TheChek News Flow

US Market Closed higher, near the highs of the year...a quiet session but with a lot companies reporting...VIX @ 13,2 (-1,6%)...Brazil-1,01%...China money market pressure remains on display as Shibor rates continue to hit multi-month highs(4,37% +0,28), leading to sources within the PBoC to hint that the central bank may resume liquidity injections if rates move too high; Markets may still interpret this as endorsing gradual build-up of expectations for reduced PBoC accommodation...Shanghai -1,15%...Japan CPI data marked prime economic events of the session. National CPI was above expectations and core-CPI saw its first sequential decline in 6 months. More notably, the core-core CPI (ex food/energy) was flat, the first non-negative print since 2008, leading to some celebratory rhetoric from cabinet officials about Japan's exit from deflation. ...Nikkei -2,20%...Canon -1% on numbers Samsung -1% on Q3 numbers...Fitch Lowers GDP outlook for world growth (2013 2,3% vs 2,4%, 2014 2,9% vs 3,1%, 2015 unch. @ 3,2%

Eur$ 1,3820 European futures indicated @ 40bps lower

Keep an eye on: - AZA IM : Poste CEO Says 'In Tune' With Air France on Alitalia: Sole - AH NA : Ahold on Track to Triple Online Units' Sales by 2016: Dagblad - AAL LN : Anglo American CEO Cools on Minas-Rio Stake Sale as Prices Climb - ATO FP : Atos 3Q Rev. Misses Ests; Confirms 2013 Outlook - CS FP : Axa Says 9-Month Total Revenue Rose 2% to EU69.5 Billion - BAS GY : BASF 3Q Ebit Ex-Items EU1.69b, Est. EU1.62b; Confirms 2013 Goals, Sees No Economy Upturn in 4Q, FX to Impact Earnings - BBVA SM : BBVA 3Q Net Misses Estimates; Won't Pay January Dividend - BELG BB : Belgacom 3Q Ebitda of EU428m Meets Ests., Reiterates FY Outlook - BUCN SW : Bucher Confirms FY Forecast for Improvement in Profit - CABK SM : CaixaBank 3Q Net EU50 Mln; Analyst Est. EU32.8 Mln - CA FP : Carrefour Hires Itau BBA, CS for Brazil IPO - DAI GY : Daimler aims to complete purchaseof 12% stakein BAIC's car unit by YE - EAD FP : Airbus Woos U.S. With Supplier Meeting in Washington,CEO ‘Very Confident’ of Gaining U.S. Customers for A380 - ELUXB SS : Electrolux 3Q Op. Profit SEK1.08b; Est. SEK1.32b, to Cut Jobs - FCC SM : Gates Invests in FCC Through Cascade, Foundation, Filing Shows - OGZD LI : Russia May Boost Taxes on Gazprom to Aid Budget, Kommersant Says - HUH1V FH : Huhtamaeki 3Q Sales, Pretax Profit Miss Ests.; Outlook Unchanged - INGA NA : ING to Have 57% Stake in ING U.S.; Underwriters Exercise Option - KER FP : Kering Seeks to Sign Agreement This Yr to Sell La Redoute - MOR GY : MorphoSys Lifts Profit Forecast on Higher Sales, Lower Costs - MOEX RX : Moscow Exchange Shares May Be Added to MSCI Russia, VTB Says - NOK1V FH : Nokia’s Margins to Suffer From High Competition with european operators (ALU gaining ground) , Cleveland Says - NOVOB DC : *NOVOZYMES 3Q EBIT DK755 MLN; ANALYST EST. DK744 MLN - OR FP : L'Occitane (973 HK) -6.5% on Q3 numbers - UG FP : French radio BFM reporting this morning PSA is looking at selling half of Banque PSA to Banco Santander for c. €1.5bn + Participation from the French State.Talks with Dongfeng loosing momentum - PUB FP : Google in Advertising Agreement With Publicis, FT - PWTN SW : Panalpina 3Q Consolidated Profit CHF23.8m Vs CHF3.6m - RBS LN : RBS’s Bad Bank Unit to Sell Commercial Property Assets, FT Says - SAFT FP : Saft 3Q Rev. €153m vs €132m Y/y reaffirms yr forecast for rev. €630m, Ebitda €90m-€95m; yr rev. est. €621m, Ebitda €92.6m - SGO FP : Saint-Gobain 3Q Rev. Matches Est.; Confirms 2013 Targets - SU FP : Schneider Q3 Rev €5.9B v €6.1B y/y; Cuts FY13 targets; sees stable to limited organic revenue growth- Expects FY13 adj EBITA margin to be negatively impacted by fx by about 0.3 to 0.5 pct points - Guides FY13 Rev stable to limited growth - SOLB BB: Solvay 3Q Adj. Ebitda Misses, Adapts 2013 Forecast for Vinyls JV - SSABA SS : *SSAB 3Q OP. LOSS SK598M; ANALYST EST. SK190M LOSS - TCH FP : Technicolor Confirms 2013 Objectives; Quarterly Revenue Drops - TIT IM : Telecom Italia minority shareholder seeks international candidate to head group - HO FP : Thales Took in Orders Over EU100 Mln Since Start-2013: Tribune - UCB BB :UCB 3Q Rev. EU842m; Est. EU845m; Confirms Full-Year Outlook - UNR1V FH : Uponor 3Q Earnings Match Ests.; Infra JV Integration Proceeds - USG NA : USG People 3Q Rev Falls 3% to EU599m; Beats Est. of EU586m - VOLVB SS : Volvo 3Q Sales SEK64.9b; Analyst Est. SEK66.9b

Up

*ABERDEEN ASSET RAISED TO BUY VS NEUTRAL AT UBS *AT&S RAISED TO BUY VS HOLD AT KEPLER CHEUVREUX *G4S RAISED TO NEUTRAL VS UNDERWEIGHT AT HSBC *KEMIRA RAISED TO EQUALWEIGHT VS UNDERWEIGHT AT MORGAN STANLEY *POLYMETAL RAISED TO NEUTRAL VS SELL AT CITI *REC RAISED TO NEUTRAL VS UNDERPERFORM AT MACQUARIE *SHIRE RAISED TO BUY VS NEUTRAL AT BOFAML *SPIRIT PUB CO RAISED TO NEUTRAL VS REDUCE AT NOMURA *TAURON POLSKA ENERGIA RAISED TO BUY VS SELL AT CITI

Down

*ABB CUT TO NEUTRAL VS BUY AT UBS *ADECCO CUT TO SELL VS NEUTRAL AT UBS *AUTOGRILL CUT TO UNDERPERFORM VS NEUTRAL AT CREDIT SUISSE *AZ ELECTRONIC CUT TO UNDERPERFORM VS NEUTRAL AT CREDIT SUISSE *BALOISE CUT TO UNDERPERFORM VS NEUTRAL AT CREDIT SUISSE *BSKYB CUT TO NEUTRAL VS OUTPERFORM AT MACQUARIE *CREDIT SUISSE CUT TO NEUTRAL VS OVERWEIGHT AT JPMORGAN *DEBENHAMS CUT TO HOLD VS BUY AT SOCGEN *ENDESA CUT TO SELL VS NEUTRAL AT GOLDMAN *GEORG FISCHER CUT TO NEUTRAL VS OUTPERFORM AT CREDIT SUISSE *MITIE CUT TO UNDERWEIGHT VS NEUTRAL AT HSBC *RANDSTAD CUT TO SELL VS NEUTRAL AT UBS *SARAS CUT TO NEUTRAL VS BUY AT NOMURA *STMICRO CUT TO NEUTRAL VS BUY AT GOLDMAN *TAURON CUT TO SELL VS HOLD AT ING *WACKER CHEMIE CUT TO NEUTRAL VS OUTPERFORM AT MACQUARIE

PT change

*AMPLIFON PT CUT TO EU3.9 VS EU4 AT GOLDMAN; KEPT AT NEUTRAL *Amplifon PT Cut to EU3.3 vs EU3.5 at Kepler Cheuvreux *Buzzi Unicem PT Cut to EU12.2 vs EU12.5 at Morgan Stanley *Gjensidige PT Raised to NOK101 vs NOK97.6 at Mediobanca *SANTANDER PT CUT TO EU4.6 VS EU4.8 AT RBC; KEPT AT UNDERPERFORM *TELENET PT RAISED TO EU44 AT ING; KEPT AT BUY

Initiation

*CENTRICA RATED NEW NEUTRAL AT MACQUARIE, PT 360P *DIALOG SEMICONDUCTOR RATED NEW OUTPERFORM AT RBC; PT EU18 *DRAX RATED NEW OUTPERFORM AT MACQUARIE, PT 760P *HAMMERSON REINSTATED AT NEUTRAL AT BOFAML; PT 555P *SHAFTESBURY REINSTATED AT UNDERPERFORM AT BOFAML; PT 600P *SWEDISH MATCH RATED NEW UNDERWEIGHT AT BARCLAYS; PT SEK190 *TEVA PHARMACEUTICAL RATED NEW BUY AT CITI, PT $47

Country Sector Stock Call

*ALFA REMOVED FROM UBS'S LEAST PREFERRED LIST *DEUTZ ADDED TO UBS'S LEAST PREFERRED LIST *GEDEON RICHTER ADDED TO UBS'S MOST PREFERRED LIST *KION ADDED TO UBS'S LEAST PREFERRED LIST *Saras Cut to Neutral at Nomura, Essar Energy Preferred *SKF ADDED TO UBS'S MOST PREFERRED LIST, REMOVES ABB *SHIRE REMOVED FROM UBS'S MOST PREFERRED LIST *WARTSILA REMOVED FROM UBS'S LEAST PREFERRED LIST

North Sea Oil Fields Are on the Brink of a Comeback

Output in North Sea Could Start Climbing After Years of Decline

ABERDEEN, Scotland—Texas and North Dakota aren't the only places where tired oil fields are being brought back to life.

Production from the British North Sea, which is one of the world's more mature oil provinces, is forecast to level off as early as next year after more than a decade of decline. Analysts think output could start climbing again shortly after that if current investment continues.

The turnaround isn't thanks to hydraulic fracturing or horizontal drilling—technological breakthroughs that have allowed producers to tap reserves long thought too costly to bother with in the U.S.

Instead, the spark has come from old-fashioned tax incentives and other economic lures offered by the U.K. In addition, after enduring years of political upheaval in Africa and the Middle East, many big producers have ramped up North Sea investment as they seek stable places to operate.

The potential for substantial new finds here is small. But even little discoveries can be profitable, thanks in part to the region's already existing infrastructure, which means new finds can get to market quickly.

The challenges, though, are substantial.

While infrastructure is plentiful, it is also old, creaky and expensive to operate. Many of the pipelines and terminals require expensive and time-consuming maintenance.

"We're at a bit of a crossroads," says Trevor Garlick, regional president for BP BP.LN +0.20% PLC's North Sea operations. "The next three to five years are going to be really important in the way the North Sea develops."

More BP Ramps Up Drilling After Asset Sales, Legal Costs Still, the renewed interest in the region is a turnaround from nearly 1½ decades of declining output. Production this year is forecast at between 1.2 million and 1.4 million barrels of oil equivalent a day. That would be its lowest level since 1977 and the 14th annual decline since 1999, when output peaked at 4.5 million barrels of oil equivalent a day.

Output is set to stabilize between next year and 2015, and it could reach two million barrels of oil equivalent a day by decade's end, according to Oil & Gas UK, a trade association.

Oil companies' capital spending in the North Sea this year is expected to reach £13.5 billion ($18.6 billion)—a level not seen since the region's boom in the mid-1970s. Production then was at well-known projects such as BP's Forties field, the North Sea's largest, and Royal Dutch Shell's RDSA.LN +0.81% Brent field, which produces prized light, sweet crude.

Last year, the U.K. government introduced tax incentives for investment in existing North Sea fields. And this year it clarified tax-relief measures for the cost of dismantling old platforms in the sea. The moves are aimed at helping big companies sell more mature assets to smaller companies for further development.

"The oil is out there, we're not running out," says Samir Brikho, chief executive of oil-services company AMEC AMEC.LN +1.22% PLC. "But the investment level is connected with the fiscal regime. If that's eased, the investments will come."

Asian Market Update: Japan CPI ex food/energy at break-even after 5-years of deflation; Samsung Electronics reports in-line Q3

***Observations/Insights*** - China money market pressure remains on display going into the weekend as Shibor rates continue to hit multi-month highs, leading to sources within the PBoC to hint that the central bank may resume liquidity injections if rates move too high; Markets may still interpret this as endorsing gradual build-up of expectations for reduced PBoC accommodation. - Japan CPI data marked prime economic events of the session. National CPI was above expectations and core-CPI saw its first sequential decline in 6 months. More notably, the core-core CPI (ex food/energy) was flat, the first non-negative print since 2008, leading to some celebratory rhetoric from cabinet officials about Japan's exit from deflation. - New Zealand officials have been increasingly vocal about tempering NZD strength. After concerns expressed by Fin Min English earlier this week, RBNZ Gov Wheeler hinted the apparent success of LVR caps in dealing with housing inflation could delay the start of rate hikes, sending NZD to multi-week lows across the board. - Samsung Electronics reported final Q3 results largely in line with expectations after preliminary results dampened sentiment earlier this month. Chip and Telecom units were particularly strong on y/y basis while TV/Home segment lagged. Samsung expects DRAM shipments to remain robust despite the recent hints of weakness in PC space.

***Economic Data*** - (JP) JAPAN OCT TOKYO CPI Y/Y: 0.6% V 0.5%E; TOKYO CPI EX-FRESH FOOD Y/Y: 0.3% V 0.3%E - (JP) JAPAN SEPT NATIONAL CPI Y/Y: 1.1% V 0.9%E; NATIONAL CPI EX-FRESH FOOD Y/Y: 0.7% V 0.7%E (first sequential decline in 6 months) - (JP) JAPAN SEPT CORPORATE SERVICE PRICE INDEX Y/Y: 0.7% V 0.8%E - (KR) SOUTH KOREA Q3 PRELIM GDP Q/Q: 1.1% V 0.8%E; Y/Y: 3.3% V 3.1%E - (PH) PHILIPPINES AUG TRADE BALANCE: -$961M V -$533ME

***Fixed Income/Commodities/Currencies*** - (JP) BOJ offers to buy ¥250B in 1-3yr JGB, ¥350B in 3-5yr JGB and ¥400B in 5-10yr JGB as well as ¥1.5T T-bills outright - (AU) Australia MoF (AOFM) sells A$800M in 2.75% 2024 Bonds; avg yield: 4.0137%; bid-to-cover: 2.88x - GLD: SPDR Gold Trust ETF daily holdings fall 1.8 tons to 876.5 tonnes - (US) Weekly Fed Balance Sheet Assets Week ending Oct 23rd: $3.795T (record high) v $3.770T prior; M1 y/y change: 9.0% v 9.0% w/w; M2 y/y change: 6.6% v 6.6% w/w

- (CN) PBOC begins loan prime rate system, sets 1-yr prime lending rate at 5.71% - (CN) Daily Shibor fixings: O/N: 4.3670% v 4.0880% prior (3rd consecutive rise, highest since June 30th); 1-week: 4.8910% v 4.6800% prior (7th consecutive rise, highest since July 30th)

- NZD/USD seeing outsized losses among the major, falling over 50pip below $0.83 handle at the lows. NZD/JPY falls below the ¥81 handle on relative kiwi decline for a 2-week low, while AUD/NZD is up 40pips above 1.1550 - a 6-week high. Kiwi weakness largely attributed to comments from RBNZ Gov Wheeler who hinted that LVR limits may delay the need to raise interest rates. - Other dollar majors largely rangebound. After some initial USD strength, AUD/USD is now down just 20pips around $0.96, EUR/USD is in a 20pip range around $1.38 and USD/JPY is consolidating overnight decline in ¥97.20-40 band.

***Speakers/Political/In the Papers*** - Fitch lowers GDP outlook for World growth; 2013 GDP seen at 2.3% v 2.4% prior; 2014 seen at 2.9% v 3.1% prior; 2015 world growth outlook unchanged at 3.2%

- (JP) Japan Fin Min Aso: Will take time for Japan to exit deflation; Japan CPI is rising as a result of BOJ economic policy. - (JP) Japan Econ Min Amari: welcomes union demand for base pay rise; Inflation should be driven by rising wages.

- (CN) Yuan rise is not perceived as too fast; PBoC may intervene fx market if appreciation accelerates - financial press - (CN) China Premier Li Keqiang: China is determined to improve air quality in five years - talk at China Trade Unions - (CN) China may further expand value-added tax (VAT) levy in 2014 - Chinese press - (CN) PBoC would resume liquidity injections if rates move too high - financial press citing PBoC source

- (AU) Moody's: Sector outlook for Australia states and territories remains Negative as it has been since 2010, due to wide deficits and increasing debt levels. - (NZ) RBNZ Gov Wheeler: Raising rates may risk boosting the NZD, housing market is overheated in some areas of the country, seeing some indications that lending limits are working; LVR limits may delay the need to raise interest rates

- (KR) Bank of Korea (BOK) Official Jung: South Korea exports level to US and China is not bad

***Equities*** Market Snapshot (as of 03:30 GMT): - Nikkei225 -1.2%, S&P/ASX +0.4%, Kospi -1.0%, Shanghai Composite -1.0%, Hang Seng -0.4%, Dec S&P500 flat at 1,748, Dec gold -0.5% at $1,343, Nov crude oil -0.1% at $97.47/brl

US markets: - TWTR: Prices 70M share IPO in range of $17-20shr - filing

- ESRX: Reports Q3 $1.08 v $1.08e, R$25.9B v $25.1Be; raises FY13 EPS guidance but cuts cash flow guidance; -4.3% afterhours - KLAC: Reports Q1 $0.68 v $0.66e, R$658M v $668Me; Guides Q2 $0.67-0.87 v $0.92e, R$670-730M v - $736Me - conf call; -3.5% afterhours - CERN: Reports Q3 $0.35 v $0.35e, R$727.8M v $756Me; -3.2% afterhours - EMN: Reports Q3 $1.68 (adj) v $1.64e, R$2.34B v $2.32Be, cuts FY13 guidance; -2.0% afterhours - WDC: Reports Q1 $2.12 v $2.04e, R$3.80B v $3.78Be; -1.3% afterhours - WYNN: Reports Q3 $1.84 v $1.64e, R$1.39B v $1.36Be; -1.1% afterhours

- CLF: Reports Q3 $0.66 v $0.71e, R$1.55B v $1.49Be; +1.6% afterhours - CA: Reports Q2 $0.86 v $0.72e, R$1.14B v $1.10Be; raises outlook; +2.0% afterhours - MSFT: Reports Q1 $0.62 v $0.54e, R$18.53B v $17.8Be; +5.3% afterhours - OUTR: Reports Q3 $0.97 v $0.88e, R$587.4M v $579Me; authorizes additional $150M share buyback (8.8% of market cap); +7.3% afterhours - AMZN: Reports Q3 -$0.09 v -$0.09e, R$17.09B v $16.8Be; +8.3% afterhours - ZNGA: Reports Q3 -$0.02 v -$0.04e, R$202.6M v $148Me; +12.9% afterhours - DECK: Reports Q3 $0.95 (unclear if comparable) v $0.72e, R$386.7M v $387Me; +13.8% afterhours

Notable movers by sector: - Consumer discretionary: L'Occitane 973.HK -6.5% (Q3 results) - Consumer staples: Warrnambool Cheese & Butter WCB.AU +3.6% (receives upsized offer) - Industrials: Mitsubishi Motors 7211.JP +2.3% (provides FY guidance); Fuji Electric Holding 6504.JP -1.4% (H1 results); Hitachi Construction Machinery 6305.JP +1.0% (speculation on earnings); Kia Motors Corporation 000270.KR +0.5% (Q3 results); Great Wall Motor 601633.CN -8.3% 2333.HK -5.5% (Q3 results); Fujian Longking Co Ltd 600388.CN +4.2%, Kelin Environmental Protection Equipment Inc 002499.CN +6.0% (China Premier calls to increase air condition) - Materials: Whitehaven Coal WHC.AU +2.6% (Quarterly production results); Hyundai Steel Co 004020.KR -1.6% (Q3 results) - Financials: Devine Ltd DVN.AU -26.5% (provides FY guidance); Mizuho Financial Group Inc 8411.JP -1.5% (execs to face punishment for criminal loans) - Technology: Canon Inc 7751.JP -1.0% (Q3 results); Samsung Electronics 005930.KR -1.0% (Q3 results); High Tech Computer Corp 2498.TW +3.8% (denies speculation to scale down production) - Energy: Dart Energy DTE.AU +3.6% (sells license); Sinovel Wind Group Co Ltd 601558.CN -3.5% (Q3 results) - Telecom: NTT DoCoMo Inc 9437.JP -1.9% (speculation on Q2 results); China Unicom Ltd 600050.CN -1.2% 762.HK +0.5% (Q3 results)

After Hours Summary: DECK +14.8%, ZNGA +13.4%, AMZN +8.4%, OUTR +6.5%, HWAY -24.4%, SYNA -7.8%, CERN -3.1% following earnings/guidance After Hours Gainers: Companies trading higher in after hours in reaction to earnings: BLDR +14.9%, DECK +14.8%, ELY +14.3%, ZNGA +13.4%, MKTO +9.3%, AFOP +8.6%, AMZN +8.4%, LSCC +7.1%, OUTR +6.5%, INFA +5.8%, MXIM +5.7%, MSFT +5.6%, MXWL +4.1%, CA +3%, COG +1.8%, N +1.3%, BCOV +1.2%, MCRS +1.1%, THRX +1.1%, CPWR +1%, CLF +0.7%, NR +0.7%, COLM +0.7%, FLS +0.3%, RGC +0.2%, IMI +0.2%, MCRL +0.1%

Companies trading higher in after hours in reaction to news: CECO +63.2% (reached agreement to sell European education properties; consideration is expected to be $305 mln, less certain distributions and adjustments prior to closing for ~$305 mln), ZNGA +13.2% (appointed Clive Downie as Chief Operating Officer, effective November 4, 2013; co also reported earnings), PBNY +4.8% (to replace Sterling ancorp in the S&P SmallCap 600), DD +3.0% (authorized management to execute a full separation of its Performance Chemicals segment)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings: HWAY -24.4%, QLIK -19.1%, RMD -9.4%, BSAC -7.8%, SYNA -7.8%, ECHO -7.2%, FSL -6.8%, INAP -4.9%, ESRX -4.3%, KLAC -3.5%, CERN -3.1%, AAN -3%, BJRI -2.4%, EMN -2%, WYNN -1.8%, WDC -1.2%, NBHC -1%, PAC -0.6%, DV -0.5%, MTW -0.5%, KBR -0.5%, SPN -0.5%, CB -0.3%, GB -0.3%, BMRN -0.3%, WOOF -0.3%

Companies trading lower in after hours in reaction to news: DVAX -8.6% (announced proposed public offerings of common stock and Series B convertible preferred stock), LXU -4.3% (provided update on status of its Pryor, Oklahoma chemical facility; co anticipates that the unplanned maintenance and performance improvement work will be completed and the Pryor Facility will be returned to production by the middle of Nov 2013), FNF -1.9% (priced public offering of 17.25 mln shares of common stock at $26.75 per share), KSU -0.8% (announced pricing of private offering of senior ntoes by KCSR and KCSM)

Carney buries predecessor’s liquidity policies

Mark Carney, the new governor of the Bank of England, on Thursday announced a sweeping overhaul of the way the central bank deals with lenders in financial difficulties, bringing it in line with the Federal Reserve and the ECB. In a speech at an event to celebrate the 125th anniversary of the Financial Times, Mr Carney said the BoE had a duty to "keep up" with events and provide a backstop to private markets to enable greater dynamism in financial services. Mr Carney said five words described the BoE’s new willingness to provide liquidity if banks need it. "We are open for business," the governor said. The BoE will now offer money for longer periods, accept a wider range of collateral, including "any asset of which we are capable of assessing the risks" and lower the cost of using the bank’s facilities. The approach buries the policies of his predecessor, Lord King, who was worried that the "moral hazard" of providing insurance to commercial banks would encourage them to take greater risks. Mr Carney said he expected to see an increase in banks using the new facilities as central banks tightened monetary policy in response to economic recovery, prompting bouts of market volatility. He also suggested the BoE would throw open its liquidity reserves to foreign currency borrowing and to non-bank financial companies. During the crisis, the BoE at first refused to extend general liquidity operations to banks, and then made the terms so onerous that institutions shunned the facility for fear of stigma. The Federal Reserve’s discount window and the ECB, which accepted much broader collateral, allowed banks to tap liquidity without the same reputational damage. Mr Carney also signalled the BoE would strengthen its oversight of shadow banking, the less regulated part of the financial system that operates in a similar way to banks. He said the next item on his agenda was to "turn activities of shadow banking into market-based finance" with "robust infrastructure". Rejecting the national antipathy towards the City, the governor said that, "If organised properly, a vibrant financial sector brings substantial benefits . . . The UK’s financial sector can be both a global good and a national asset – if it is resilient". He added: "The Bank of England today is the friend of resilient banks, continuous markets, and good collateral; and we are the enemy of taxpayer bailouts, fragile markets and financial instability." With bank assets now four times the size of national income, he suggested that on past trends, Britain’s banking assets were likely to be nine times the size of the economy by 2050. With 1m jobs in financial services and two-thirds outside London, he added that the City enhances the strength of the national economy. "The UK stands to benefit because of London’s place at the heart of the global financial system. Properly structured, this creates investment opportunities for British savers, reinforces trading ties for UK firms and improves access to credit for the real economy across this country." Revolutionising the often sniffy language of the BoE towards banks, he committed his organisation to helping financial services to grow in a way that benefited the whole economy. "The Bank of England’s task is to ensure that the UK can host a large and expanding financial sector in a way that promotes financial stability," the governor said. To achieve his ambition of a more vibrant yet safe financial sector in Britain, Mr Carney reiterated the need for global rules to make banking and financial markets safer and to make taxpayers immune from failing institutions. "The Bank of England’s task is to ensure that the UK can host a large and expanding financial sector in a way that promotes financial stability," the governor said. "Only then can it be both a global good and a national asset . . . helping to renew globalisation to the benefit of all".

Closing Market Summary: Cyclical Sectors Push Equities Higher

The major averages settled near their highs as the S&P 500 advanced 0.3% while the Dow Jones Industrial Average outperformed with a gain of 0.6%. Overall, today's session did not generate too much excitement even with investors receiving more than 200 quarterly reports between yesterday's close and today's open. Outside of some choppy action during the first hour, equity indices climbed steadily throughout the session. The Dow led from the start, keying off 3M's (MMM 123.49, +0.29) better-than-expected earnings. Meanwhile, the broader industrial sector (+0.7%) finished among the leaders as transports contributed to the strength. The Dow Jones Transportation Average gained 0.9% with airlines leading the pack after Alaska Air (ALK 69.68, +2.65) reported strong results.

Elsewhere, the discretionary sector (+1.0%) also provided leadership as homebuilders rallied in reaction to above-consensus earnings and revenue from PulteGroup (PHM 17.85, +1.17). The broader iShares US Home Construction ETF (ITB 23.18, +0.64) jumped 2.8%. In addition to builders, carmakers also underpinned the sector after Ford (F 17.76, +0.24) beat on earnings and issued upbeat guidance. While five of six cyclical groups ended with solid gains between 0.5% and 1.0%, the financial sector could not make a sustained move into positive territory until the final hour. The group added just 0.1% after spending the entire session just below its flat line. On the downside, all four countercyclical groups posted losses. Health care ended just below its flat line while consumer staples (-0.2%) and utilities (-0.2%) registered modest declines. The telecom services space (-1.0%) was the weakest sector of the day, pressured by shares of AT&T (T 34.63, -0.65) after the telecom giant reported a one-cent beat on revenue just below analyst estimates. Treasuries ended modestly lower with the 10-yr yield up 3.5 basis points at 2.52%. Trading volume was on the light side as just over 715 million shares changed hands on the floor of the New York Stock Exchange. Today's economic data was limited to weekly initial claims and the August trade balance report. Problems related to glitches from a computer upgrade in California continued to plague the initial claims data and artificially boosted headline levels. The weekly initial claims level fell to 350,000 from an upwardly revised 362,000 (from 358,000). The consensus expected claims to fall to 341,000. The Department of Labor stated that there was no way to separate the claims from California that were biasing the data from those in the private sector that lost their jobs as a result of the government shutdown. We have no way of determining the true level of layoffs, but it is likely around 310,000 -- 330,000 since overall labor trends have not changed much over the last couple of months. Separately, the trade deficit widened to $38.8 billion in August from a downwardly revised $38.6 billion reported in July. Tomorrow, September durable orders will be reported at 8:30 ET, the final reading of the Michigan Consumer Sentiment Survey will cross the wires at 9:55 ET, and August wholesale inventories will be announced at 10:00 ET.

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Twitter Sets IPO Price Range, Valued at Up to $11.1 Billion Deal Could Price in First Week of November

A user checks a Twitter feed on a smartphone at an office in London. Photo: Bloomberg News By TELIS DEMOS Twitter Inc. set its price range for its initial public offering at $17 to $20 a share, in a deal that values the company at up to $11.1 billion. The setting of a price range means Twitter can begin shopping to investors its IPO, which is slated to raise up to $1.6 billion. The process would begin with company officials meeting with salespeople at the investment banks, then with investors. The offering is expected to be one of the most anticipated of a recently rejuvenated technology IPO market, as Internet and technology companies that have grown to multi-billion-dollar valuations in private markets look to go public. In a "roadshow" where the company pitches its shares, the San Francisco-based company could face tough questions from investors about whether its 140-character microblogging service can continue to grow its user base and eventually turn profits from the advertising it sells. Twitter has grown to more than 250 million monthly active users since the first tweet was sent in 2006, by co-founder Jack Dorsey. The timing of the offering is indicative of the speed at which Twitter has moved since it first confidentially filed plans for its IPO in July. The filing with the range information is set to come just after the end of the 21-day period that the Jumpstart Our Business Startups Act, or JOBS Act, requires for IPO paperwork to be public before a pricing range. Twitter made its filing public on Oct. 3. but before that had filed confidentially with the Securities and Exchange Commission, which the JOBS Act allows for certain companies. The roadshow, where investors can put in requests for how much stock they want, and at what price, would last about a week or so, according to the people familiar with the plans. After that, Twitter and its bankers will set a final price, around Nov. 6, they said. The shares, which are to be listed on the New York Stock Exchange, would begin trading the next day. As currently envisioned, the roadshow would be shorter than Facebook Inc.'s, which took two weeks from the release of its price range to the final pricing. In that time Facebook raised its price range and increased the size of the deal. Twitter could also do the same, if the company feels that demand warrants. However, Facebook's shares began tumbling shortly after its IPO. In part, the offering was affected by a glitch at the Nasdaq Stock Market. But some traders and investors also said that Facebook's raised price and expanded size of the offering caused them to sell. Twitter is aiming for an IPO price that avoids Facebook's fate, but also one that doesn't produce an enormous "pop," or first day jump, people familiar with the company's thinking have said. A big pop can be a sign that the company didn't raise as much money as it could have.

Investors warn on fossil fuel spending

Investors managing assets worth about $3tn have written to the world’s largest oil, gas and coal companies, calling on them to prepare for a possible decline in demand for fossil fuels caused by policies to fight the threat of climate change. The letters, signed by 72 investors including several US state pension systems and fund managers such as Scottish Widows and Aviva, warn the companies that they may be investing in production capacity that will never be used. The correspondence reflects growing concern among many investors about the prospect that fossil fuel reserves will be "stranded assets", which cannot be extracted and used without causing dangerous global warming. The letters were sent to 45 companies, including large oil and gas producers such as ExxonMobil, Royal Dutch Shell and BP, and mining groups including BHP Billiton, Rio Tinto and Peabody Energy. They urge the companies to carry out a "risk assessment" of the consequences of a global move to cut greenhouse gas emissions by 80 per cent by 2050, a reduction that has been estimated as giving a reasonable chance of limiting the rise in global temperatures to an acceptable 2°C. The investors asked the companies to carry out the risk assessment in time for their 2014 annual meetings, generally in the first half of next year, and to publish details about their conclusions, subject to the constraints of commercial confidentiality. About 30 companies have now replied to the letter, Ceres said, some rejecting the idea outright, some saying they planned to comply with the request and most saying they would consider the proposal. Andrew Logan of Ceres, the investor network that works on environmental and social issues, which co-ordinated the letter, said: "Investors have already been burned by coal, because of the sudden drop in demand in the US, and there’s a concern that oil is going to go the same way." Mainstream forecasts of energy demand put out by government agencies, oil companies and consultancies still point to sustained growth in global demand for fossil fuels, including coal and oil, driven by emerging economies. Mr Logan said: "We’re not necessarily predicting the future. But there are credible scenarios people have put forward that raise questions about the energy industry’s business model, and whether the pace of its capital spending makes sense, given those future prospects." HSBC has estimated that in a world where carbon emissions were constrained, oil and gas companies could lose 40-60 per cent of their market capitalisation. The International Energy Agency, the rich countries’ think-tank, has said only one-third of the world’s proved reserves of fossil fuels can be used by 2050 if the world is to stay within the 2-degree limit, unless there is widespread use of carbon capture technology. Anne Stausboll, chief executive of Calpers, the California state employees’ pension fund, said: "We cannot invest in a climate catastrophe." The investors’ letter warns that if demand for fossil fuels were to decline sharply, prices would slump. It calls on oil and gas companies to review their capital spending on finding and developing new reserves, which totalled $674bn last year for the 200 largest groups, and to assess the long-term potential of those reserves alongside "alternative uses of capital". Many large oil companies have already been returning capital to shareholders, sometimes under pressure from activist investors. Carl Icahn, one of the leading activists, has taken positions in Chesapeake Energy, the shale gas and oil producer, and Transocean, the offshore drilling contractor, and put pressure on them to curb capital spending and improve shareholder returns. Craig Mackenzie, head of sustainability at Scottish Widows Investment Partnership, said there had been an assumption among investors that a potential decline in demand for fossil fuels was a long-term issue, but he saw a possibility that it could come much sooner. "There is a series of questions we need to ask oil companies about how they think about risk, and incorporate it into project sanctioning," Mr Mackenzie said. "In a world where oil demand is weaker, and the oil price goes lower, then it doesn’t make sense to invest in projects with high break-even points." Investments in production in the Arctic or in the oil sands of Canada might be particularly vulnerable, he added. Simon Wardell of IHS, a consultancy that forecasts continuing growth in oil and gas demand, said he agreed a decline in consumption was possible, but "none of this is going to happen very quickly". He said the dominance of petrol- and diesel-fuelled vehicles, and the lack of an alternative to oil-based fuel for aircraft, meant that change was likely to take decades. He added: "If we do see a big drop in consumption, then we will see the price of oil fall, and that will give its competitive position a kick."

Google ads deal puts digital to the fore

Google has signed its biggest cross-media advertising deal with MediaVest, part of Publicis, highlighting the rapid shift of ad budgets to digital media such as YouTube videos, websites and mobile apps. MediaVest, whose clients include Coca-Cola, Honda and Walmart, has committed to spending tens of millions of dollars over the next year to buy advertising on YouTube as well as Google’s web and mobile networks, according to a person familiar with the matter. Google will also help MediaVest measure the effectiveness of ads and create new digital campaigns. The partnership is nonexclusive. "For years, the digital world has been asking for the dollars and laying out a case for why," Brian Terkelsen, chief executive of MediaVest, said. "This is a moment in time where we are beginning to see a new level of transparency, a new level of partnership and a new appreciation of the size of the prize that is available," he added. While consumers are already spending more and more of their time with digital media, advertising spending has lagged behind in this shift. Deals such as this show how marketers are catching up, with potentially negative implications for traditional television – the heavyweight of the advertising business that still attracts $205bn in ad spending annually. Some advertising executives now expect that TV ad spending could plateau after years of growth, since the audience for digital video now has reached sufficient scale that marketers are significantly boosting their ad spending in that area, as well as sorting out new techniques to measure the return on such campaigns. "In many ways, the deal confirms the tremendous momentum that we have on YouTube and the importance of online video to brand marketers," Torrence Boone, Google’s managing director of agency business development said. Mr Boone pointed to a recent campaign from Unilever’s Dove soap brand as an example of how marketers can tap Google’s combination of marketing on YouTube, display ads on the web and mobile as the nexus of their marketing initiatives. With its "Real Beauty Sketches" campaign, Dove hired a forensic artist to draw sketches of women in attempts to convince them of their real beauty. The campaign, which included television, print and other online ads, has attracted more than 160m global views and garnered several industry awards. Laura Desmond, the chief executive of Starcom MediaVest Group, which includes MediaVest, has directed the group to spend more than half of its billings on digital media by 2014. In April, the group struck an advertising deal with Twitter worth hundreds of millions of dollars over several years. Sir Martin Sorrell, chief executive of WPP , said in recent weeks that his advertising group is expected to spend about $2.5bn with Google this year, about double what it spends with Viacom, CBS and Disney individually.