Risk declines on EU concerns; MF Global failed to imitate GS

Investors scale back on stocks as EU rescue plan implementation remains uncertain
European stocks are down 1.6 percent in today's trading as investors are reducing their risk exposure to stocks as much uncertainty still exists on how the Eurozone will implement last week's agreement on the region's debt crisis. Read our indepth take on the different issues confronting the Eurozone in our weekly commentary released earlier today.

Weighing on European risk sentiment is also the disappointing unemployment rate figures from the Eurozone showing that the unemployment rate was 10.2 in September which was 0.2 percentage points higher than expected and last month's figure was revised up to 10.1 percent from 10.0 percent. Today's unemployment figures highlight the massive risk the Eurozone is taking with tis plan to throw more debt fuel onto the debt fire in Europe as higher economic growth and a lower unemployment rate is absolutely necessary to fight off the tsunami of debt pouring over the continent.

US equity futures are currently down and we expect the session to be dull with less than average trading volume as traders are positioning themselves for the upcoming week of important US economic data.

MF Global: aggressive strategy to imitate GS failed
The large commodity and futures broker, MF Global, headed by the former co-executive of Goldman Sachs Jon Corzine is feeling the ultimate consequence of a failing strategy to imitate Wall Street's leading investment bank Goldman Sachs through an aggressive plan involving proprietary trading. This strategy lead MF Global into a spider web of high yielding peripheral European bonds that eventually has seen their value decline to fractions of their initial worth.
 
Over the weekend the broker has held takeover talks with several competitors and private equity firms but as of early Monday morning nothing concrete has been released yet. What is known though is that MF Global has been suspended from conducting new business with the New York Fed and that it is filing for Chapter 11 bankruptcy. Rumours have it that the most likely buyer of the firm's assets is Interactive Brokers which is eyeing a good deal to grab its retail futures brokerage.

Vestas being 'killed' on profit warning
Earnings releases continue rolling in but the overshadowing event today is the profit warning from the world's largest wind-turbine maker, Vestas Wind Systems, which is out lowering its full-year sales forecast to EUR 6.4 bn. down from a previously EUR 7.0 expected and the EBIT margin is revised down to 4 percent from 7 percent expected. The primary driver is factory delays in Germany, according to management. The shares are currently down 19.8 percent in today's trading.

Earlier Barclays reported 3Q adj. pretax profit of GBP 1.3 bn. in line with estimates of GBP 1.3 bn. driven by improvements in its UK consumer unit. The shares are down around 1 percent in London.