[BRIEFING.COM] S&P futures vs fair value: -12.30. Nasdaq futures vs fair value: -59.00.
U.S. futures are lower this morning as investors digest the Federal Reserve's policy statement and another round of weak Chinese economic data. The S&P 500 futures are currently trading 12 points, or 0.4%, below fair value.
The Fed indicated the need for further rate hikes should the economy remain robust and notably omitted October's sell-off and U.S.-China trade developments in its November statement, which was released yesterday. In China, the October Consumer Price Index increased just 0.2%, compared to last month's 0.7% increase. The confidence in the U.S. central bank's statement coupled with weak Chinese inflationary data has caused some risk-off positioning this morning.
In earnings, Dow component Walt Disney (DIS 118.97, +2.97) is trading 2.6% higher in pre-market hours after it reported above-consensus top and bottom lines.
In other markets, U.S. Treasuries have ticked higher, pushing yields lower across the curve. The Fed-sensitive 2-yr yield and benchmark 10-yr yield are down two basis points each to 2.95% and 3.21%, respectively. Also, the U.S. Dollar Index extends its recent climb, up 0.1% to 96.82, and WTI crude keeps tumbling, as it drops 1.3% to $59.88/bbl.
Separately, investors will receive the Producer Price Index for October (Briefing.com consensus +0.2%) at 8:30 AM ET, the preliminary reading of the University of Michigan Consumer Sentiment Index for November (Briefing.com consensus 98.0) at 10:00 AM ET, and the Wholesale Inventories report for September (Briefing.com consensus +0.3%) also at 10:00 AM ET.
In U.S. Corporate news:
- Walt Disney (DIS 118.97, +2.97): +2.6% after it beat both top and bottom line estimates.
- General Electric (GE 8.81, -0.29): -3.3% after JPMorgan cut its price target to $6 from $10.
- CenturyLink (CTL 19.90, -1.18): -5.6% after it reported below-consensus top and bottom lines.
- Activision Blizzard (ATVI 56.51-6.28): -10.0% after the video game company guided Q4 profit and revenue below consensus.
- Dropbox (DBX 26.60, +1.86): +7.5% after the company beat earnings estimates and guided Q4 revenue above consensus.
Reviewing overnight developments:
- Equity indices in the Asia-Pacific region ended the week on a lower note. Japan's Nikkei -1.1%, Hong Kong's Hang Seng -2.4%, China's Shanghai Composite -1.4%, India's Sensex -0.2%.
- In economic data:
- China's October CPI +0.2% month-over-month, as expected (last 0.7%); +2.5% year-over-year, as expected (last 2.5%). October PPI +3.3% year-over-year, as expected (last 3.6%)
- Japan's M2 Money Stock +2.7% year-over-year (expected 2.8%; last 2.8%)
- Australia's September Home Loans -1.0% month-over-month (expected -0.9%; last -2.2%) and September Invest Housing Finance -2.8% month-over-month (last -1.1%)
- India's weekly FX Reserves $393.13 billion (last $392.08 billion)
- In news:
- China's Foreign Minister Wang Yi said that a meeting between China's President Xi and U.S. President Trump at the G-20 summit will be of "great significance for both sides."
- The Reserve Bank of Australia released its quarterly statement on monetary policy, which noted that higher rates will likely be appropriate at some point, but there is no present case for a rate increase.
- Major European indices trade in the red with Italy's MIB (-1.4%) displaying relative weakness. Germany's DAX -0.6%, UK's FTSE -0.8%, France's CAC trades -1.0%.
- In economic data:
- UK's flash Q3 GDP +0.6% quarter-over-quarter, as expected (last 0.4%); +1.5% year-over-year, as expected (last 1.2%). Q3 Business Investment -1.2% quarter-over-quarter (expected 0.2%; last -0.7%); -1.9% year-over-year (last -0.2%). September Construction Output +1.7% month-over-month (expected 0.2%; last -0.3%); +3.0% year-over-year (expected 1.1%; last 0.5%). September Industrial Production 0.0% month-over-month (expected -0.1%; last 0.2%); 0.0% year-over-year (expected 0.4%; last 1.0%). September Manufacturing Production +0.2% month-over-month (expected 0.1%; last -0.1%); +0.5% year-over-year (expected 0.4%; last 1.3%). September trade deficit GBP9.73 billion (expected deficit of GBP11.40 billion; last deficit of GBP11.72 billion)
- France's September Industrial Production -1.8% month-over-month (expected -0.3%; last 0.2%)
- In news:
- The Brexit saga took another twist as Northern Ireland's DUP pushed back against British Prime Minister Theresa May's plan for a hard border between Northern Ireland and the Republic of Ireland if a free trade deal is not reached in time.
- Italy's Finance Minister Giovanni Tria said that the 2019 budget will increase Italy's GDP by 0.6%, adding that a slowdown in growth calls for an expansionary budget.