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By Yimou Lee and Sarah Wu TAIPEI (Reuters) -China deployed scores of planes and fired live missiles near Taiwan on Thursday in its biggest drills in the Taiwan Strait, a day after U.S. House of Representatives Speaker Nancy Pelosi made a solidarity trip to the self-ruled island. China's military confirmed multiple firings of conventional missiles in waters off Taiwan as part of planned exercises in six zones set to run until noon on Sunday. It activated more than 100 planes, including fighter jets and bombers, and over 10 warships, state broadcaster CCTV said. Taiwan's defence ministry said it scrambled jets to warn away 22 Chinese fighter aircraft that crossed the Taiwan Strait median line into its air defence zone, and said troops fired flares late on Thursday to drive away four drones that flew above the area of its Kinmen islands, off the southeastern coast of China. It said missiles fired by China flew high into the atmosphere and constituted no threat to it, responding to public concern about whether they passed over the main island of Taiwan. Japan protested that five missiles appeared to land in its economic zone. "The U.S.-Taiwan collusion and provocation will only push Taiwan towards the abyss of disaster, bringing catastrophe to Taiwan compatriots," said a Chinese defence ministry spokesperson. Responding to the Chinese drills, President Tsai Ing-wen said Taiwan would not provoke conflicts but would firmly defend its sovereignty and national security. "Taiwan will never be knocked down by challenges," Tsai said in a recorded video message to the people of Taiwan. "We are calm and not impetuous, we are rational and not provocative, but we will also be firm and not shirk." The White House condemned China's move as "irresponsible" and said it expected Beijing would continue to react in the coming days. "Beijing's provocative actions are significant escalation and its long standing attempt to change the status quo," U.S. national security spokesperson John Kirby (NYSE:KEX) told a briefing. To avoid escalating tensions further, the United States has postponed a long-planned test of an Air Force Minuteman III intercontinental ballistic missile, Kirby said. HACKER ATTACKS Taiwan said 11 Chinese Dongfeng ballistic missiles had been fired in nearby waters - the first time since 1996. Taiwan officials said the drills violated United Nations rules, invaded its space and threatened free air and sea navigation. It has been self-ruled since 1949, when Mao Zedong's communists took power in Beijing after defeating Chiang Kai-shek’s Kuomintang (KMT) nationalists in a civil war, prompting the KMT-led government to retreat to the island. The military activity followed Pelosi's unannounced visit of support to Taiwan in defiance of warnings from China. Before the drills officially began, Chinese navy ships and military aircraft briefly crossed the Taiwan Strait median line several times on Thursday, a Taiwanese source briefed on the matter told Reuters. By midday, warships from both sides remained in close proximity as Taiwan also scrambled jets and deployed missile systems to track Chinese aircraft crossing the line. "They flew in and then flew out, again and again. They continue to harass us," the Taiwanese source said. China, which has long said it reserves the right to take Taiwan by force, says its differences with the island are an internal affair. In Taiwan, life was largely normal despite worries that Beijing could fire a missile over the main island as North Korea did over Japan's northern island of Hokkaido in 2017. "When China says it wants to annex Taiwan by force, they have actually said that for quite a while," said Chen Ming-cheng, a 38-year-old realtor. "From my personal understanding, they are trying to deflect public anger, the anger of their own people, and turn it onto Taiwan." Taiwan said websites of its defence ministry, foreign ministry and the presidential office were attacked by hackers and warned of coming "psychological warfare". 'COMRADE PELOSI' Chinese Foreign Minister Wang Yi called Pelosi's visit to Taiwan a "manic, irresponsible and highly irrational" act, state broadcaster CCTV reported. Wang, speaking at a meeting of Southeast Asian foreign ministers in Cambodia, said China had tried to avert crisis by diplomatic means but would never let its core interests be hurt. Unusually, the drills in six areas around Taiwan were announced with a locator map circulated by China's official Xinhua news agency - a factor that for some analysts illustrated playing to both domestic and foreign audiences. In Beijing, security near the U.S. Embassy was unusually tight though there were no signs of significant protests. "I think this (Pelosi's visit) is a good thing," said a man surnamed Zhao in Beijing. "It gives us an opportunity to surround Taiwan, then to use this opportunity to take Taiwan by force. I think we should thank Comrade Pelosi." Pelosi, the highest-level U.S. visitor to Taiwan in 25 years, praised its democracy and pledged American solidarity during her brief stopover. Chinese anger could not stop world leaders from travelling there, she said. "Our delegation came to Taiwan to make unequivocally clear that we will not abandon Taiwan," Pelosi told Taiwan's President Tsai Ing-wen, whom Beijing suspects of pushing for formal independence - a red line for China. China summoned the U.S. ambassador in Beijing in protest and halted several agricultural imports from Taiwan. The United States and the foreign ministers of the Group of Seven nations warned China against using Pelosi's visit as a pretext for military action against Taiwan. The United States has no official diplomatic relations with Taiwan but is bound by U.S. law to provide it with the means to defend itself. Taiwan rejects China's sovereignty claims, saying only the islanders themselves can decide their future. U.N. Secretary General Antonio Guterres is following the developments closely and with concern, a U.N. spokesperson said.

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Monday, November 1, 2021 Futures Up/Down % Last Dow 159.00 0.45% 35,863 S&P 500 20.25 0.44% 4,617 Nasdaq 65.50 0.41% 15,904 Another day, another record for U.S. averages with the S&P, Dow and Nasdaq looking to add to October gains and kick off the new trading month off strong. Materials and some consumer products are getting a boost after the U.S. and European Union reached a trade truce on steel and aluminum tariffs over the weekend. The two sides were working hard to reach a deal before Dec. 1, when the European retaliatory tariffs were set to double; the 25% tariffs will apply to EU exports beyond 3.3 million tons, Bloomberg reported. The EU agreed to drop retaliatory tariffs on U.S. motorcycles, jeans and bourbon whiskey per Bloomberg (shares of names like HOG looking higher). Earnings optimism also continues to offset concern over a near-term move on tapering from the Federal Reserve that could add to signals of slowing growth in the supply chain-snarled economy, ahead of the FOMC meeting later this week. In Asian markets, The Nikkei Index rose 2.6% or over 750 points to 29,647, the Shanghai Index slipped a few points to 3,544 and the Hang Seng Index dropped -0.88% or over 200 points to 25,154. In Europe, the German DAX is up about 135 points to 15,825, while the FTSE 100 gains +0.5% to 7,275. After posting the worst monthly returns since March 2020 in September, it was a rip fest in October as the S&P 500 500 gains 6.9%, the Dow Jones Industrial Average climbs 5.8%, the Nasdaq Composite adds 7.3% and the Russell 2000 jumps 4.2%. The S&P 500, Dow register 4-straight weeks of gains for the first time since mid-April, Nasdaq notches first 4-week advance since June. As for last week, the S&P 500 gains 1.33%, the Dow rose 0.4% and Nasdaq added 2.71%. overall Friday, the U.S. stock market set another round of record highs as Wall Street looked past disappointing results from major companies Apple and Amazon to wrap up its best month of the year. Market Closing Prices Yesterday The S&P 500 Index gained 8.96 points, or 0.19%, to 4,605.38 The Dow Jones Industrial Average rose 89.06 points, or 0.25%, to 35,819.56 The Nasdaq Composite climbed 50.29 points, or 0.33%, to 15,498.39 The Russell 2000 Index slipped -0.79 points, or 0.03% to 2,297.19 Events Calendar for Today 10:00 AM ET Construction Spending for September 10:00 AM ET ISM Manufacturing PMI for October Earnings Calendar: Earnings Before the Open: AMG, BEN, CNA, ENBL, IVAC, JELD, L, OIS, ON, PCG, SXC, TKR Earnings After the Close: ADC, ADTN, ADUS, ANET, APEN, BNL, BRKR, BRX, BWXT, CACC, CAR, CHGG, CLX, CRUS, CSWC, CURO, EPRT, EVER, FANG, GXO, HLIT, HOLX, IPI, KFRC, KMT, LEG, LXU, MCK, MOS, NBIX, NSP, O, OTTR, PLOW, PSA, RHP, RIG, RMBS, SBAC, SKT, SOI, SPG, TA, TTI, UAN, UNVR, VNO, VNOM, VRNS, WMB, ZI Macro Up/Down Last Nymex 0.50 84.07 Brent 0.83 84.55 Gold 4.40 1,790.30 EUR/USD -0.0009 1.1570 JPY/USD 0.18 114.17 10-Year Note +0.023 1.579% World News China’s official manufacturing purchasing managers’ index fell to 49.2, the National Bureau of Statistics said Sunday, the second month it was below the key 50-mark that is between expansion and contraction The U.K. and France have agreed to de-escalate their spat over Brexit and fishing rights following a meeting between French President Emmanuel Macron and British Prime Minister Boris Johnson on the sidelines of the Group of 20 summit of leaders in Rome Sector News Breakdown Consumer Barron’s took a deep dive into the roads automakers and their suppliers are taking to build a better battery. Raw materials have gotten an upgrade to shorten the supply chain and boost performance. Tesla ($TSLA) has switched to nickel as a substitute for scarcer cobalt, while General Motors ($GM) has sought out alternatives to graphite since its mostly mined in China, Barron’s said. Companies that benefit from revamped supply chains will be the best investment, Albemarle ($ALB), for instance, supplies about one-third of the world’s lithium. Battery capacity will need to jump fourfold by the next few years, according to Barron’s NVR Corp. ($NVR) mentioned positively in Barron’s noting the stock has been flat in recent months and KeyBanc’s analyst said he saw diminished earnings momentum but still kept a $5,450 price target on the stock, an 11% premium over Friday’s close, and for the first time this year, a company insider recently made an open-market buy Bally’s Corporation ($BALY) submitted a proposal to Chicago to develop and operate the $1.6 billion Bally’s Chicago, an entertainment destination resort. Li Auto ($LI) has delivered 7,649 Li ONEs, up 107.2% year over year; as of October 31, 2021, the year-to-date and cumulative deliveries of Li ONEs reached 62,919 and 96,516 respectively. Nio ($NIO) said it delivered 3,667 vehicles in October 2021, representing a decrease of 27.5% year-over-year. XPeng ($XPEV) said monthly deliveries in October 2021 of 10,138 Smart EVs, representing an increase of 233% Y/Y and a 2.6% decline over last month Wynn Resorts ($WYNN), Melco Gaming (MLCO): Macau’s gaming bureau reported October gross revenue from games of fortune in the region decreased 40% year-over-year to 4.365B patacas. Stanley Black & Decker ($SWK) downgraded to Underperform from Neutral at Bank America Energy, Industrials and Materials The U.S. and the European Union have announced a deal at the G20 summit in Rome to ease U.S. tariffs on steel and aluminum totaling more than $10B of E.U. exports each year, removing one of the most significant trade disputes from the Trump administration’s levies imposed in 2018 Deere ($DE) said it reached a tentative agreement with the United Auto Workers (UAW) two weeks after more than 10K workers at 14 plants went on strike. The deal, reached after 90% of union members rejected the first tentative agreement, “contains enhanced economic gains and continues to provide the highest quality healthcare benefits in the industry,” the UAW said. China’s Ganfeng Lithium Co Ltd and its unit GFL International Co Ltd have signed a contract to supply battery-grade lithium products to U.S. electric vehicle (EV) maker Tesla Inc ($TSLA) Financials Barclays PLC ($BCS) CEO Jess Staley was asked to step down Monday following an investigation by U.K. regulators into his relationship with convicted sex offender and financier Jeffrey Epstein. Britain’s Financial Conduct Authority said Staley, 64, told regulators and the bank that his relationship with Epstein ended in 2015. CNA Financial ($CNA) Q3 core EPS 87c vs. est. 60c; posted record underlying combined ratio of 91.1%, double-digit gross written premium growth across all of our P&C business segments and excellent new business growth of 24% Healthcare Moderna ($MRNA) announced that the FDA informed it on Friday that the agency required additional time to review the company’s Emergency Use Authorization (EUA) request for COVID-19 vaccine for use in those aged 12 – 17 years. Regulators told Moderna that the analysis may not be completed until January Novavax ($NVAX) files for covid-19 vaccine authorization with health Canada and completes submission for rolling review to European medicines agency Tilray ($TLRY) downgraded to Neutral from Overweight at Cantor Fitzgerald and cut tgt to $11.80 from $18.00 LianBio ($LIAN)3M share IPO priced at $16.00 Technology, Media & Telecom Madison Square Garden Sports ($MSGS) MSG Entertainment $(MSGE) and AMC Networks ($AMCX) are at inexpensive prices according to Barron’s. Online sports gambling, due to start in New York in the next few months, looks like a big plus for both MSG Sports and MSG Entertainment because of advertising, fan engagement, and a potential sports book in Madison Square Garden Pearson Plc ($PSO) may see increased pressure from Europe’s largest activist pressure as the company works to convince holders about a turnaround under CEO Andy Bird, according to a Telegraph report. Activist Cevian Capital now owns 8.5% of Pearson and is the company’s second largest investor, the Telegraph reported. https://bit.ly/3muoDGw Cinemark Holdings Inc. ($CNK) and IMAX Corp. (IMAX) time to shine said Barron’s noting IMAX had its best October on record thanks to “Dune” and other films. Meanwhile, “Cinemark’s 3Q results should show further signs of improvement as the business steadily builds momentum,” writes MKM analyst Eric Handler. AMC Entertainment ($AMC) claimed that the domestic industry box office for October 2021 is estimated to come in considerably higher than that of any previous month since February of 2020. TripAdvisor ($TRIP) downgraded to Underweight from Overweight at Barclays and cut tgt to $30 from $49

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