will be good news for investors. China’s stock market is dominated by large state-owned enterprises, which are expected to suffer during any overhaul of the country’s economic model.

Bank of Japan extends ultra-loose monetary policy

The Bank of Japan kept its policy settings on hold on Thursday, judging that fragility in overseas economies is not serious enough to threaten steady progress towards its ambitious inflation target. In a statement, the BoJ said it would continue buying enough assets to pump up the monetary base at a rate of about Y60tn-Y70tn a year, in order to achieve stable annual price rises of 2 per cent.

The bank reiterated its generally positive view of the domestic economy, previously expressed at a policy meeting at the end of October, noting a pick-up in investment by businesses, continued strength in public spending and “resilient” private consumption. The two-day board meeting concluding on Thursday was the first since the government announced that Japan’s growth rate roughly halved from the second to the third quarter, thanks largely to a drop-off in net exports and private consumption. Growth in the first half had been the highest of any developed economy, buoyed by fiscal stimulus and the profit-boosting effects of a weaker yen. In September, the government declared an end to stagnation, saying that the economy was “on the way to recovery at a moderate pace”. It is expected to keep that assessment intact for a second month on Friday, with Akira Amari, economy minister, noting encouraging trends in industrial production, capital investment and consumer spending. At the same time, surveys of households and bond market participants suggest that inflation expectations are climbing. “It would appear – at least on the surface – that the “sticky” deflationary psychology ... that took root during Japan’s 15 years of deflation has finally been wiped away,” said Jun Ishii, chief fixed-income strategist at Mitsubishi UFJ Morgan Stanley. However, there are fears that domestic demand is being pulled forward by the consumption tax increase in April. Several indices of consumer sentiment fell heavily after the prime minister’s announcement last month that the tax increase would go ahead, suggesting that households are concerned about another burden on finances amid a backdrop of price rises caused by the lower yen. An “anxiety index” published by the Nippon Research Institute, which measures how consumers view the coming 12 months in terms of the economy, employment, incomes and prices, rose to 148 in October – higher than the 145 reading last December, when Shinzo Abe returned to power vowing to shake off deflation. Meanwhile, external conditions are not providing much support. On Thursday, the BoJ gave another airing to its concerns over the European debt problem, the stop-start US recovery and patchy growth in emerging economies. Some analysts predict that the central bank is ready to supply even more stimulus in the first few months of next year. Recent dovish remarks from board members “could tip the balance in favour of additional easing at the earliest signs that growth and inflation are slowing,” said Izumi Devalier, economist at HSBC. As usual, board member Takahide Kiuchi suggested on Thursday that the BoJ adopt an alternative wording for its main policy pledge, to emphasise that the radical easing programme adopted in April is an intensive measure which should run for about two years, rather than “as long as is necessary” to hit the 2 per cent target. His proposal was struck down by eight votes to one.

Asian Market Update: China flash PMI slows to 3-month low; BOJ keeps policy and economic assessment unchanged

***Observations/Insights*** - USD bid higher while US treasuries sold off after Fed meeting minutes revealed the start of QE taper may still begin in anticipation of the improved outlook; Markets reprice possibility of a December move despite the dovish sentiment from Yellen and Bernanke in recent days. - PBoC conducted open market operations on 2 separate occasions this week - marks first weekly net liquidity injection in 5 weeks. - China Nov HSBC flash manufacturing PMI falls to 3-month low as New Orders component fall into contraction territory; Chief HSBC economist noting growth momentum has softened in November, while muted inflation allows Beijing to keep policy accommodative. - BOJ on hold with policy and also keeping economic assessment unchanged for the 3rd month as widely expected; Statement mentions "lackluster performance" in overseas economies but still sees exports as "picking up", disappointing some expectations of a more direct acknowledgement of risks to overseas shipments.

***Economic Data*** - (CN) CHINA NOV HSBC/MARKIT FLASH MANUFACTURING PMI: 50.4 V 50.8E (3-month low) - (JP) BANK OF JAPAN (BOJ) POLICY STATEMENT: REITERATES TO INCREASE MONETARY BASE AT ANNUAL PACE OF ¥60-70T (AS EXPECTED) - (JP) JAPAN OCT SUPERMARKET SALES Y/Y: 0.5% V 0.4% PRIOR - (JP) Japan investors bought net ¥349.9B in foreign bonds last week vs bought net ¥357.1B in prior week (6th straight week of net purchases); Foreign Investors bought net ¥1.29T in Japan stocks v bought net ¥273.1B in prior week - (KR) SOUTH KOREA OCT DISCOUNT STORE SALES Y/Y: -6.4% V -5.3% PRIOR; DEPARTMENT STORE SALES Y/Y: -2.2% V +2.8% PRIOR - (AU) AUSTRALIA OCT RBA FX TRANSACTIONS (A$): 648M V 663M PRIOR - (NZ) NEW ZEALAND OCT CREDIT CARD SPENDING M/M: -0.8% v -0.1% PRIOR; y/y: 3.2% v 5.1% PRIOR (5-month low) - (NZ) NEW ZEALAND OCT ANZ JOB ADVERTISEMENTS: 4.5% V 1.3% PRIOR - (SG) SINGAPORE Q3 FINAL GDP Q/Q: +1.3% V -0.3%E; Y/Y: 5.8% V 5.3%E; Raises 2013 GDP forecast to 3.5-4.0% from 2.5-3.5% prior

***Fixed Income/Commodities/Currencies*** - (CN) PBoC to inject CNY33B in 14-day reverse repors; Injects net CNY59B this week (first injection in 5 weeks) v drained CNY15B prior - (CN) China MOF sells CNY2B in 5-yr RMB bonds at Hong Kong, avg yield 3.09%; CNY5B in 3-yr RMB bonds, avg yield 2.60%

- USD/CNY: (CN) PBoC sets yuan mid point at 6.1366 v 6.1305 prior setting (weakest Yuan setting since Nov 10th) - GLD: SPDR Gold Trust ETF daily holdings fall 2.7 tonnes to 860.3 tonnes (lowest since Feb 2009)

- USD/JPY hit 2 1/2 month highs at ¥100.50 as less dovish than expected Fed meeting minutes lifted the greenback across the board. AUD/USD was down about 40pips at session lows below $0.93 handle, with added AUD headwinds coming from disappointing China PMI. NZD/USD also saw its lows after the China data, falling over 30pips below $0.8240. EUR/USD largely consolidating the sharp decline in US session within a 25pip range, supported by 100day EMA around $1.3420.

***Speakers/Political/In the Papers*** - (CN) China Qinhuangdao coal price in China rises to CNY560-570/t, highest level since early Aug - Chinese press - (CN) China Fin Min Lou Jiwei: China to cut tax for property transactions while raise for possessing properties - People's Daily - (CN) China Ministry of Housing and Urban Rural Development: China won't significantly change property curbs in short term - Chinese press - (CN) Former PBoC adviser Li Daokui: Chinese economy must experience "temporary pains"; China economic growth may slow down to 7% in the next 2-3 years - Chinese press

- (JP) Japan Cabinet Office to keep its economic assessment unchanged for the 2nd consecutive month in its monthly November report - Nikkei News - (JP) Japan, China agree to increase economic cooperation - Japanese press

- (KR) Bank of Korea (BOK) policy board member: Economic transition in China poses risks to South Korea's export growth - Korean press - (KR) Korea Center for International Finance (KCIF): South Korea CPI will likely accelerate in 2014 - Korean press - (KR) South Korea Fin Min Hyun: State-run companies' debt is a big concern to govt

- (DE) German Finance Ministry releases monthly report: Supports govt 2013 GDP forecast of 0.5% - financial press - (EU) ECB's Noyer: Sees no signs of deflation in the euro zone - financial press

- (CA) BOC Gov Poloz: Substantial stimulus in Canada still appropriate; Economic outlook roughly unchanged since Oct monetary policy report; BOC maintaining a neutral policy stance - (US) Goldman Sachs Chief Economist: Fed minutes were for the most part neutral; reiterates March is the most likely start for tapering QE, but December is still an option

***Equities*** Market Snapshot (as of 04:30 GMT): - Nikkei225 +1.5%, S&P/ASX -0.2%, Kospi -1.3%, Shanghai Composite -1.0%, Hang Seng -0.7%, Dec S&P500 -0.1% at 1,777, Dec gold -0.9% at $1,247, Dec crude oil flat at $93.35/brl

US markets: - WSM: Reports Q3 $0.58 v $0.54e, R$1.05B v $1.03Be; +6.2% afterhours - GMCR: Reports Q4 $0.89 v $0.74e, R$1.05B v $964Me; GMCR: Board approves $1B buyback program (10% of market cap); initiates quarterly dividend of $0.25/shr; +4.6% afterhours - JCI: Announces 3-yr $3.65B (11% of market cap) share repurchase program; raises quarterly dividend by 16% to $0.22/shr from $0.19/shr; +4.2% afterhours - JACK: Reports Q4 $0.45 (adj) v $0.39e, R$338M v $336Me; +4.0% afterhours - RTN: Increases share repurchase authorization by $2.0B (7.3% of market cap); +0.8% afterhours - LTD: Reports Q3 $0.31 v $0.28e, R$2.17B v $2.17Be; -3.3% afterhours

Notable movers by sector: - Consumer discretionary: Peak Sports Products Co Ltd 1968.HK -2.7% (Q2, Q3 guidance) - Industrials: Jiangsu WELLE Environmental Co Ltd 300190.CN -3.7% (FY13 guidance); Downer EDI DOW.AU -3.5% (analyst action); Honda Motor Co Ltd 7267.JP +3.2% (production plans); Daewoo Shipbuilding & Marine 042660.KR +0.4% (awarded order); Komatsu Ltd 6301.JP +1.6% (to begin rental business in North America; analyst action) - Materials: Paladin Energy Limited PDN.AU +0.5% (trading update); BHP Billiton Ltd BHP.AU -0.1% (AGM comments) - Financials: New China Life 601336.CN -3.6% (investment plans); Dexus Property Group DXS.AU -1.0% (provides update on acquisition); Ping An Insurance 601318.CN -2.9% (to issue convertible bonds) - Utilities: TEPCO 9501.JP -2.0% (closes two reactors); Taiyo Nippon Sanso Corp 4091.JP +1.8% (announces acquisition)

Ex-SAC manager ‘broke law’, court told

US prosecutors told a jury that Michael Steinberg, a former SAC Capital portfolio manager, "broke the law" by trading on secret business information obtained by his research analyst’s "circle of friends" as the government’s latest insider trading trial began Wednesday. Lawyers for Mr Steinberg painted a different picture saying their client was betrayed by his former research analyst, Jon Horvath – a key government witness – who chose on the eve of his own criminal trial his "self interest over the truth" and claimed that Mr Steinberg was involved in the criminal scheme. Barry Berke, Mr Steinberg’s attorney, told the jury Mr Horvath was "rewriting history" and twisting innocent words in emails into nefarious meanings. He said Mr Steinberg did not know and had no communication with analysts and company insiders who provided Mr Horvath with confidential information. Mr Horvath has pleaded guilty and is expected to testify for the government to support allegations that Mr Steinberg traded Dell stock after learning the computer maker would miss quarterly earnings estimates in August 2008. Earlier this month, ending nearly a decade-long investigation, SAC pleaded guilty to insider trading in connection to the Dell trade and others, and agreed to wind down its operations and pay more than $1.8bn in fines. Six former SAC analysts or portfolio managers have pleaded guilty to insider trading while at the hedge fund. The government has stressed that its investigation is continuing. SAC founder Steve Cohen has not been charged with any criminal wrongdoing. The stakes are high for the US attorney’s office in Manhattan, which has not lost an insider trading case since its widespread crackdown started in 2009. Prosecutor Antonia Apps told the jury of nine women and three men that Mr Horvath was close to being fired in 2007 and after one big trading loss, Mr Steinberg told him he needed an edge, or "proprietary inside information the defendant could make money off of". The next summer Mr Horvath called Mr Steinberg from his vacation in Mexico to relay he learnt from his source about Dell’s disappointing earnings, Ms Apps said. One minute after the men spoke, Mr Steinberg allegedly sold Dell shares short, in effect betting the price would drop. When Dell announced earnings a few days later its shares fell 14 per cent, the biggest drop in nearly eight years, and Mr Steinberg made more than $1m in profits, Ms Apps said. "Secret company information can be a valuable thing," Ms Apps said. Mr Steinberg "got an illegal edge over ordinary investors who played by the rules . . . he broke the law", she said. Mr Horvath would also tell the jury that Mr Steinberg knew it was illegal and asked him what he would say to the Federal Bureau of Investigation if asked about Dell, the prosecutor said. The courtroom in lower Manhattan was packed with rows of supporters, both friends and family, seated behind Mr Steinberg at the defence table. Mr Berke, his lawyer, sought to appeal to the jury that Mr Steinberg, a University of Wisconsin graduate who studied history and philosophy and married his college sweetheart, was not a traditional hedge fund manager. Mr Steinberg joined SAC after college and rose through the ranks to manage more than $100m. He never attended business school and relied on his analysts more than others. Mr Horvath "manipulated the information so Mr Steinberg wouldn’t know it was from an illegal source," Mr Berke said.

After Hours Summary: WSM +5.6%, GMCR +4.6%, SGOC -18.3%, BV -11.6%, VVTV -8.6%, LTD -3.4% following earnings/guidance

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings: DATE +6.4%, WSM +5.6%, GMCR +4.6%, JACK +3.9%, DL +1.4%, KONG +0.5%

Companies trading higher in after hours in reaction to news: AZC +90.5% (arranged $26 mln increase to Red Kite loan facility; commented on Save the Scenic Santa Rita's 'inaccurate' press release), GMCR +4.6% (announced an additional $1 billion buyback; declared quarterly cash dividend of $0.25 per share; co also reported earnings), PETX +4.4% (announced 'positive' top-line results from AT-001 dose-ranging field study in client-owned dogs with osteoarthritis), JCI +4.2% (announced three-year $3.65 billion share repurchase program; increases quarterly dividend by 16 percent to $0.22 from $0.19 per share)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings: SGOC -18.3%, BV -11.6%, VVTV -8.6%, LTD -3.4%, NMIH -0.5%, PLNR -0.1%

Companies trading lower in after hours in reaction to news: QLTI -9.7% (announced it is close to finalizing a pivotal trial protocol for QLT091001 for the treatment of inherited retinal disease; co has undertaken a broad review of strategic options with Credit Suisse), ATTU -6.7% (announced proposed public offering of ordinary shares), AL -4.5% (announced announces secondary public offering of ~10.14 mln shares of common stock), WBMD -3.7% (announced $300 mln offering of convertible notes due 2020), TWGP -1.9% (received Nasdaq notice regarding listing requirements), GCAP -1.2% (to offer $65 mln of convertible senior notes),

Closing Market Summary: Stocks Slump as Taper Talk Returns

The major averages ended on their lows after early gains turned into afternoon losses. The late decline occurred in reaction to the October FOMC minutes, which mentioned the possibility of tapering in the ‘coming months.' It should be noted that despite today's 0.4% decline, the S&P 500 remains higher by 7.5% since October 9. Stocks held modest gains through the bulk of the session after a better-than-expected October retail sales report set the stage for an upbeat open. The report pointed to an increase of 0.4% while the consensus expected a more modest uptick of 0.1%. More importantly, the report indicated the government shutdown had essentially no effect on consumer spending. The above-consensus data helped retailers outperform the broader market as the SPDR S&P Retail ETF (XRT 86.87, +0.03) ended flat. Among individual names of note, J.C. Penney (JCP 9.44, +0.73) surged 8.4% after its upbeat-sounding guidance overshadowed its bottom-line miss. As the opening hour drew to its close, stocks spiked amid reports the European Central Bank will weigh implementing negative deposit rates if more easing is needed. The euro weakened on the news, falling below 1.3500 against the dollar. It is worth mentioning that negative rates have been discussed in recent weeks. In fact, just yesterday, ECB Executive Board member Joerg Asmussen said the central bank could implement negative deposit rates if the 2.0% inflation target remains elusive. However, Mr. Asmussen added he would be ‘very, very careful' with regards to deploying the policy tool.

Equity indices then returned to their earlier levels after St. Louis Fed President James Bullard said that a strong November jobs report would increase the chances of tapering in December. Taper talk resurfaced this afternoon when the minutes from the October FOMC meeting indicated tapering is ‘likely in the coming months.' The rest of the statement struck a familiar tone as the FOMC said the economy is expanding at a moderate pace while some downside risks remain. The market's reaction was consistent with what transpired after previous mentions of tapering by the Fed. Equities, Treasuries (10-yr yield +8 bps to 2.79%), and gold futures (-2.3% to $1245.50/ozt) sold off while the Dollar Index (+0.4% to 81.02) rallied. Even though the market received tapering hints from Mr. Bullard and the October minutes, it should be noted the labor situation represents just one half of the picture. The Federal Reserve has also committed to maintaining annual inflation close to 2.0%, but has struggled in achieving this target. Today's CPI report spoke to that point as October prices slipped 0.1% while the consensus expected no change. Core prices increased 0.1%, below the 0.2% expected by the consensus. On an annualized basis, CPI came in at 1.0% while core CPI was reported at 1.7%.

When the dust settled, the health care sector (+0.3%) was the only group left in positive territory while the other sectors ended with losses between 0.3% and 1.2%. Rate-sensitive utilities (-1.1%) and telecom services (-0.8%) ended at the bottom of the leaderboard as elevated rates weighed.

Participation was on the light side as only 622 million shares changed hands on the floor of the New York Stock Exchange.

Looking back at today's remaining economic data, business inventories rose 0.6% in September after increasing 0.4% in August. The consensus expected inventory levels to increase 0.4%.

Separately, existing home sales fell 3.2% to 5.12 million in October from an unrevised 5.29 million in September. The consensus expected home sales to fall to 5.20 million. Surprisingly, the National Association of Realtors did not blame the government shutdown for the drop in sales. The shutdown left many banks unable to verify income through the IRS before closing. That was one of the main reasons why mortgage purchase applications fell during the month. We expected the delays in the mortgage approval process to push a number of home purchases that would have occurred in October into November. Tomorrow, weekly initial claims and October PPI will be reported at 8:30 ET while the November Philadelphia Fed survey will be released at 10:00 ET.

o Nasdaq +29.9% YTD o Russell 2000 +29.5% YTD o S&P 500 +24.9% YTD o DJIA +21.3% YTD