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Wall Street Breakfast: The Spotlight Turns To Healthcare

Shanghai was sharply lower early in the session, but managed to eke out a 0.3% gain by the end Monday's trade. Hong Kong also finished in the green, adding 0.4%. The Nikkei closed off its lows, but still fell 1.3%. Europe's Stoxx 50 is down 0.9% after a bounce off opening lows failed to take hold. U.S. stock index futures have been moving between gains and losses, but the S&P 500 is currently lower by 0.15%. Nasdaq 100 futures are down 0.4%. All eyes will be on the healthcare sector this week, particularly biotech, after its worst weekly plunge since the financial crisis. Also on tap Friday is the employment report for September.

The IMF warns world GDP at 3.3% this year isn't realistic anymore. "A forecast of 3.8% for next year is not either," said Christine Lagarde. At issue, says Lagarde, is slowing growth in emerging economics (i.e. China). "Perhaps Janet Yellen has heard us," she said, commenting on the Fed's decision not to hike rates two weeks ago. "There is no reason to rush" to tighten policy, she added, noting both the Japanese central bank and the ECB in recent years both hiked and then were forced to quickly retreat. Reversing is much more harmful than a delayed hike, said Lagarde.

Pro-independence parties won a majority 72 seats (out of 135) in Catalonia's regional parliament, but took down only 48% of the vote. Blocked by the national government from holding a referendum on independence, the separatists attempted to turn these elections into just that. While they won a majority of seats, the failure to gain more than 50% of the vote means had this been a referendum, it would have been a loss. "The government in Catalonia will try to move forward with independence, but this result won't allow them to take irreversible steps," says one political analyst. With the rest of Europe lower by more than 1%, stocks in Madrid (NYSEARCA:EWP) are marginally in the green.

Chinese industrial profits fell 8.8% in August year-over-year, according to the National Bureau of Statistics - the largest decline since the government began making the data public four years ago, according to Bloomberg. Coal mining profits plunged 64.9% during the first eight months of the year versus the same period one year ago. "Companies are facing enormous operational pressures," said a bank analyst.

Vodafone says it's called off talks with Liberty Global (NASDAQ:LBTYA) over a swap of assets. Amid rumors of an outright merger earlier this summer, the two confirmed they were talking about swapping some European businesses, but the talks faced challenges from the outset and are over for now. The companies never specified which assets -- though the best fit seemed to be where they had heavy overlap: in Germany, the UK and the Netherlands. But the UK is Liberty's largest market, and Germany is Vodafone's (NASDAQ:VOD) biggest sales market, and it seemed increasingly unlikely the two would bail out of those markets.

Shell halts Alaska oil exploration after disappointing well results. The company had spent $7B targeting finds it thought could be 10x greater than the amount of oil and gas produced thus far in the North Sea. Though there were signs of oil and gas in the Burger J well in Alaska's Chukchi Sea, they weren't enough to warrant further production, and the well will be plugged and abandoned.

Glencore is lower in London action to a new all-time low amid more weak economic data out of China and a report from Investec suggesting the company's high debt level means equity value could be wiped out if commodity prices stay where they are. In line with its just-announced plan to sell assets and pay down debt, Glencore (OTCPK:GLNCY) agrees to unload its Araguaia nickel project in Brazil for $8M to Horizonte Minerals. Horizonte is already developing a nickel project in that area of the country, and this purchase will allow it to combine Glencore's operations with its own.

Shares of SABMiller are higher in London trading on a report the company is pushing Anheuser-Busch InBev (NYSE:BUD) for a higher takeover price. Extended negotiations between SABMiller (OTCPK:SBMRY) and AB InBev could lead to an offer this week in the neighborhood of $106B-$111B. The deal is poised to be the largest takeover of a British company in history.

Today's Markets

In Asia, Japan -1.3% to 1764. Hong Kong +0.4% to 21186. China +0.3% to 3101. India -0.3% to 25784.
In Europe, at midday, London -1.1%. Paris -1.5%. Frankfurt -1.4%.
Futures at 6:20, Dow -0.3%. S&P -0.3%. Nasdaq -0.5%. Crude -0.8% to $45.32. Gold -0.7% to $1137.40.
Ten-year Treasury Yield -3 bps to 2.14%

Monday's Economic Calendar

Monday's economic calendar:
8:30 Personal Income and Outlays
10:00 Pending Home Sales
10:30 Dallas Fed Manufacturing Survey
1:30 PM Fed's Evans: U.S. Monetary Policy
5:00 PM Fed's Williams Speech

Companies reporting earnings today