Last week the number of NEGATIVE developments outnumbered POSITIVE developments. But, the stock markets still moved higher.

Positives:
1) Markets hang in on belief EU officials will come to some sort of an agreement to force Greek bondholders to mark to reality, provide some debt relief to Greece and buy time and refinancing backstop for Italy and Spain
2) Initial Claims, while higher than expected, has 4 week avg at lowest since April
3) Philly mfr’g surprises to upside at +8.7 vs est of -9.4 and -17.5 in Sept
4) Multi-family starts a bright spot for construction industry, reach highest since Oct ’08
5) NAHB home builder survey rises 4 pts to best since May ’10 at 18

Negatives:
1) CPI in Canada 3.2% y/o/y, CPI in Hong Kong 5.8%, CPI in Malaysia 3.4%, CPI in the US 3.9% and last week saw euro zone CPI at 3%. Inflation is a growing problem
2) Months supply of existing homes ticks up to 8.5 from 8.4
3) Operation Twist this: refi’s fall 16.6% and purchases drop 8.8%
4) NY mfr’g at -8.5 vs expectations of -4.0
5) German IFO business confidence lowest since June ’10, French business confidence weakest since July ’10
6) Moody’s downgrades Spain’s credit rating to one notch below S&P and Fitch
7) China’s Q3 GDP rises 9.1%, touch below estimates and Shanghai index down 4 straight days to lowest since Mar ’09 (Source: The Big Picture).