The boss is gone, but the problems at Volkswagen are not going away anytime soon. The automaker is facing billions of dollars in fines, millions in recalls, broken consumer trust and more executives that are likely to follow Martin Winterkorn out the door. Volkswagen (OTCQX:VLKAY) has not named a CEO successor, but proposals on management appointments (as well as those responsible for the scandal) will be announced at a board meeting on Friday. Top candidates for the new head role: Porsche (OTCPK:POAHY) chief Matthias Mueller, Audi (OTCPK:AUDVF) chief Rupert Stadler and the head of the VW brand, Herbert Diess.

Economy

Fed Chair Janet Yellen is scheduled to speak this evening on "inflation dynamics and monetary policy" at the University of Massachusetts. Traders are particularly eyeing her comments on inflation, after the Fed held off on a rate hike last Thursday and stirred up new fears about deflation. Besides Yellen's speech, there are a few key pieces of data which will be released today, including jobless claims, durable goods and new home sales.

Japan's Nikkei slipped 2.8% in its first trading session this week following three national holidays, edging near a seven-month low touched earlier this year. The fall follows a bruising selloff in China and the U.S. on Wednesday, which took a cue from weak factory performance and a downbeat global environment. Meanwhile, the yen has been stuck in a narrow trading range over the past week and last stood little changed at 119.85 to the dollar.

The euro is clinging to broad gains after the head of the European Central Bank downplayed the need for further monetary stimulus anytime soon. ECB President Mario Draghi said while the risks to Europe's inflation and growth outlook have increased due to an emerging market slowdown, the bank would need more time to decide if the loss was "temporary or permanent in nature." The euro last traded at $1.1207, pulling away from Wednesday's session low of $1.1105.

Brazil's central bank intervened to try to calm the country's volatile forex market yesterday, using currency-swap contracts and auctions of dollar-repurchase agreements to prop up the real. Over the past year, the currency has lost about 70% of its value against the dollar due to a struggling economy and corruption scandal at Petrobras (NYSE:PBR) that may see the state intervene with a bailout. Brazil's sovereign credit rating was also dinged earlier this month after Standard & Poor's downgraded it to junk status.

German business morale unexpectedly improved in September, despite a weakening growth outlook for China and other large developing economies. Ifo's business climate index rose to 108.5 this month from an upwardly revised 108.4 in August. The reading was the strongest since May, suggesting company executives in Europe's largest economy remain upbeat despite the increase in global concerns.

Stocks

Volkswagen's diesel emissions scandal may threaten the future of diesel-powered vehicles, along with their clean air and fuel economy reputation, many analysts are warning. Although diesel cars are fairly rare in the U.S., they are mainstream in Europe, with cheap fuel as the major selling point. In 2014, diesel motors powered 40% of passenger cars on the road in Europe, and diesel cars comprised 53% of all new auto sales in the region. Related tickers: FCAU, EUGF, OTCPK:DDAIF, OTC:RNSDF, OTCPK:CTTAY, OTCPK:VLEEF

Are BMW's emission tests tainted too? A report this morning in Auto Bild suggests BMW's (OTCPK:BAMXY) X3 exceeds ICCT nitrogen oxide levels by more than 11x. On the other hand, ICCT CEO Peter Mock told Der Spiegel yesterday that BMW's X5 achieved "good results." Additional elements of the saga are sure to surface in the next few weeks.

More partnerships between Chinese and U.S. technology firms are being announced during Chinese President Xi Jinping's visit to the United States. Cisco (NASDAQ:CSCO) is forming a joint-venture with server maker Inspur to sell networking and cloud computing products in China, where the company faces political pressure and declining sales. Microsoft (NASDAQ:MSFT) is partnering with Baidu (NASDAQ:BIDU) and Tsinghua Unigroup to sell cloud services to Chinese state-owned enterprises and also struck a deal with China Electronics Technology Group to explore ways to deploy a "localized" version of Windows 10.

Other China news: Boeing (NYSE:BA) has agreed to sell 300 narrowbody and widebody aircraft to Beijing (list prices valued at $38B) and plans to open a facility in the country that would finish work on its 737 jetliners. The announcements, which coincided with President Xi's visit to a Boeing plant near Seattle, prompted a backlash from unions and lawmakers concerned about more work getting sent overseas.

Traders following the moves of bond king Bill Gross would likely be surprised to see the results marking the first anniversary of his dramatic career move. Investors who put money into his new Unconstrained Bond Fund (MUTF:JUCAX) at Janus Capital (NYSE:JNS) are sitting on a 2.5% loss, while those who stayed in Pimco's (OTCQX:AZSEY) Total Return fund (NYSEARCA:BOND) are up 1.7%. The diverging performances could explain another surprise: Although the outflows from Total Return were indeed huge - $120B and counting - barely $1B flowed into Gross's new fund at Janus.

Nokia has secured French approval for its €15.6B merger with Alcatel-Lucent (NYSE:ALU), after confirming that France will play a leading role in the combined entity's R&D operations. Progress with approvals is "remarkable," Nokia (NYSE:NOK) CEO Rajeev Suri declared. The remaining key approval is to come from China, where the company already smoothed the road through a China Huaxin joint venture.

Facebook has introduced a 360-degree "spherical" video feature in its newsfeed, allowing users to drag a cursor or tilt their devices to replicate an immersive panoramic view as the video plays. The move takes Facebook (NASDAQ:FB) closer to the virtual reality experience, and may be the first step toward integrating content with the Oculus Rift headset (scheduled to be released next year).

Ahead of a U.S. launch next week, Samsung Electronics (OTC:SSNLF) said its new mobile payment service has processed more than $30M worth of transactions in South Korea, although it has only been available in the country for barely a month. Samsung Pay is seen as advantageous to rivals Apple Pay and Android Pay, as its magnetic secure transmission (MST) technology is also designed to work with magnetic card readers that haven't yet adopted near-field communication (NFC).

Total's market trades in the U.S. are under investigation by the CFTC, and the company is in talks to settle the matter "for a few million dollars," but maintains "there was no wrongdoing." News of the probe comes a day after another U.S. agency, the FERC, accused a Total (NYSE:TOT) subsidiary of initiating money-losing gas purchases intended to make profits on other trading positions. The investigations follow a new round of cost cuts and reductions in capital spending at the French oil company.

Wal-Mart is looking for price cuts from suppliers that produce goods in China, saying the retailer should share in the savings generated by the country's recent devaluation of the yuan. Company managers in recent weeks have contacted more than 10K suppliers seeking cost cuts of 2-6% on general merchandise, so it can achieve "everyday low cost" - Wal-Mart's (NYSE:WMT) term for the tight cost controls needed to keep prices low for consumers.

Today's Markets

In Asia, Japan -2.8% to 17571. Hong Kong -1% to 21096. China +0.9% to 3143. India +0.2% to 25864.
In Europe, at midday, London -0.4%. Paris -0.8%. Frankfurt -1.5%.
Futures at 6:20, Dow -0.5%. S&P -0.5%. Nasdaq -0.6%. Crude +1% to $44.92. Gold +0.2% to $1134.20.
Ten-year Treasury Yield -1 bps to 2.13%

Today's Economic Calendar

8:30 Durable Goods
8:30 Chicago Fed National Activity Index
8:30 Initial Jobless Claims
9:45 Bloomberg Consumer Comfort Index
10:00 New Home Sales
10:30 EIA Natural Gas Inventory
11:00 Kansas City Fed Mfg Survey
1:00 PM Results of $29B, 7-Year Note Auction
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
5:00 PM Janet Yellen speech