Simone Foxman

The Republican party and its presidential candidate, Mitt Romney, have made much in this election campaign of the claim that the US is forsaking its military might. But it turns out that the Obama administration hasn’t seriously slashed defense spending—at least, not yet. Aircraft manufacturer Boeing and aerospace and defense firm Lockheed Martin both said that defense spending was going strong when they reported earnings today. Indeed, Boeing even said there was “unusual strength” in its defense sales from the quarter.

A link from CNBC via Twitter

A link from CNBC

Investors have rapidly sold shares of Netflix stock in after-hours trading since it announced earnings today (pdf), worrying about uneasy signs that the movie subscription service is making a risky gamble. The company reported that it spent more money to operate than it earned in the third quarter, and will do so for a while to come. It also saw earnings per share of $0.12, more or less in line with expectations.

The US Federal Reserve has been pushing down interest rates to unprecedented levels through repetitive rounds of quantitative easing (QE). The motive? Help the housing market and stimulate employment. But while we’ve shown that QE is working to generate a housing recovery, unemployment remains stubbornly high at 7.8%. And yet the US stock market is up 12.4% since the start of the year.

The new “iPad mini” will be the star of today’s Apple event. But beyond the hype, there’s one important announcement you probably missed: iMessage, which allows customers to send free messages over Wi-fi and 3G connections, has been incredibly successful. Since it launched last year, customers have sent 300 billion messages, or at a rate of 28,000 per second.

A link from Businesswire

German automakers begin reporting earnings this week, and the picture doesn’t look pretty. New car registrations have fallen 10.8% in the euro area during last ten months, as increasingly wary and increasingly unemployed Europeans refrain from buying cars. With high debt levels—and facing tighter credit standards in the markets—some of those companies are looking more vulnerable to a European economic downturn.

A summit of European leaders that took place last week produced lots of talk but little in the way of tangible reforms. Leaders made the most compelling progress on the Single Supervisory Mechanism (SSM)—a banking regulator that would oversee all euro area banks—giving us yet another acronym to remember. They outlined the most basic plans for the bank supervisor, and implementation of those proposals will be phased in over the course of the next year.

Shares of the company behind Monster Energy drinks have plummeted after a report linked the highly caffeinated beverages to a 14-year-old girl’s death last December. The US Food and Drug Administration said the girl died of a heart arrhythmia after drinking cans of Monster Energy on two consecutive days.

Machinery manufacturer Caterpillar (CAT) slashed expectations for 2013 today, saying its outlook on economic conditions around the world has weakened substantially. It now plans to bring in $66 billion for 2012, as opposed to the $68 billion to $70 billion it had previously forecast. The company is widely regarded as a bellwether for construction growth around the world.

Nokia has been losing money and market share since late 2009. So why did three out of eight analysts on this morning’s earnings call congratulate the Finnish company on its third-quarter performance?

Most of the major US banks reported third-quarter earnings this week, and almost all remarked on one notable bright spot: housing. Most saw profits from mortgage loans rising, enough for JPMorgan CEO Jamie Dimon to declare that “housing has turned the corner.”

Moody’s rating agency affirmed the Spanish government’s Baa3 credit rating today, maintaining its negative outlook. The lack of a downgrade means Spain’s rating is still “investment-grade,” albeit on the lower end of that distinction.

Tensions in Europe have fallen since late July, after the European Central Bank (ECB) announced new measures to support struggling European states on bailout programs. Investors have flooded back into Europe with a vengeance since, buying up bonds of struggling countries and companies and seizing on positive news. Today, the news that Germany is open to Spain’s seeking a precautionary credit line on top of a bank bailout from the Eureopean rescue fund pushed stocks higher.

Citigroup’s promotion of longtime employee Michael Corbat to CEO contrasts with its choice five years ago of Vikram Pandit, who came from Morgan Stanley. It suggests that the firm is attempting to turn back toward its more staid roots in commercial banking and away from its flashy Wall Street trading business.

This is a shocker. Vikram Pandit has stepped down as CEO of Citigroup. He’s being replaced by Michael Corbat, the company’s CEO of Europe, Middle East and Africa. COO John Havens is also stepping down. Citigroup shares are up 1% after initially falling in pre-market trading.

During a conference call on earnings this morning Citigroup CEO Vikram Pandit came back to one consistent vein: the bank is placing a great deal of faith in emerging markets, and notably in Latin America. Despite gains in housing and recent upward momentum in financial markets, Pandit stressed that growth is still much stronger in emerging markets than in developed ones.

Ratings agency Standard & Poor’s chopped Spain’s credit rating on Oct. 10. Moody’s has been expected to downgrade the country for a while—in its case, to speculative-grade or “junk” status. This wouldn’t exactly surprise investors, since Spain has been in a perpetual state of almost asking for a bailout for the last few months. A downgrade would be nasty for Spain, which would likely face higher borrowing costs and need to offer more collateral in order to borrow.

Rare is the Greek company that has not been deeply impacted by the country’s economic crisis. Slowly but surely, highly diversified firms’ ratings have been ratcheted down simply because they are headquartered in Greece and listed on Greek exchanges, making the cost of funding their operations prohibitively expensive. This week, bottling company Coca-Cola Hellenic (CCH) and Greek yogurt maker FAGE each decided to pack up their headquarters and relocate outside Greece.

JPMorgan Chase CEO Jamie Dimon told investors in a conference call today that the bank had downgraded its estimate of how much money it could lose on the portfolio created by the so-called “London Whale”—a bad bet that flouted the bank’s risk-management policies and cost it billions.

JPMorgan Chase & Co. reported earnings of $1.40 per share and revenues of $25.8 billion in the third quarter, beating analysts expectations. The company’s profits rose 34%. CEO Jamie Dimon credits some of the bank’s successes to the US housing market, which he says “has turned the corner.”

Up to now UK prime minister David Cameron had been a fan of European Council president Herman van Rompuy’s plan to introduce a centralized budget for the euro-zone countries, but now the two are exchanging jabs.

US consumers have long-complained about petrol prices at the pump, and evidence suggests that wallet worries are driving consumers towards more fuel-efficient cars. But you might not realize how dramatic the change in attitudes has been—enough to make a big impact on aluminum producer Alcoa’s plans.