Stocks rise with S&P 500 capping best week since 2013

US  stocks  rose  as  companies  from  Procter  &  Gamble  Co.  to  Microsoft Corp.  climbed  after  reporting  earnings.  The  S&P  500  added  0.7%  to 1,964.57. The Dow climbed 127.51 points (0.8%) to 16,805.41.

Sales of new US homes little changed after August revision

Purchases of new homes in the US  were little changed in September after the prior month was revised down, showing an uneven recovery that  will limit  how  much  residential  real  estate  contributes  to  growth.  Sales  rose 0.2% to a 467,000 annualized pace from a 466,000 rate in August that was 7.5%  weaker  than  previously  estimated,  Commerce  Department  data showed.  The  median  forecast  of  economists  surveyed  by  Bloomberg called for the pace to decelerate to 470,000.

IMF sets 0.05% floor on interest rate on Special Drawing Right (SDR)

The  IMF  is  setting  a  0.05%  floor  on  the  interest  rate  used  to  determine borrowing costs for some of its loans. The SDR interest rate was quoted on the IMF website at 0.03% currently compared with 0.13% in April and more than 3%  in August 2008, before central banks slashed borrowing costs to zero to boost growth in the aftermath of the financial crisis. The rate will be 0.05% on Oct. 27, the IMF said.

ECB review marks end of Europe banking crisis, Dijsselbloem says

The  ECB’s  stress  test  marks  the  passing  of  the  region’s  banking  crisis, Dutch  finance  minister,  Jeroen  Dijsselbloem  said.  “I  definitely  think  the banking  crisis  is  behind  us,”  he  said.  Twenty-five  of  130  lenders  tested failed the balance-sheet review led by the ECB,  which found the biggest capital hole lurking in Italy. While the Frankfurt-based institution identified a total  shortfall  of  €25bn  (US$32bn),  most  of  that  is  covered  by  measures undertaken by the banks this year.

Merkel changes tone as she hints at euro-area investment needs

German Chancellor Angela Merkel indicated she is ready to make a grand bargain  with  France  and  Italy  by  allowing  them  some  leeway  in  meeting deficit-reduction  targets  in  exchange  for  measures  to  make  their economies  more  competitive.  Merkel  echoed  comments  made  by  ECB President  Mario  Draghi  that  countries  needed  to  match  the  ECB’s loosened monetary policy by taking action to boost domestic demand.

India must bring down inflation to spur growth, Subramanian says

India must curb inflation and the budget deficit to revive economic growth from  near  a  decade  low,  Chief  Economic  Adviser  Arvind  Subramanian said. Clearing infrastructure bottlenecks and improving decision making by the  bureaucracy  also  are  key  to  boosting  the  pace  of  expansion  8%. Restarting  stalled  projects  by  clearing  hurdles  such  as  coal  and  power shortages is also among the government’s priorities, Subramanian  said. A growth rate of about 5%, as seen in the last  two fiscal years, is “not even remotely enough” to provide jobs to India’s growing labor force.

Crude gives back gains, Saudi oil policy seen unchanged

WTI  retreated from the biggest gain since September amid speculation a drop in Saudi Arabian oil supply to the market isn’t a signal for production cuts.  Brent  for  December  settlement  decreased  US$0.70  (0.8%)  to US$86.13 a barrel on the ICE Futures Europe exchange.

Source: Bloomberg