Europe: You have to hand it to Mario Draghi and Mario Monti — they have successfully split the Germans on aid to Spain and Italy. Yes, the head of the Bundesbank, Jens Weidmann, this weekend reiterated his opposition to any "yield caps" that would require the European Central Bank to buy sovereign debt, warning that "central bank financing can become addictive like a drug." But the German member on the ECB board, Jorg Asmussen, has not been so dismissive. German Chancellor Angela Merkel, in a television interview this weekend, also was careful not to voice any direct support for Asmussen, or to criticize Draghi. (Read More: Central Bankers Eye ‘Drug’ That Is Bond Buying.)
Greece, again, is coming to a head. Merkel, in the same TV interview, said everyone should cool down the rhetoric and "watch their words carefully." The Greeks are seeking an extension on the terms of their bailout; officially, no one is committing until the troika (International Monetary Fund (learn more)/European Commission/ECB) produces a report in the next couple weeks. A decision will probably not be made until the European Union finance ministers meet on October 10; there is also an EU Leaders summit October 18-19.
1) Diamonds! Diamonds! My special on the diamond industry, “The Diamond Rush,” airs tonight on CNBC at 9 p.m. ET. See the biggest diamond mine in the world! How diamonds are cut, shaped and polished ... and we take you behind the scenes of the biggest diamond show in the U.S. (in Las Vegas), and on to New York's 47th St., the biggest diamond district in the U.S.
2) Speaking of diamonds: Tiffany at a three-month high. The earnings report was fair, but expectations were low. The luxury goods retailer is reporting second-quarter profit of $0.72 per share, one cent shy of estimates, with sales also falling short of consensus. Worldwide same-store sales decline 1 percent year-over-year. Full-year guidance was lowered to $3.55 to $3.70, from $3.70 to $3.80 due to slower sales growth (6 percent to 7 percent vs. prior guidance of 7 percent to 8 percent).
U.S. sales were down 5 percent on a constant currency basis; the New York flagship store saw sales decline 7 percent on a constant currency basis. Interestingly, gross margins declined 270 basis points ... Tiffany, along with many others, had been raising diamond prices in recent years, but that seems to have stopped.
3) Volume: It's lousy even for options. According to the Tabb Group, contract option volume will decline by 10 percent this year, following nine straight years of gains, to 4.1 billion contracts from 4.5 billion contracts in 2011. Oddly, commissions have risen slightly, to $2.2 billion from $2.1 billion, because market makers are charging higher rates. Why? "Capital is scarcer due to ongoing de-risking by brokers, so firms in need must pay up," Tabb writes.
—By CNBC’s Bob Pisani
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