Despite the industrial production and capacity utilization declines (both large red flags regarding the state of the recovery), the Dow is up 40+ pts and the Nasdaq and S&P 500 each currently sport a small gain. One must assume this is the result of a demand for stocks ahead of AAPL's earnings release after the market close today, and also a belief that worsening economic data virtually guarantees Fed action.

The US dollar is up 0.3% this morning from a 10 month low against a basket of currencies after Fed Chairman Bernanke's comments on Friday softened views re: the possible size and implementation of QE2.

Citigroup (C) reported $0.07/share vs. $0.06 expected this morning. Citi was just a bit light on the top line, coming in at $20.7B vs. the $21B consensus expectation. Much of this bottom line beat is attributable to a $1.99B drop in provisions for loan losses.

Industrial production fell 0.2% in September which was the first time IP fell since the 'recession ended'. This seems to confirm the thesis that much of the ramped production over the past year or so was not being absorbed by consumers.

Capacity utilization came in at 74.7% in September, down 0.1% from August. This is also the first decline in utilization since June 2009.

NAHB issues October housing market index at 7 am PST. 14 is expected vs. 13 in September.

"This multicultural approach, saying that we simply live side by side and live happily with each other has failed. Utterly failed," Angela Merkel said regarding Turks and other immigrants living in Germany. It's both unfortunate and frightening to see xenophobia on the rise around the globe.

China's new five-year plan has been issued, but will await final approval early next year. The Chinese economy is forecast to grow 50% in the next five years to $7.5T. A key focus of the Plan will be to shrink the income gap by improving the distribution of the national income in order to drive long term domestic consumer demand for goods and services. "Expanding domestic demand is the guiding long-term strategy of our country's economic and social development," said Zhang Ping, head of the National Development and Reform Commission. Meanwhile a NYT article from this weekend entitled, "Income Inequality: Too Big to Ignore" states, "The share of total income going to the top 1 percent of earners, which stood at 8.9 percent in 1976, rose to 23.5 percent by 2007, but during the same period, the average inflation-adjusted hourly wage declined by more than 7 percent." When will US policy makers and economists address the rising income gap in the U.S.?

AAPL and IBM report after the close.