China Buys Big Stake in US Onshore Reserves

The IMF meeting this weekend produced no concrete proposals to reduce tensions around the global currency wars. No change in the "sell the dollar" trend.

Meanwhile, over the weekend, UBS joined the chorus saying that the Fed will get more active, but with a caveat: "We now believe the Fed will formally announce renewed Fed balance sheet expansion (aka 'QE2') after the Nov. 2-3 FOMC meeting."

But the report warns that bond traders are likely to be disappointed, because the Fed is unlikely to announce an open-ended, multi-quarter commitment to buy Treasurys, instead opting to buy approximately $35-65 billion per month, reviewed once a quarter. (See: Bond Market at 'Extreme Danger Level': Strategist)


1) The first major investment by a Chinese company of U.S. onshore reserves. Chesapeake Energy said China's Cnooc is paying $1.08 billion for a one-third stake in the U.S. company's Eagle Ford shale project in Texas. Cnooc is just investing capital; the company will have control.

2) Citing greater-than-expected shipments, LDK Solar jumps 9 percent after the solar panel maker raised its Q3 revenue outlook to $610 million-$640 million, well ahead of $580 million expected by the Street. Other solar manufacturers (First Solar , Suntech Power , MEMC Electronic Materials are also up 2 percent-3 percent pre-open.

3) Airgas up 3 percent pre-open as a Delaware court has upheld a bylaw proposal from suitor Air Products & Chemicals calling for another annual meeting in January. ARG is appealing.

4) Potash is up 2 percent after reports surfaced over the weekend regarding two potential joint bids for the Canadian fertilizer producer that would rival BHP Billiton's current hostile offer.

The Times of London reported the Ontario Teachers Pension Plan approached Singapore state-investment firm Temasek Holdings to explore a joint bid, while the Economic Times' sources said that China's Sinochen International had also begun discussions with India's NMDC regarding a separate potential offer for Potash.

Separately, the UK's Telegraph reported that Potash was exploring the sale of its nitrogen and phosphorous assets to pay shareholders a $70/share special dividend as part of a breakup plan that would be an alternative to BHP Billiton's hostile bid.

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