Visitors Now:
Total Visits:
Total Stories:
Profile image
By silveristhenew (Reporter)
Contributor profile | More stories
Story Views

Now:
Last Hour:
Last 24 Hours:
Total:

Global Stocks Drop On Poor Earnings, Bond “Bloodbath” Ahead Of US Q3 GDP

Friday, October 28, 2016 5:34
% of readers think this story is Fact. Add your two cents.

(Before It's News)

S&P futures and Asian stocks were little changed while European shares fell as the global bonds sell-off deepened on speculation major central banks are moving closer to reining in stimulus, while stocks retreated after disappointing results from companies including Amazon.com and AB InBev. The dollar hit a three-month high against the yen as investors grew more confident that the Federal Reserve will raise U.S. interest rates by the end of the year.

Benchmark 10-year U.S. and euro zone yields rose to their highest since May and 10-year British yields were firmly on track for their biggest monthly rise since January 2009, the second biggest in over 20 years.  “Bond markets are facing a recurring nightmare at the moment as we continue to see yields rise sharply,” said DB’s Jim Reid. Key overnight data included Japanese CPI, which printed -0.5% as expected; the first print of US Q3 GDP will be revealed at 8:30am ET.

Among the stories, UBS reported a drop in wealth earnings as CEO focuses on cost cuts, Amazon missed on EPS and forecast holiday sales that were below analysts’ estimates sending it shares sharply lower, while AB InBev – one of Europe’s biggest companies – plunged on a profit miss; Novo Nordisk, the world’s biggest maker of insulin, cut its long-term growth target; the WSJ reported that GE was discussing an acquisition of Baker Hughes although the company later denied the rumors saying partnership negotiations don’t include an “outright purchase.”

“The guidance has been a bit disappointing,” said Daniel Murray, head of research at EFG Asset Management in London. “Sentiment has been damaged by the fact that we are in the U.S. election period and the fact that expectations with respect to the ECB are coalescing around the fact that it’s going to be less expansive than it has been this year.”

As a result, a rally in global equities is pulling back in October and bonds worldwide are on course for their worst month since the taper tantrum of 2013 as global central bank tapering fears return while the Fed moves closer to raising interest rates as the economy improves. Quoted by Bloomberg, James Woods, a strategist at Rivkin Securities in Sydney said “there are so many risk events coming up, people just sort of want to get those out of the way before they commit. There’s quite a bit of cash sitting on the sidelines, waiting to be deployed.” He did not explain where the cash those who sell to the “buyers on the sidelines” will end up; one assumes on the sidelines too…

Looking at today’s main event, the advance Q3 GDP release in the US this afternoon, the range of expectations for the data is huge. Indeed the consensus (Bloomberg) is currently sitting at 2.6% for the annualized QoQ print while the range among economists spans 1.3% to 3.6%. DB’s Joe Lavorgna is at the low end of that range with his forecast. A couple of factors lead to that conclusion. Firstly, Joe highlights that inflation-adjusted retail control is pointing towards sub-1% annualized growth of overall real personal consumption expenditures in Q3. This expected slowdown would follow a relatively large 4.3% increase in the previous quarter. The biggest risk in his view however remains inventories. The level of stockpiles is still elevated relative to the pace of sales throughout most of this year and Joe expects another drawdown in inventories for Q3. It’s worth noting that the two GDP tracker models from the Atlanta Fed and NY Fed are at 2.1% and 2.2% respectively.

Back to markets, Asian stocks headed for a weekly drop as Chinese shares retreated and investors weighed mixed earnings reports before central bank meetings and the U.S. election. Japanese equities rallied after the yen fell. European stocks fell for a fifth day as companies reported disappointing results while a bond rout abated and metals rallied.

The Stoxx Europe 600 Index headed for its longest losing streak in six weeks after Anheuser-Busch InBev NV posted a surprise drop in profit and Novo Nordisk A/S, the world’s biggest maker of insulin, cut its long-term growth target. 71% of Stoxx 600 members decline, 27% gain. The index fell 0.5%, taking its weekly loss to 1.2 percent – the biggest slump since mid-September. While most industry groups retreated in the past five days, banks climbed and lost their spot as the year’s biggest losers, thanks to better-than-forecast reports at Spanish firms such as Banco Santander SA and Banco Bilbao Vizcaya Argentaria SA.

The S&P 500 fell for the past three days, its longest losing streak since early September. Futures on the S&P 500 Index were little changed, with the gauge heading for its third weekly decline in four. Contracts on the Nasdaq 100 Index dropped less than 0.1 percent on Friday.

Among companies moving on earnings, courtesy of Bloomberg:

  • AB InBev lost 4.6 percent after cutting its revenue projection.
  • Total SA fell 1.7 percent after posting an earnings decline.
  • Novo Nordisk sank 14 percent after slashing its long-term target for earnings growth by half.
  • Software company Gemalto NV tumbled 12 percent as its revenue missed estimates.
  • Amazon.com Inc. lost 5.4 percent in early New York trading after forecasting holiday sales that may miss projections.
  • Alphabet Inc. added 1.1 percent after reporting revenue and profit that topped projections.
  • Sanofi rallied 7 percent after the drugmaker raised its profit forecast.
  • British Airways owner IAG SA, which reported a decline in quarterly earnings amid a weaker pound, climbed 3.4 percent as its annual profit forecast was in line with analysts’ estimates.

A gauge of dollar strength was near a seven-month high before the U.S. reports gross domestic product. Aluminum rose to a 15-month high after a rally in iron ore prices in China.

German 10-year Bunds were little changed, with yields near the highest in almost six months. The annual consumer-price inflation rate in four German regions, including Saxony and Brandenburg, rose in October, according to reports released before data for the nation is made available later Friday. “The premise of the selloff so far was higher inflation and uncertainty on what the ECB is going to do next and particularly about how the next leg of quantitative easing would look,” said Peter Chatwell, head of rates strategy at Mizuho International Plc in London. “These conditions remain in place, so it’s difficult to envisage markets finding strong support until there is much stronger conviction as to the ECB.” German 10-year bund yields were at 0.16 on Friday, after reaching 0.22 percent, the highest since May 5. The yield has climbed 28 basis points this month.

The yield on 10-year U.S. Treasuries was little changed at 1.85 percent, leaving it up 25 basis points this month.

Fixed-income assets are retreating as fund managers boost cash holdings before the presidential vote Nov. 8 and as monetary policies show signs of turning less accommodative in the U.S., Europe and Japan. The Bank of Japan shifted to targeting bond levels from its goal to push yields lower, while ECB officials have said the authority will probably gradually wind down its bond purchases.

Bonds have lost 2.9 percent in October, according to the Bloomberg Barclays Global Aggregate Index.

Exxon Mobil Corp., Chevron Corp. and Mastercard Inc. are among companies reporting on Friday. U.S. GDP growth quickened in the third quarter, economists in a Bloomberg survey said before a report on Friday.

* * *

Market Snapshot

  • S&P 500 futures down less than 0.1% to 2122
  • Stoxx 600 down 0.6% to 340
  • FTSE 100 down 0.5% to 6954
  • DAX down 0.6% to 10654
  • German 10Yr yield down less than 1bp to 0.17%
  • Italian 10Yr yield up 3bps to 1.56%
  • Spanish 10Yr yield up 3bps to 1.22%
  • S&P GSCI Index down 0.1% to 373.2
  • MSCI Asia Pacific up less than 0.1% to 139
  • Nikkei 225 up 0.6% to 17446
  • Hang Seng down 0.8% to 22955
  • Shanghai Composite down 0.3% to 3104
  • S&P/ASX 200 down 0.2% to 5284
  • US 10-yr yield up less than 1bp to 1.86%
  • Dollar Index down 0.08% to 98.81
  • WTI Crude futures down 0.2% to $49.60
  • Brent Futures down less than 0.1% to $50.44
  • Gold spot down less than 0.1% to $1,268
  • Silver spot down 0.1% to $17.61

Global Headline News

  • German bonds headed for their worst month since 2013 as a global selloff deepened
  • UBS Reports Drop in Wealth Earnings as CEO Focuses on Cost Cuts: Wealth management profit declines 21% in third quarter
  • Amazon Forecasts Holiday Sales That May Miss Analysts’ Estimates: Shares declined as much as 9 percent in extended trading
  • AB InBev Needing Megabrew Tonic as Shares Plunge on Profit Miss: Budweiser maker cuts full-year revenue forecast on slowdown
  • GE Discussing Baker Hughes Partnership as Oil Slump Endures: Negotiations don’t include an ‘outright purchase,’ GE says
  • Chipotle said to hire Goldman, Wachtell to help defend against activist investor Bill Ackman, Reuters reports
  • Marvell is close to hiring Goldman as an adviser after the company replaced its CEO and rejected a series of Chinese bids
  • Samsung Biologics priced its $2b initial public offering at the high end of a marketed range
  • U.S. said to probe Tullett, BGC, TFS-ICAP over currency options
  • Companies in Europe cutting their record amounts of cash they possess, buying short-term securities instead of expanding
  • Bond investors are worried that things are about to get worse for Brazilian banks already battered by delinquencies
  • Brookfield agreed to buy a 70% stake in Brazilian water and sewage company Odebrecht Ambiental for as much as $1b
  • Apple Increases Prices of Macs in U.K. by 20 Percent: Amount charged in the U.S. hasn’t changed over the same period
  • In European primary, higher-yielding borrowers are dominating a busy end to the third-busiest week of the year, with at least EU2.5b expected to price across 7 deals

* * *

Looking at regional markets, we start in Asia where stocks headed for a weekly drop as Chinese shares retreated and investors weighed mixed earnings reports before central bank meetings and the U.S. election. Japanese equities rallied after the yen fell. Relief for the BoJ ahead of their meeting next week with the latest inflation figures not deteriorating further, while the Tokyo CPI (often regarded as a leading indicator for the national reading) which would have taken into account the BoJ’s new yield curve policy, printed firmer than expected. However, as is typically the case, a muted reaction was observed in the JPY, which had been notably weaker following the USD strength throughout EU and US hours. As such, the Nikkei 225 (+0.5%) outperformed to hover around 6-month highs with exporters benefitting from the
weaker currency, coupled with financials gaining from the pick-up in yields. Elsewhere, the ASX 200 (-0.3%) was dragged lower by AMP shares after the company booked a AUD 668m1n impairment charge for their wealth protection unit, while Chinese markets were indecisive with Shanghai Comp (unch) initially underpinned from a larger net weekly liquidity injection and encouraging earnings, before gains were then pared alongside weakness in the Hang Seng (-0.3%) on a disappointing trading debut for China Resources Pharmaceuticals which was one of HK’s largest IPOs this year. In credit markets, JGB yields were higher across the curve taking the impetus from the rally in yields from its global counterparts throughout yesterday’s session. Yields also continued to climb higher post Japanese CPI release, although outperformance had been observed in the belly of the curve after the BoJ offered to purchase 5-10yrs. PBoC injected CNY 95b1n 7-day reverse repos, CNY 65b1n in 14-day reverse repos, CNY 35b1n in 28-day reverse repos for a weekly net injection of CNY 595b1n vs. Prey CNY 95.5bIn injection.

Asia Top News

  • Japan Consumer Prices Keep Falling, Household Spending Slips: Downbeat inflation and spending data came despite an increasingly tight labor market
  • Hong Kong Regulator Said to Call in Brokerages to Settle Probes: SFC plans public consultation on manager responsibility regime
  • Singapore’s Mall Vacancies Jump to Highest Level in a Decade: Office vacancies also climb in quarter to a four- year high
  • Daiwa Profit Climbs 25% on Trading Income; Announces Buyback: 2Q net income 30.4b yen vs 24.4b yen year ago
  • UOB Net Income Beats Estimate as Credit-Card, Fund Income Rises: 3Q net S$791m vs est. $771m
  • Macquarie Group Profit Beats Estimates on Asset Sales: Full- year profit to be in line with last year’s record result
  • Tata Said to Tap Sovereign Funds on Buying Out Ousted Chairman: Indian industrialist prepares for possible Mistry family sale

European equities opened in the red this morning as one of Europe’s biggest companies AB InBev (ABI BB) fell as much as 5.5%. This general negative sentiment led the DAX future to break Wednesdays low of around 10625 and remains lower by around 1 %. In terms of other large caps, RBS (RBS LN) posted a loss but with a higher than Prey. CETI ratio; the Co. opened +4.9% before retracing these gains in line with the downside across the rest of the market. In Germany, Linde (LIN GY) are currently up +2.7% off the back of a stellar earnings report and are the out performer in the DAX.

Top European News

  • RBS Shares Rise as Trading Unit Boosts Third-Quarter Revenue: RBS says it won’t meet deadline for shedding Williams & Glyn
  • Sanofi Overcomes Diabetes Crunch, Surges After Boosting Forecast: Drugmaker to divest EU generics business within 12-24 months
  • BNP Profit Rises, Beating Estimates, Buoyed by Debt Trading: French firm joins other banks benefiting from debt operations
  • Spain’s Economic Growth Slows as Rajoy Gets Closer to Power: Rajoy may take office this week as Socialists drop veto
  • Facebook Told to Stop Exploiting WhatsApp Data During EU Probe: EU privacy chiefs say use isn’t in line with terms of service
  • Eni Posts Wider-Than-Expected Loss as Low Oil Prices Bite: Oil major cites declining profitability in refining, chemicals
  • Novo Plunges After Slashing Long-Term Growth Profit Target: Cut its long-term target for profit growth by half due to pressure on prices in the U.S., its largest market

In FX, the Bloomberg Dollar Spot Index was little changed, heading for a 2.5 percent gain this move, the most since May. The probability of a Fed rate hike this year climbed 5 percentage points this week to 73 percent in the futures market. Sweden’s krona rebounded from the lowest level since 2010 against the euro on Thursday, having slumped after the central bank signaled it’s prepared to extend bond purchases into next year.  The yuan held near a six-year low amid speculation that China’s policy makers are becoming more tolerant of declines as exports slump and the dollar advances. It’s dropped 1.5 percent in October, set for its biggest monthly loss since an August 2015 devaluation. Bitcoin surged 8.4 percent this week to about $684, the biggest increase since June, as yuan declines spurred demand for the cryptocurrency. China accounts for about 90 percent of trading in bitcoins as the digital tender offers its citizens a means to hedge against yuan depreciation amid capital controls.

In commodities, oil was set for the first weekly drop since September as an OPEC committee meets in Vienna on Friday to discuss output quotas for members participating in an agreement to cut production. Saudi Arabia and its Gulf allies are willing to cut 4 percent from their peak production, Reuters reported, citing people familiar with the matter. Iron ore is rallying as coal prices surge, with futures in China heading for the longest run of daily gains since 2013 and contracts in Singapore poised for a third weekly climb. The stronger prices helped to lift shares of producers in Australia, the world’s largest shipper. Aluminum climbed as much as 0.6 percent in London and has gained more than 10 percent since last Friday’s close in Shanghai, its biggest weekly advance. Zinc reached a fresh five-year high and iron ore climbed a seventh day.

Looking at the day ahead, the focus will be on that Q3 GDP report while the final October University of Michigan consumer sentiment reading will also be released. Away from the data, the ECB’s Coeure is scheduled to speak this morning followed by Governing Council member Lane shortly after. Earnings wise today we’ve got just 16 S&P 500 companies due today with the highlights being Exxon Mobil and Chevron. UBS reports in Europe.

US Event Calendar

  • 8:30am: Employment Cost Index, 3Q, est. 0.6% (prior 0.6%)
  • 8:30am: GDP Annualized q/q, 3Q A, est. 2.6% (prior 1.4%)
  • 10:00am: U. of Mich. Sentiment, Oct. F, est. 88.2 (prior 87.9)
  • 1pm: Baker Hughes rig count

DB’s Jim Reid concludes the overnight wrap

The problems with writing the EMR so early in the morning is that invariably I start writing within seconds of my alarm waking me up out of a deep sleep and often from a strange dream that stays firmly in my mind while I’m writing about crucial multi trillion dollar financial markets. This morning I’m particularly impacted as I just woke from a dream where BBC local radio randomly asked me to commentate on the football World Cup final between Republic of Ireland and Croatia. I wasn’t very good but fortunately my alarm woke me up after the final whistle so at least I know the result. The Irish won 6-4 with man of the match being ex-England and Liverpool player John Barnes who as I informed the listeners had just completed a 15 year residency qualification to play for Ireland at the age of 52. If there’s anyone that can interpret this dream then I’d be very pleased to hear from you. I did have cheesecake late at night at a work dinner in Oslo where I’m writing this from. So maybe that’s it.

Bond markets are facing a recurring nightmare of their own at the moment as we continue to see yields rise sharply. Yesterday’s move seemed to be sparked by the move for Gilts after UK Q3 GDP surprised to the upside (+0.5% qoq vs. +0.3% expected) despite the details suggesting a continuation of an increasingly unbalanced growth profile with services accelerating but production and construction struggling. In any case 10y Gilt yields surged a little over +10bps to close at 1.251% and in the process have narrowed the gap to the pre-Brexit level on June 23rd to just 12bps. That gap has been as big as 86bps.

Other European bond markets followed suit. 10y Bund yields were up +8.5bps to 0.168% and the highest yield since May while yields in the periphery were 7-8bps higher too. In fact, 5y Bund yields finished up 4bps at -0.397% and so taking the yield above the ECB’s -0.40% floor in the depo rate for the first time since June and therefore making them eligible for QE purchases again. Meanwhile Treasuries weren’t exempt from the moves. The benchmark 10y yield ended +6bps higher at 1.855% and so finally snapped out of the 1.70-1.80% range that they’d been stuck in for much of the month. That move actually came despite a relatively unimpressive durable and capital goods orders report. More on that later. This morning in Asia most major bond markets have followed the lead. Yields in the antipodeans in particular are up +5bps and generally at the highest levels since May.

Interestingly the bond selloff comes despite Fed rate hike expectations remaining relatively stable. The December probability of 73% was actually unchanged yesterday and means that since the end of last week the probability has only increased 5%. The various headlines and noise around ECB tapering hasn’t really shifted market re-pricing either. Where we are seeing significant shifts however are in inflation expectations. 10y US inflation breakevens are up over 30bps from the lows in June. It’s a similar story in Europe where Eurozone breakeven rates have marched higher this month and are now over 20bps up from the July lows. Stability in commodity markets is certainly helping. Despite all the back and forth of OPEC production cut speculation, Oil has still only traded $2/bbl either side of the $50/bbl mark this month while base metals have also been fairly stable.

It might be another active day in bond markets given the important advance Q3 GDP release in the US this afternoon where the range of expectations for the data is huge. Indeed the consensus (Bloomberg) is currently sitting at 2.6% for the annualized QoQ print while the range among economists spans 1.3% to 3.6%. DB’s Joe Lavorgna is at the low end of that range with his forecast. A couple of factors lead to that conclusion. Firstly, Joe highlights that inflation-adjusted retail control is pointing towards sub-1% annualized growth of overall real personal consumption expenditures in Q3. This expected slowdown would follow a relatively large 4.3% increase in the previous quarter. The biggest risk in his view however remains inventories. The level of stockpiles is still elevated relative to the pace of sales throughout most of this year and Joe expects another drawdown in inventories for Q3. It’s worth noting that the two GDP tracker models from the Atlanta Fed and NY Fed are at 2.1% and 2.2% respectively.

Another potentially important event today is the decision from Northern Ireland’s High Court on the UK’s Brexit process where claimants are arguing that triggering Article 50 without the consent of the devolved authorities is unlawful. It had been thought that the Northern Ireland decision would come after the decision from the parallel review at the London High Court, so there will probably be a lot of eyes on this outcome ahead of a possible decision in London next week.

Switching to the latest in Asia where it’s a bit of a mixed end to the week for markets. Yesterday’s weaker session for the Yen (-0.78%) is helping the Nikkei (+0.53%) to climb while the Shanghai Comp (+0.27%) is also a touch higher. The Hang Seng is little changed while the Kospi (-0.15%) and ASX (-0.36%) have edged lower. Earnings in the region are dictating much of the moves this morning across bourses however. Elsewhere US equity index futures are up following better than expected quarterly earnings from Alphabet after the close which sent shares up 4% in extended trading. Amazon did however disappoint after the close.

There’s also been some important data released in Japan this morning. In terms of consumer prices, headline CPI has remained unchanged in September at -0.5% yoy as expected, while the core was also unchanged at -0.5% yoy and in line with the market. The core-core reading (0.0% yoy vs. +0.1% expected) was softer than expected however after declining two-tenths from August. Meanwhile household spending (-2.1% yoy vs. -2.7% expected) wasn’t as weak as expected and the jobless rate was reported as declining one-tenth to +3.0% (vs. +3.1% expected). That matches the joint lowest reading in 21 years. It’s worth noting that the BoJ meet next week with some suggestion that they may look to revise their inflation outlook.

The moves this morning come after the S&P 500 finished -0.30% last night and in doing so closed lower for the third time in a row for the first time since early September. REITS felt it again given the moves in rates with the sector alone down -2.45%. Telecoms had a better day as did financials. Earnings also played their part with better than expected results for Dow Chemical and Bristol-Myers Squibb offset by declines for UPS and Simon Property following their latest quartiles. In Europe the Stoxx 600 (-0.01%) finished virtually unchanged following a choppy day. Amazingly in the last 5 sessions the index has closed either flat or -0.01% on 3 of them. Directionless. Much like the US however, European Banks (+1.18%) had another good day and have now finished higher in 7 out of the last 8 sessions. The Stoxx 600 Banks index is now at the highest since May 30th. Interestingly, the last time we were there US 10y yields were 1.851%. So the positive correlation between the sector and yields continues.

In terms of the US durable and capital goods orders data yesterday that we highlighted at the top, headline durable goods orders declined slightly in September (-0.1% mom vs. 0.0% expected) although ex-transportation did rise +0.2% mom as expected. The weakness was in core capex orders however which tumbled -1.2% mom last month (vs. -0.1% expected). Core shipments (+0.3% mom) met expectations. In fairness the core capex order decline was offset by the upwardly revised +1.2% mom print for August. Elsewhere, initial jobless claims declined 3k last week to 258k. Pending home sales (+1.5% mom vs. +1.0% expected) rose a little bit more than expected in September while there was no change in the Kansas City Fed’s manufacturing survey index at +6.

There wasn’t really any other data to highlight in Europe aside from the UK GDP print although we did get the latest BoE CBSP holdings data. Total purchases now stand at £1.994bn as of October 26th. This implies net purchases settled in the latest weekly period of £435m which works out at an average of £145m per auction in that week. That is a touch below the £166m since the program started. While it is a little below the run rate it’s still an overall strong start to the programme for the BoE.

Elsewhere yesterday, the ECB’s Nowotny highlighted what most in the market already think in that the ECB will make a decision on whether or not to extend QE in December. He also said that the ECB will examine ‘looking at volumes and then deciding on assets’. The ECB’s Mersch also said that the ECB should ‘largely achieve’ its inflation goal in 2019.

Wrapping up markets yesterday. It was a fairly volatile day for currencies although the standout was the tumble for the Swedish Krona (-1.92%) which plunged to the weakest level since 2010. That came after the Riksbank kept its benchmark repo rate at -0.5% yesterday but dovishly signalled that it’s prepared to extend bond purchases into 2017 and also keep rates negative for longer. The Swedish Krona has now fallen over 7% this year so far with only Sterling weakening more in the G10.

Looking at the day ahead now, this morning and shortly after this goes to print we’ll be kicking off with Q3 GDP data in France before we then get the PPI and CPI reports shortly after for the economy. Germany will also release its October inflation data today while Euro area confidence indicators are also due out this morning. Across the pond this afternoon, as noted earlier the focus will be on that Q3 GDP report while the final October University of Michigan consumer sentiment reading will also be released. Away from the data, the ECB’s Coeure is scheduled to speak this morning followed by Governing Council member Lane shortly after. Earnings wise today we’ve got just 16 S&P 500 companies due today with the highlights being Exxon Mobil and Chevron. UBS reports in Europe.

Before we wrap up there’s a few potentially interesting things to highlight this weekend. Spain’s Parliament is due to hold a second investiture vote in which Mariano Rajoy is expected to be confirmed for a second term. He should also announce his cabinet over the coming days. In Italy PM Renzi is scheduled to address a rally of his Democratic Party as part of his December 4th referendum campaign. Finally Iceland is due to hold a snap election this weekend. The latest polls have suggested that it will be a close call with the Guardian newspaper suggesting that the activist Pirate Party looks on course to either win or finish a close second. Results should be out on Sunday morning.

Report abuse

Comments

Your Comments
Question   Razz  Sad   Evil  Exclaim  Smile  Redface  Biggrin  Surprised  Eek   Confused   Cool  LOL   Mad   Twisted  Rolleyes   Wink  Idea  Arrow  Neutral  Cry   Mr. Green

Top Stories
Recent Stories

Register

Newsletter

Email this story
Email this story

If you really want to ban this commenter, please write down the reason:

If you really want to disable all recommended stories, click on OK button. After that, you will be redirect to your options page.