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BRIEF
MOST READ ON BLOOMBERG Furloughs Feed Federal Worker Insecurity Fed Hampered by Dearth of Data BOJ Refrains From More Stimulus Twitter IPO Implies Value of $12.8 Billion DATA REPORTS (NEW YORK TIME)
TIME EVENT

Economics 10.04.13
FRIDAY
news, Analysis & commentary
WHAT TO WATCH: The

www.bloombergbriefs.com

Feds Fisher, Dudley, Swiss Regulator, Barclays

Federal Reserves Bank of Dallas President Richard Fisher will speak on the economy in Little Rock, Arkansas, 7:30 a.m. The Federal Reserves Bank of Darshini Shah New York President William C. Dudley is scheduled to speak in New York, 9:15 a.m. The Bank of Japan refrained from adding to monetary stimulus. Switzerlands financial markets regulator said it was investigating several financial firms about the possible manipulation of foreign exchange rates.
DayBOOK:

Lockhart Says Shutdown Vindicates No Taper

SURvEY ACTUaL PRIOR

5:00 5:00 5:00 5:00 6:00 6:00 6:00 6:00 9:00 9:30 9:30 9:30

EC PPI MoM EC PPI YoY IC Trade Balance HR Retail Trade Real YoY IR Industrial Production YoY LV Industrial Output MoM

0.1% -- --

0.0% 8800 2.6%

0.3% 0.2% 2917 0.4% -8.7% -7.6% 1.8% 2.1% -0.07

ECONOMICS: Euro-area producer prices remained unchanged in August from a month earlier. U.K. new car sales hit the highest level in more than five years. GOVERNMENT: President Barack Obama canceled plans to attend two economic summits in Asia as a partial U.S. government shutdown enters a fourth day. COMPANIES: Barclays investors bought 94.6 percent of shares in its rights offering. MARKETS: European and Asian stocks fell, set for their biggest weekly losses since August. West Texas Intermediate oil fell for the fourth time in five days, trimming its first weekly gain in a month. Gold held above $1,300 an ounce. Rubber posted the biggest weekly loss since May. The dollar weakened for a fourth day against the yen. Taiwans dollar touched an eight-month high.

-0.5% -0.8%

IR Industrial Production MoM -- -0.8% -- -5.7% -- -2.0% -- -3.5% -- -- -- -- 53.6 -- -- 0.30% -0.80% --

LV Industrial Output WDA YoY MX Leading Indicators BZ Vehicle Prod. Anfavea BZ Vehicle Sales Anfavea BZ Vehicle Exports Anfavea

-- 340469 -- 329143 -- -- -- -- -- -- 64071 51 0.17% 2.27% 0.00% -0.51%

10:00 CA Ivey PMI SA 10:00 ED CPI MoM 10:00 ED CPI YoY 17:00 CO PPI MoM 17:00 CO PPI YoY

WEEK AHEaD: COmmEntary By JOsEPH BrusuElas, BlOOmBErG EcOnOmIst

Data-Heavy Week Ahead as U.S. Shutdown Persists

Should the government shutdown continue into a second week, the majority of the economic calendar currently scheduled will not be published next week. Thus, any potential market-moving releases will probably revolve around the release of the FOMC minutes, other data published by the Federal Reserve and global central banking talk. Four Fed presidents will speak next week, including Philadelphias
DaTE 10/7 10/8 10/8 10/8 10/8 10/9 10/9 10/9 10/10 10/10 10/10 10/10 10/11 10/11 10/11 10/11 TIME 15:00 7:30 8:30 10:00 10:00 7:00 10:00 14:00 8:30 8:30 9:45 14:00 8:30 8:30 9:55 10:00 US US US US US US US US US US US US US US US US EvEnT Consumer Credit NFIB Small Business Optimism Trade Balance IBD/TIPP Economic Optimism JOLTs Job Openings MBA Mortgage Applications Wholesale Inventories MoM FOMC Minutes Sept 17-18 Initial Jobless Claims Import Price Index MoM Bloomberg Consumer Comfort Monthly Budget Statement PPI MoM Retail Sales Advance MoM Univ. of Michigan Confidence Business Inventories Aug Sep Aug Oct Aug 4-Oct Aug 4-Oct Sep 6-Oct Sep Sep Sep Oct P Aug SURvEY $12.000B -$39.000B 0.30% 0.30% $60.000B 0.20% 0.20% 77.500 0.30% PRIoR STaTUs $10.437B Publishing 94 Publishing -$39.100B Postponed 46 Publishing 3689 Postponed -0.40% Publishing 0.10% Postponed Publishing - Publishing 0.00% Postponed - Publishing - Postponed 0.30% Postponed 0.20% Postponed 77.500 Publishing 0.40% Postponed
continued on next page

ECONOMIC-EVENTS CALENDAR
TIME

8:30 9:15 9:30 10:00 12:30 13:45

US US US EC US US

Feds Fisher Speaks on Economy Feds Dudley to Give Remarks at NY Conf. Feds Stein to Speak at Repo Conference EUs Van Rompuy Speaks in Brussels Feds Lacker Speaks at EECC Feds Kocherlakota on Monetary Policy

Brian Belski on why the long-term outlook for stocks remains bullish even amid the shutdown Back Page

KEENES CORNER

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WEEK AHEaD

JOsEPH BrusuElas

continued from page 1

Charles Plosser and St. Louis James Bullard. European Central Bank President Mario Draghi will speak in the U.S. on Wednesday Oct. 9 and Thursday Oct. 10. Economic data that will be published include the August consumer credit report, initial claims for the week ending Oct. 4, the Bloomberg Consumer Comfort Index and the University of Michigans consumer sentiment survey.

Government Furloughs Unlikely to Affect Claims

400
375 350

Wholesale Prices Signaling Modest Disinflation

20
Year-Over-Year Percentage Change

Initial Claims

4-Week Moving Average

15

10 5
0

Thousands

325
300

-5 -10
-15 -20

275 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Source: Bloomberg INJCJC, INJCJC4 INDEX<GO>

PPI PPI Excluding Food and Energy PPI Intermediates PPI Intermediates Excluding Food and Energy
2006 2007 2008 2009 2010 2011 2012 2013

Jul-13

Aug-13 Sep-13

PPI YOY, PPI XYOY, PPIITYOY, PPIIXYOY INDEX<GO>

2003 2004 2005 Source: Bloomberg

Jobless Claims, Thursday: Claims for the week ending Sept. 28 were relatively unchanged and reaffirmed the underlying trend in the data which indicate a slower pace of firings. Going forward, claims filed by furloughed government workers will be tallied in the government category and will not influence the headline estimate. Private firms that depend on government contracts may place modest upward pressure on the topline estimate.

PPI, Friday: The mid-summer increase in oil and gasoline prices barely made a dent in the producer price index. With geopolitical tail risks receding for the time being, the underlying trend of mild disinflation in wholesale prices will probably reassert itself in coming weeks. Intermediate prices, which policy makers pay close attention to, are up 0.5 percent per annum and core intermediates have increased 1.3 percent, which indicates that pipeline pressures present little risk to the economic outlook.

Retail Sales Slowing Afer Early Year Bounce

10

Shutdown May Affect Consumer Confidence

100 95

University of Michigan Consumer Confidence (LHS) Bloomberg Consumer Comfort (RHS, Inverted)

Year-Over-Year Percentage Change

8 6
Index

90 85 80
75 70

-5
-15
Index

-25

-35
-45 -55

2 0

Retail Sales Excluding Autos & Gasoline Excluding Autos, Building Materials and Gasoline
2013

65 60 55 2006 2007 Source: Bloomberg 2008 2009 2010 2011 2012 2013
CONSSENT, COMFCOMF INDEX<GO>

2010 2011 2012 Source: Bloomberg RSTAYOY, RSTAXAXG, RSTAXABG INDEX<GO>

Retail Sales, Friday: Retail Sales for the month of September will probably be bolstered by the Apple Effect due to the introduction of the iPhone 5, so the risk of a topline sales increase well above the Bloomberg consensus forecast of 0.2 percent exists. The impact of electronic sales should provide a boost, albeit temporary, to the key retail sales component that excludes autos, building materials and gasoline and which feeds into the calculation of spending used to estimate GDP.

Consumer Sentiment, Friday: With the Bloomberg Consumer Comfort Index moving lower throughout last month, there is a probability that the University of Michigans survey on consumer sentiment may also decline for the month of September. Given the nature of the government standoff, it carries significant risk to overall consumer and business sentiment.

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MaRKET CaLLs
By BlOOmBErG NEws

TWEET OF THE DAY

For simple solutions to follow tweets about companies, industries and markets on the Bloomberg terminal run TWTR<GO> Kit Juckes, Just a middle-aged, fat bald fool trying hard to make sense of markets and economics. My views. Mine alone.

Mikio Kumada, a global strategist at LGT Capital Partners, said he had increased allocation to cash, and taken a little bit of money off the table from equity markets. The markets will be choppy, Kumada said. Tom Power, senior commodities broker at RJO Futures, said he wouldnt be surprised to see WTI break below $100 a barrel next week. The government shutdown will have a big impact on our already-disappointing economic data and make a case for less demand, he said. Naeem Wahid, a strategist at Bank of America-Merrill Lynch, expects the EUR/ GBP rate to come back to the middle of its previous eight-month trading range of between 0.84 and 0.88. U.K. growth expectations from leading indicators are high and unlikely to be sustained in medium term, Wahid said. The Commonwealth Bank of Australia

expects the Australian dollar to trade at 94 U.S. cents by end-2013, from 92 previously. It also raised its New Zealand dollar, euro and pound forecasts to 83 U.S. cents, $1.34 and $1.63, respectively, by the end of the year. Deutsche Bank AG says a possible credit-rating downgrade and Brazils biggest current-account deficit in 11 years will cause the real to reverse recent

gains. Its a good time to put the trade back on, said currency strategist Daniel Brehon. Brazil is the most vulnerable in the region. Nomura Holdings Inc. is expecting the yield on Indias 19-year bonds to fall to 8.2 percent within three months. We suggest investors start scaling into long bond positions in India rates, said rates strategist Vivek Rajpal.

TRADE. AND TRY NOT TO GET STARSTRUCK.

On October 17, 2013, we will donate commissions from every trade to a charitable cause. Just call our New York or London desks on the day to have your trade handled by a celebrity and help make a difference to those in need.

2013 Bloomberg Finance L.P. All rights reserved. 54907283 0813

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Most Investors Optimistic on Global Economy, Survey Finds

21% Fed Ends QE After 2015
25 20

ovERnIGhT
BY BlOOmBErG nEws

ASIa

15
10

The Bank of Japan retained a goal of expanding the monetary base by at least 60 trillion ($617 billion) a year. The Hong Kong purchasing managers index rose to 50 in September from 49.7 in August, HSBC and Markit Economics said today. Malaysias exports rose 12.4 percent in August from a year earlier. This was higher than the median estimate of a 4.7 percent rise from 18 economists surveyed by Bloomberg. Imports rose 14.1 percent in the month from a year earlier, compared to a median estimate of a 9.9 percent gain.

5
0

21% Euro-Area Economy Deteriorates

Source: Bloomberg Global Poll

13%

U.S. Defaults

Percentage of Investors

A minority of investors remain gloomy about the global economic outlook, according to a Bloomberg Global Poll. Thirteen percent doubt Barack Obama and Congress will reach agreement on the debt ceiling in time to avoid a U.S. default, and 21 percent believe the Fed will not end its bond purchases until after 2015. The euro-area economy is seen deteriorating by 21 percent of investors.
Niraj Shah, Bloomberg Economist

EUROPE

AROUND THE WEB New research and commentary on the Web Max Sawicky, writing for the Economic Policy Institute blog, says Obamacare isnt causing an increase in part-time employment. One of the more baffling messages in the current debate over the economy and Obamacare is the hue and cry over the trend in part-time employment. The fact is that since the end of the Great Recession, the trend in part-time employment has been down, not up.
http://goo.gl/6zrHcy

The Portuguese government raised its 2014 growth forecast to 0.8 percent from 0.6 percent. It expects the economy will shrink 1.8 percent this year, less than its previous estimate of 2.3 percent. The unemployment rate will be 17.4 percent this year, lower than an earlier projection of 18.2 percent. Euro-area producer prices remained unchanged in August from a month earlier, when they climbed 0.3 percent. This was lower than the median estimate of a 0.1 percent gain from 15 economists surveyed by Bloomberg News. Over the year, producer prices fell 0.8 percent. A separate report showed that German producer prices fell 0.5 percent in August from a year earlier. U.K. new car sales jumped 12.1 percent in September from a year earlier, marked a 19th successive month of year-on-year gains. A separate report showed that the U.K. Lloyds Bank Commercial Consumer Barometer climbed to minus 13 in September from minus 22 in August.

A Cleveland Fed working paper examines whether thresholds or dates are optimal in monetary policy communcations. While clear thresholds are clearly desirable, they are also challenging. It is hard to quantify the exact economic conditions that the Fed will consider when deciding to increase the funds rate or taper QE purchases.
http://goo.gl/OkU6gF

A Bank for International Settlements working paper reviews the transmission of monetary policy of the major advanced economies to East Asia through monetary policy reactions, integrated bond markets and induced currency appreciation. We present new results on the growth of foreign currency credit, especially U.S. dollar credit, as a transmission mechanism.
http://goo.gl/gkER3N

ONE OF THE 101 FINANCE PEOPLE YOU HAVE TO FOLLOW ON TWITTER - BUSINESS INSIDER

FOLLOW KEVIN

DEPEW

>>> @kevindepew

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EURopE wEEK ahEad

NIRAJ SHAH, BLOOMbERG ECOnOMIsT

Away from the U.S. government crisis, the European focus of investor attention next week will probably be the IMFs World Economic Outlook on Tuesday and the Bank of Englands monetary policy decision on Thursday. Data releases include the Sentix investor confidence index for September and German factory orders for August.

Confidence
50

IMF
6
4

40 30
20

European Sentix Investor Confidence

2 0%
-2

10 0
-10

-20 -30
-40

-4

World GDP (YoY)

-6 Source: Bloomberg, IMF

Euro-Area GDP (YoY)

IMF Forecasts

-50
Source: Bloomberg

The Sentix survey of euro-area investor confidence on Monday may increase to 10.6 this month from 6.5 in September, a Bloomberg survey shows, due to increasing evidence the economy is growing since exiting recession in the second quarter. The gauge turned positive last month and is above the 10-year average of 0.86 for the first time since July 2011. The index is based on a survey of about 850 investors.

The IMF will update its global GDP forecasts on Tuesday. The fund previously forecast global growth of 3.3 percent and 4 percent in 2013 and 2014, respectively. The euro-area economy was projected to contract 0.3 percent this year and grow 1.1 percent next year. Managing Director Christine Lagarde warned yesterday a failure to raise the U.S. debt ceiling by Oct. 17 remains a threat to the global economy.

German Orders
% 40

BOE
Recession

% 8.5

30 20 10
0 -10 -20

8.0 7.5 7.0 6.5 6.0 5.5 5.0

BOE Forecast U.K. ILO Unemployment Rate

Bank of England 7% Threshold

-30 -40 -50 Source: Bloomberg

German Factory Orders (YoY)

4.5 Source: Bloomberg

Tuesdays German factory orders data may show an increase of 1 percent in August, according to a Bloomberg survey. German output, which accounts for 4.7 percent of global GDP, grew 0.7 percent in the second quarter. Growth will normalize and stabilize in the rest of the year, the Bundesbank said on Aug. 19. The central bank forecasts the economy will expand 0.3 percent this year and 1.5 percent in 2014.

The BOE will keep its policy rate at 0.5 percent for a 55th month on Thursday and maintain the asset-purchase program at 375 billion pounds, surveys show. Governor Mark Carney said last week he saw no need for more QE, given the gathering pace of the recovery. The economy probably grew 1.2 percent in the third quarter, according to Markit. The governor maintains the BOE will not raise rates until the jobless rate falls below 7 percent.

FOLLOW NIRAJ SHAH ON TWITTER FOR REGULAR UPDATES AND ADDITIONAL INSIGHTS

>>> @economistniraj

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AsIa WEEK AhEad

TAMARA HEnDERsOn, BLOOMbERG ECOnOMIsT

Foreign institutional investors bought $1.05 million of equities in India, Indonesia, South Korea, the Philippines, Taiwan, Thailand and Vietnam in the week ended Oct. 2, compared with net purchases of $2.6 billion a week earlier. The Indonesian rupiah led regional currencies against the dollar, gaining 1.2 percent, while the Malaysian ringgit trailed with a loss of 0.2 percent. Key data releases next week include Chinas exports and Singapores GDP. In addition, the Bank of Korea and Bank Indonesia will announce policy decisions.

Singapore
25 Singapore GDP YoY% (ls) 20 15 10 55 Global PMI (rs) 60

Indonesia
9% 8% 7% 6% Indonesia Reference Rate (ls)
USD/IDR (rs)

Indonesia CPI YoY (ls)

12,000 11,500 11,000 10,500 10,000 9,500 9,000

5 0 -5 -10 2002 2003 2004 2005 2006 2007 2008 Source: Bloomberg, JPMorgan; SGDPYOY Index 2009 2010 2011 2012 45
50

5% 4% 3% Oct-10 Mar-11 Aug-11 Jan-12 Jun-12 Nov-12 Source: Bloomberg; IDBIRATE, IDCPIY Index, IDR Curncy

8,500 8,000 Apr-13 Sep-13

Oct. 8, Singapore GDP: Growth may have improved in the third quarter, using the uptrend in global PMI as a signpost. While China focuses on the quality, instead of quantity, of growth, indicators from the U.S., Europe and Japan suggest stronger demand. Private consumption has been steady, albeit soft, while a pickup in government spending has helped offset weaker investment. Net exports, which account for 25 percent of GDP, are no longer contracting.

Oct. 8, Bank Indonesia Reference Rate: Bank Indonesia may pause, having raised its reference rate by 150 basis points since June 13. Inflation is showing early indications of stabilizing and the sharp ascent in USD/IDR has stalled. The central banks primary objective is to maintain stability in the rupiah, which has lost 15 percent against the dollar this year. CPI inflation stood at 8.4 percent in September, well above BIs upper threshold of 5.5 percent.

Korea
20% 15% 10% 5% 0% -5% -10% Sep-11 Jan-12 May-12 Sep-12 Source: Bloomberg; KOIPIY Index, JPYKRW Curncy Jan-13 May-13 Korea Industrial Production YoY (ls) JPY/KRW YoY% (rs) Moving Average IP YoY (ls) 15

China
70
10
5 0

60 50 40 30 20 10 0
-10

China Exports YoY% China Exports to the EU, YoY% China Exports to the U.S., YoY%

-5
-10 -15

-20
-25 -30

-20 Sep-09

Mar-10

Sep-10

Mar-11

Sep-11

Mar-12

Sep-12

Mar-13

Sep-13

Source: Bloomberg; CNFREXPY, CHEXEU, CHEXUS Index

Oct. 10, South Korea Seven-Day Repurchase Rate: Slow inflation, below-trend growth and a sharp blow to competitiveness from a significantly weaker yen allow scope for the Bank of Korea to cut rates further. Inflation is 0.8 percent compared with the 3 percent target, while growth is 2.3 percent compared with the 10-year trend of 3.6 percent. The Japanese yen is 23 percent cheaper than the Korean won compared with a year ago, presenting a significant threat to exports.

Oct. 12, China Exports: The Global Manufacturing PMI rose to 51.8 in September, the highest since June 2011, signaling expansion and stronger demand for Chinese exports. Having contracted for four consecutive months, shipments to the EU and U.S., Chinas largest trading partners, rose on a year-on-year basis in July and August. On a sequential basis, export growth was softer in August. Government stimulus may have lifted import growth, further narrowing the trade surplus.

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oRanGE booK Retailers Worried About Highly Promotional Environment

RIChaRd YaMaRonE
and this global unrest, and we just dont want to get ahead of ourselves. Zale Corp [ZLC] Earnings Call 8/28/13: Overall, we continue to take a conservative view of market conditions in both the U.S. and in Canada. That being said, we do expect to continue to achieve positive top line growth. We expect store closures will impact our overall revenue growth for the year by about 250 basis points. It represents net closures of approximately 50 to 55 retail locations. DSW Inc. [DSW] Earnings Call 8/27/13: We did have a traffic decline in Q2, sort of similar to what just about every other retailer in America has reported. Guess? [GES] Earnings Call 8/28/13: The Korean business continued to be strong as revenue grew in the high single digits in local currency during the quarter. This was offset with the weakness from China, where we are seeing clear evidence of a pullback in consumer spending behavior because of the slowdown in the economy. Hewlett-Packard [HPQ] Earnings Call 8/21/13: From a macroeconomic standpoint we see a continued weak enterprise spending environment. Sentiment in the U.S. is improving, although its not translating to our results yet due to inconsistent execution. I would characterize Europe as challenging and China continues to be soft. Were also seeing acceleration in trends driving customers to the cloud and shifting to mobility. Aeropostale [ARO] Earnings Call 8/22/13: Our business trends in the second quarter did not change materially from earlier in the year, which was disappointing given the level of change we registered with the brand. This performance in the third quarter outlook is being influenced by a challenging retail environment, with weak traffic trends and high levels of promotional activity. Lowes [LOW] Earnings Call 8/21/13: The industry outlook for the second half hinges on the impact of steep increases in mortgage rates experienced over the last few months. The rate increases will likely
Bloomberg Economist

The Bloomberg Orange Book Sentiment Index was 48.19 during the week ended Oct. 4, essentially unchanged from the 48.28 registered during the week ended Sept. 27.

take some steam out of the recent housing market rebound, but shouldnt derail it as long as job gains persist, homes continue to appreciate, and rates rise more gradually going forward. Dollar Tree Inc. [DLTR] Earnings Call 8/22/13: In our current economy with customers facing stubbornly high unemployment, unpredictable fuel prices and higher taxes people continue to look to Dollar Tree as a destination for a balanced mix of high value consumer products and a terrific assortment of fun, high value and high margin variety merchandise. Hormel Foods [HRL] Earnings Call 8/22/13: The weakness for Refrigerated Foods was clearly the most pronounced in the earlier part of the quarter, ending up prompting us to come out with our guidance adjustment that occurred mid-quarter. At that stage, we were seeing some continued weakness in processing margins, but the bigger culprit had been the spike in some of the raw material costs.

Chicos FAS [CHS] Earnings Call 8/28/13: Traffic was our issue in quarter two. In a highly promotional and challenging environment, comparable sales result was a negative 2.6 percent on top of a positive 5.6 percent last year and a positive 12.8 percent in 2011. Brown-Forman [BF/B] Earnings Call 8/28/13: We have a strong presence in the U.S. and Europe, markets where we are driving strong rates of growth, and the economic outlook looks better than the current trajectory for many of the emerging markets. And while markets such as Brazil and China appear to be taking a respite from the torrid pace of growth they have enjoyed over the last decade. William-Sonoma [WSM] Earnings Call 8/28/13: The retail environment, it seems to indicate theres still a lot of uncertainty out there, that the promotional environment has not gone away and that the retail environment in general continues to be choppy, especially with the recent earnings releases

To SEE OrANgE BooK PoStINgS oN tHE BLooMbErg tErMINAL tYPE NI ORANGEBOOK <go>

Follow Richard Yamarone on Twitter for regular updates and additional insights @yamarone

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The latest entries showed corporate concerns regarding the higher interest rate environment a heightened concern amid possible Fed-tapering and the subsequent effects on housing and demand for goods related to the home. The restaurant and some apparel retailers complained about decreased traffic, softer consumer spending, a smaller ticket, and extremely promotional environment. Global conditions were mixed, with the U.S. and Europe believed to be the best of the bunch.

This performance in the third quarter outlook is being influenced by a challenging retail environment, with weak traffic trends and high levels of promotional activity.

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MaRKET IndICaToRs

MSCI EQUITY INDICES

TICKER
MXCA Index MXUS Index MXAR Index MXBR Index MXCL Index MXCO Index MXMX Index MXPE Index MXAT Index MXBE Index MXCZ Index MXDK Index MXFI Index MXFR Index MXDE Index MXGR Index MXHU Index MXIE Index MXIT Index MXNL Index MXNO Index MXPL Index MXPT Index MXRU Index MXES Index MXSE Index MXCH Index MXGB Index MXEG Index MXIL Index MXJO Index MXMA Index MXZA Index MXAU Index MXCN Index MXHK Index MXID Index MXIN Index MXJP Index MXKR Index MXMY Index MXNZ Index MXPH Index MXPK Index MXSG Index MXTH Index MXTR Index

COUNTRY Canada U.S. Argentina Brazil Chile Colombia Mexico Peru Austria Belgium Czech Rep. Denmark Finland France Germany Greece Hungary Ireland Italy Netherlands Norway Poland Portugal Russia Spain Sweden Switzerland U.K. Egypt Israel Jordan Morocco South Africa Australia China Hong Kong Indonesia India Japan Korea Malaysia N. Zealand Philippines Pakistan Singapore Thailand Turkey

LAST PRICE 1608.0 1609.3 1726.3 2391.9 2004.7 1181.4 6577.0 1076.1 117.3 69.9 254.1 4860.7 91.1 115.4 117.8 18.0 934.0 31.9 52.3 94.1 2483.9 1710.0 51.9 789.6 101.9 9589.7 1023.1 1906.4 1170.1 188.1 185.7 262.5 1084.7

1D %Chg

YoY %Chg

52W Min 1485 1291 948 2,053 1,809 1,028 5,951 1,020 99 59 223 4,229 66 94 98 11 934 25 43 76 2,250 1,543 46 668 81 7,829 843 1,659 992 179 172 247 916 881 51 10600 4,487 699 439 509 569 94 880 352 1,553 455 928K

Average 52W Last Max 1631 1652 1752 2842 2601 1393 7772 1681 119 72 324 5032 93 117 119 18 1107 32 53 96 2518 1810 56 863 102 9893 1083 2023 1282 203 235 314 1096 1084 66 12380 6149 796 794 592 653 110 1224 515 1823 573 1327K

FORW. PE 12M 13.7 14.4 7.9 10.4 15.4 17.1 17.1 11.4 11.0 15.4 10.3 15.1 16.5 12.5 11.6 14.4 8.2 26.2 11.2 13.2 10.6 12.9 15.4 na 12.8 14.8 14.6 12.0 6.8 8.3 n.a. 10.2 13.7 14.4 8.9 14.8 12.9 13.9 14.1 8.4 14.9 16.7 18.0 7.7 n.a. 11.5 9.7

10Y GOVERNMENT BOND YIELDS

TICKER
GCAN10YR Index USGG10YR Index

COUNTRY Canada U.S. Argentina Brazil Chile Colombia Mexico Peru Austria Belgium Czech Rep. Denmark Finland France Germany Greece Hungary Ireland Italy Netherlands Norway Poland Portugal Russia Spain Sweden Switzerland U.K. Israel South Africa Australia China Hong Kong Indonesia India Japan Korea Malaysia N. Zealand Philippines Pakistan Singapore Thailand Turkey

LAST 1D CHG YoY YIELD BPS BPS

North America

52W Min 1.7 1.6 10.5 4.7 4.4 3.9 1.5 1.9 1.5 1.0 1.3 1.7 1.2 8.1 4.9 3.4 3.8 1.5 2.0 3.1 5.2 2.7 4.0 1.4 0.4 1.6 3.5 6.0 3.0 3.4 0.5 5.1 7.1 0.4 2.7 3.1 3.2 3.0 10.7 1.3 3.3

Average Last

52W Max 2.8 3.0 12.2 7.6 6.6 6.1 2.5 2.9 2.5 2.2 2.3 2.6 2.0 18.5 7.3 4.3 5.1 2.5 3.3 4.9 8.9 4.8 5.9 2.7 1.2 3.0 4.3 8.4 4.2 4.2 2.6 8.9 9.2 0.9 3.7 4.1 4.8 5.2 13.0 2.8 4.4

5Y CDS n.a. 38.0 2501 171.7 89.3 132.5 120.8 144.5 28.2 59.0 59.6 24.0 22.3 66.7 24.2 1065 276.3 137.5 241.8 49.5 15.8 85.7 451.3 174.8 212.8 18.3 n.a 31.8 119.1 198.9 n.a. 85.2 n.a. 281.7 n.a. 62.1 82.9 105.9 n.a. 108.3 n.a. n.a. 118.9 214.5

North America

Latin America

-0.8% 2.9% -0.9% 15.5% -0.7% -0.9% 0.4% -0.2% -1.9% 0.5% -1.0% 0.4% -0.5% 0.2% -0.6% 0.3% 0.0% 2.7% -1.6% 0.3% 1.0% -0.1% -0.4% -0.8% -0.3% -0.1% 0.5% -0.3% -0.5% 0.0% 56.5% -10.6% -17.9% -3.8% -4.5% -30.0% 17.3% 13.3% -19.9% 7.3% 35.5% 21.0% 15.1% 61.8% -11.1% 22.4% 11.7% 20.8% 6.3% 4.2% 8.9% -0.7% 19.7% 16.9% 19.3% 10.5%

2.54% 2.62% 11.70% 6.92% 6.00% 5.48% 2.22% 2.60% 2.28% 1.99% 2.05% 2.35% 1.82% 9.23% 5.74% 3.78% 4.31% 2.21% 3.00% 4.41% 6.49% 4.13% 4.22% 2.52% 1.05% 2.71% 3.75% 7.65% 4.03% 4.07% 2.10% 8.10% 8.58% 0.65% 3.40% 3.72% 4.61% 3.88% 13.01% 2.36% 3.82%

Latin America

-0.5 1.5 0.9

82.2 94.6 208.9 70.0 69.5 n.a.

GEBR09Y Index COGR10Y Index GMXN10YR Index GRPE10Y Index GAGB10YR Index GBGB10YR Index CZGB10YR Index GDGB10YR Index GFIN10YR Index GFRN10 Index GDBR10 Index GGGB10YR Index GHGB10YR Index GIGB10YR Index GBTPGR10 Index GNTH10YR Index GNOR10YR Index POGB10YR Index GSPT10YR Index RUGE10Y Index GSPG10YR Index GSGB10YR Index GSWISS10 Index GUKG10 Index

Europe

Europe

0.0 0.0 15.0

Middle East & Africa

Middle East & Africa

1.1 18.9 1.0 10.9 -0.9 -2.9 1.9 72.9 3.3 29.0 0.8 18.3 2.4 37.1 -1.9 -3.0 -163.0 0.5 na -6.7 -82.8 3.0 48.2 -0.5 93.2 1.0 -31.4 -11.3 -217.9 1.1 117.6 -2.7 -168.6 0.4 105.1 0.7 53.8 3.6 101.0 -5.0 -2.8 -44.0 61.7

Asia/Pacific

0.4% -6.4% 0.0% -4.9% 2.8% -15.7% 1.0% -12.0% -0.4% 16.5% -0.5% -0.1% -0.4% -0.8% 0.0% -0.9% 0.0% 0.3% -0.8% -0.1% 0.1% -0.2% -0.7% -0.5% 17.5% 10.9% 11.5% -1.6% 3.5% 59.1% 0.9% 8.2% 13.8% 18.4% 29.8% 1.9% 2.9% 12.8%

GISR10YR Index

GSAB10YR Index GACGB10 Index GCNY10YR Index HKGG10Y Index GIDN10YR Index GIND10YR Index GJGB10 Index GVSK10YR Index MGIY10Y Index GNZGB10 Index PDSF10YR Index PKIB10YR Index MASB10Y Index GVTL10YR Index

Asia/Pacific

1063.6 62.0 12052.7 5064.9 771.5 719.2 580.2 637.5 108.3 1061.7 471.0 1679.7 503.5 1078330

9.1 105.0 0.0 59.0 -2.4 136.3 -0.2 223.2 -6.1 43.0 1.1 -12.1 -1.0 45.0 0.5 18.9 3.4 114.7 -7.5 -105.8 -1.0 184.0 5.0 97.0 -0.6 39.0

OTHER INDICATORS
TICKER
$$SWAP10 Curncy $$SWAP2 Curncy USGGBE01 Index .2Y10Y Index .10YV3MSP Index .TED3M Index .LIBORIOS Index JPEIPLSP Index .AAA10Y Index .AAABAA Index MUNSMT10 Index VIX Index SKEW Index

CURRENCIES
52W Min 2 9 (1.0) 134 149 17 14 229 169 81 86 11.3 112.5 52W Min 439 111 16 627 1,728 302 1,212 19 98 84 257 3.1 276 698 601 218 201 179 Average 52W Last Max 26 20 2.6 253 297 29 21 389 208 118 115 22.7 130 Average 52W Last Max 773 169 22 903 2150 378 1779 35 119 111 320 4.4 309 2127 681 254 239 222 1Y ZSCORE 0.6 (0.4) (0.7) 0.6 1.4 (0.3) (1.0) 1.6 0.7 (1.4) 0.2 1.4 0.7 RSI 30D 36.5 47.5 64.1 58.5 49.2 50.4 47.0 48.4 49.4 48.5 41.0 47.0 47.2 80.8 47.4 46.8 52.8 50.7 TICKER
ARS Curncy BRL Curncy CAD Curncy CLP Curncy COP Curncy MXN Curncy GBP Curncy CZK Curncy DKK Curncy EUR Curncy HUF Curncy NOK Curncy PLN Curncy RON Curncy RUB Curncy SEK Curncy CHF Curncy TRY Curncy UAH Curncy ILS Curncy ZAR Curncy AUD Curncy CNY Curncy HKD Curncy INR Curncy IDR Curncy JPY Curncy SGD Curncy NZD Curncy KRW Curncy THB Curncy TWD Curncy EURGBP Curncy EURNOK Curncy EURCHF Curncy

SPREAD/RATE/INDEX 10Y US Swap Spread 2Y US Swap Spread 1Y Breakeven Rate 2Y10Y Spread 3M10Y 3M Ted Spread 3M Libor/OIS EMBI+ Spread IG Corp Spread IG HY Corp Spread Muni Spread CBOE VIX Index CBOE Skew Index COMMODITY Corn Coffee Sugar Wheat Aluminum Copper Gold Silver Crude (Brent) Crude (WTI) Gasoline Natural Gas

LAST PRICE

Fixed Income

1D Chg YoY bps/% bps/% -0.6 0.1 0.0 0.0 0.0 0.0 0.0 2.1 -1.5 0.0 0.4 1.1 -1.2 8.3 0.4 -0.9 na 105.3 -2.8 -6.7 77.2 16.4 -40.0 -5.6 3.1 -3.1 YoY %Chg -42.0% -34.0% -14.3% -20.7% -14.0% -13.6% -26.7% -38.3%

CURRENCY Argentine Peso Brazilian Real Canadian Dollar Chilean Peso Colombian Peso Mexican Peso British Pound Czech Koruna Danish Krone Euro Hungarian Forint Norwegian Krone Polish Zloty Romanian Leu Russian Ruble Swedish Krona Swiss Franc Turkish Lira Ukranian Hryvnia Israeli Shekel S. African Rand Australian Dollar Chinese Renminbi HK Dollar Indian Rupee Indonesian Rupiah Japanese Yen Singapore Dollar N. Zealand Dollar S. Korean Won Thai Baht Taiwan Dollar Euro-Pound Euro-NOK Euro-Swiss Franc

LAST PRICE

Americas

1D YoY %CHG %CHG

52W Min 4.7 1.9 1.0 467.1 1759.0 12.0 1.5 18.8 5.5 1.3 212.0 5.5 3.1 3.2 29.9 6.3 0.9 1.7 8.0 3.5 8.5 0.9 6.1 7.7 51.9 9585.0 78.2 1.2 0.8 1054.7 28.7 28.9 0.8 7.3 1.2

Average Last

52W Max 5.8 2.5 1.1 518.5 1956.3 13.4 1.6 20.3 5.9 1.4 238.2 6.3 3.4 3.6 33.5 6.8 1.0 2.1 8.2 4.0 10.4 1.1 6.3 7.8 68.8 11649 103.2 1.3 0.9 1161.2 32.3 30.2 0.9 8.2 1.3

1Y ZSCORE 2.1 0.8 0.8 1.0 0.8 1.3 1.2 -2.0 -2.3 2.3 -1.0 1.0 -1.4 -1.5 0.7 -1.6 -2.3 1.8 1.3 -1.3 1.2 -0.9 -1.2 -0.4 1.3 2.8 0.6 0.1 0.5 -1.4 1.0 -0.6 0.2 2.1 0.0

15.9 13.9 0.5 230.7 262.5 22.3 14.8 352.9 196.1 82.0 104.3 17.7 122.3

5.81 0.2% -19.1% 2.21 0.7% -8.3% 1.03 0.0% -5.2% 500.57 -0.2% -5.4% 1887.94 0.0% -4.5% 13.17 0.0% -3.1%
Europe

Equity

COMMODITIES
Agricultural

TICKER C 1 Comdty
KC1 Comdty SB1 Comdty W 1 Comdty LA1 Comdty HG1 Comdty GC1 Comdty SI1 Comdty CO1 Comdty CL1 Comdty XB1 Comdty NG1 Comdty

LAST PRICE

1D %Chg

439.3 115.6 18.5 689.0 1786.0 327.1 1315.9 21.7

Metals

0.0% 0.2% 0.0% 0.0% -0.7% 0.1% -0.1% -0.6%

Middle East & Africa

1.61 18.77 5.48 1.36 218.29 5.95 3.09 3.26 32.15 6.37 0.90 2.00 8.18

-0.5% -0.7% 0.0% 2.1% 0.1% 4.5% -0.1% 4.5% 0.2% 0.2% 0.0% -4.3% 0.3% 1.5% 0.0% 7.4% -0.1% -3.8% 0.3% 3.7% 0.2% 3.3% -0.3% -10.0% -0.2% -0.4%

3.54 -0.2% 9.0% 9.99 -0.4% -14.7%

Asia/Pacific

Energy

109.3 103.6 263.7 3.5 285.6 2047.0 635.5 225.8 209.1 190.3

Indices

0.3% -2.9% 0.3% 12.9% -0.1% -10.4% 0.2% 3.0% -0.3% -8.0% 1.9% 157% -0.2% -2.1% -0.8% -11.8% 0.2% -12.8% 0.7% -13.1%

CRY Index CRB index BDIY Index Baltic Dry Index GI1 COMB Index GS Cmdty Index CMDI3MO Index Bloomberg 3M Cmdty DBLCDBAT Index DBIQ Diversified Ag Index CMDIBASS Index Bloomberg Base Metal Source: Bloomberg. Updated at 5:45 a.m. ET

0.94 6.12 7.75 61.46 11381.0 97.13 1.25 0.83 1070.43 31.30 29.37

Euro Crosses

0.5% -7.8% 0.1% 2.6% 0.0% 0.0% -0.5% -15.8% -1.3% -15.7% -0.1% -19.2% -0.2% -1.4% 0.1% 1.0% 0.1% 4.0% 0.0% -2.3% 0.0% -0.2% -5.0% -8.4% -1.2%

0.85 0.4% 8.10 -0.1% 1.23 0.1%

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This document is being provided for the exclusive use of VICENTE ORTI at REGENT'S COLLEGE
10.04.13 www.bloombergbriefs.com Bloomberg Brief | Economics

KEENES CORNER
Brian Belski, chief investment strategist, BMO Capital Markets, talks to Tom Keene about the long-term bullish outlook for equities even amid a U.S. government shutdown.

Q: What other impact are you seeing? A: You hear a lot of banter about government jobs being lost and what that has to do with fourth-quarter GDP. What we would caution people in terms of buying stocks for the long term based on GDP is remember were not even going to know what the fourth-quarter GDP number is until March. And so by then, we could be significantly higher in the stock market. So if you are waiting around to see what the exact impact is on GDP, we think that could be a bit of a failed strategy. Q: How do you, as a strategist, find a sector or individual stocks? A: Individual stock picking is going to become increasingly important as active investing strategies outperform passive, and especially ETFs. Focus on stocks that are globally diversified; that are not particularly focused on one area. They are not going to get hurt when markets have volatility and they will benefit from the worlds largest economy. Q: Are you enthusiastic about the animal spirit that gets earnings where they need to be? A: We are, from a longer term perspective. Mr. Bernanke clearly is a little bit more worried about the economy than he is leading on in terms of the background information. But longer term, we continue to think that the U.S. is well positioned and, from a volatility standpoint, in terms of fundamentals, Europe clearly is still quite volatile, and so are emerging markets. We actually are huge believers from the secular side of the North American manufacturing renaissance. I think what that ultimately is that businesses are coming back to North America, both the U.S. and Canada, and that is really what is going to drive CapEx and revenue. Q: How should you allocate your portfolio during this unsettled time? A: We would definitely be more skewed towards equities. It depends upon your appetite for risk. That is an important distinction because we think many people dont understand where the risk is. It is in

fixed income. People are still scared of equities, and they dont understand that the inherent risk in a portfolio during the next 12 or 18 months is clearly fixed income.
(This interview was condensed and edited.)

Todays guests: David Malpass of Encima Global; Todd McCracken, NSBA; Howard Lindzon of StockTwits; James Glassman of JPMorgan Chase; William Gross of Pimco

On Air Listen on the radio at these regularly scheduled times and dates.
SURVEIllaNCE

Q: Theres been a lot of discussion about the hope markets would decline to signal to Washington that they need to grow up. Hope doesnt happen in the markets, does it? A: No, it really doesnt. It is more about all reaction, and I still think were stuck in this kind of reactionary period. It is actually elevated since the Fed came out and talked. Now, every little macro data point, were going to sell and buy, sell and buy, sell and buy. That is why we think were going to see periods of elevated volatility. Q: Why does this market go up? Is this the Ben Bernanke put? A: To some degree it is. And he made it pretty clear during his statements that he is a little bit more worried about the economy than most people think. I think the gas is going to remain pretty much on the pedal in terms of monetary policy. We dont really see any kind of major change there for the next few months. And for that reason, we think that is why stocks have actually held in there pretty well. Remember in 1996, 17 years ago, the market went down 3 percent because of the shutdown, and then six or nine months after, the stock market was up 10 percent or 11 percent. So this kind of back and forth gamesmanship that were seeing just adds a little bit more uncertainty. With respect to the longer-term asset mix, youre looking at a balanced portfolio and the like, more and more of the models are going to be telling you to buy stocks. So were starting to see some support there as well.

Weekdays 7:00 AM-10:00 AM. Tom Keene joins Ken Prewitt for Bloomberg Surveillance
BloombERG

oN tHE ECoNomY MondayThursday 7:00-8:00 PM. Tom Keene interviews high-profile guests and looks at the economy.

PodCast Listen on the web at http://www.bloomberg.com/podcasts/surveillance/ Also available on the Bloomberg terminal: BPOD <GO> Twitter / On Demand
Full interviews are available at Tom Keene on Demand http://www.bloomberg.com/tvradio/ radio/ and follow him on twitter @tomkeene

Bloomberg Brief Economics Newsletter Ted Merz Executive Editor tmerz@bloomberg.net +1-212-617-2309 Bloomberg News Dan Moss Executive Editor dmoss@bloomberg.net +1-202-624-1881 Economics Kevin Depew Newsletter Editors kdepew2@bloomberg.net +1-212-617-3131 Nipa Piboontanasawat Chris Kirkham npiboontanas@bloomberg.net ckirkham@bloomberg.net +852-2977-6628 +44-20-7673-2464 Staff Economists Joseph Brusuelas David Powell dpowell24@bloomberg.net jbrusuelas3@bloomberg.net +1-212-617-7664 +44-20-7073-3769 Richard Yamarone Michael McDonough ryamarone@bloomberg.net mmcdonough10@bloomberg.net +1-212-617-8737 +852-2977-6733 Niraj Shah Tamara Henderson thenderson14@bloomberg.net nshah185@bloomberg.net +44-171-330-7500 +65-6212-1140 Newsletter Nick Ferris Business Manager nferris2@bloomberg.net +1-212-617-6975 Advertising Jeff Maniatty jmaniatty@bloomberg.net +1-203-550-2446 Reprints & Permissions Lori Husted lori.husted@theygsgroup.com +1-717-505-9701 To subscribe via the Bloomberg Terminal type BRIEF <Go> or on the web at www.bloombergbriefs.com. To contact the editors: econbrief@bloomberg.net
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Correction on yesterdays issue: In the Oct. 3 Economic Brief article, U.S. Treasurys Dilemma: Priotirize or Delay, the article incorrectly stated that between prioritization and delay, Treasury has indicated that the first one is preferable. Treasury has actually indicated delay is preferable.

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