After failing to break out decisively to new highs last week and looking exhausted by the weekend, US indices have turned lower to start the week. Reports that Japan has officially fallen back into recession with two quarters of negative GDP growth in a row has been an anchor on stocks around the world today with Asia Pacific and North American indices trading lower and European indices treading water. Comments from FOMC Governor Powell reinforcing the potential for a mid-2015 start to interest rate increases, and an Empire Manufacturing index that grew over the previous month but not as much as the street had hoped for haven’t helped matters either. They appear to have offset any enthusiasm from a huge $34B merger in the drilling sector announced today between Halliburton and Baker Hughes. Fears that a slowing global economy could impact resource demand has weighed on commodity prices and resource currencies today with CAD and AUD the worst performers among major currencies to start the week. NZD has been surprisingly strong on the back of positive NZ PMI and retail sales numbers. JPY has not done as badly as some might have thought suggesting that its big plunge of recent weeks had already priced in a recession. Crude oil is down 1% today on demand slowdown fears. Gold is off only moderately, giving back a measly $5.00 of Friday’s $40.00 surge in normal backing and filling. Corporate News Oil and gas driller Halliburton has agreed to acquire competitor Baker Hughes for $34.6B through a combination of cash and shares, valuing Baker Hughes at $78.62/share. Halliburton has agreed to sell up to $7.5B in assets if requested by regulators and the deal has a $3.5B break fee. Economic News Economic reports released overnight and this morning include: Japan GDP (1.6%) vs street 2.2% and previous (7.3%) Japan GDP deflator (inflation) 2.1% vs street 1.9% Japan GDP private consump 0.4% vs street 0.8% Japan GDP business spend (0.2%) vs street 0.9% US Empire manufacturing 10.1 vs street 12.0 UK Rightmove house prices 8.5% vs previous 7.6% Sweden unemployment rate 7.5% vs street 7.3% Norway NOK trade balance 31.6B vs previous 21.6% Eurozone trade balance €18.5B vs street €18.0B NZ service PMI 57.8 vs street 58.0 NZ Q3 retail sales 1.5% vs street 0.8% and previous 1.2%