Stocks look ready to pull back slightly this morning after kicking off the week with gains on Monday -- which were achieved following news that Canada has joined the United States and Mexico in a trade agreement. The S&P 500 futures are trading four points, or 0.1%, below fair value. The tech-heavy Nasdaq 100 futures are down 0.3%.
Concerns over Italy have resurfaced this morning after the country's anti-establishment government on Friday widened the country's budget-deficit target for next year to 2.4% of GDP, irking EU officials. The government dug in its heels over the issue today, with Deputy Prime Minister Luigi Di Maio saying that the government will "not retreat even a millimeter" from its 2.4% target.
European equities are broadly lower, and the euro is down 0.4% against the U.S. dollar. The yield on the Italian 10-yr bond has spiked six basis points to 3.36%.
Back in the U.S., PepsiCo (PEP) is down 1.5% in pre-market trading after the soft drink giant reported above-consensus earnings this morning, but lowered its profit guidance for the fiscal year. Meanwhile, General Electric (GE) is up again this morning, adding 2.3%, after jumping 7.1% on Monday in reaction to the ousting of CEO John Flannery, who served at the helm of GE for just over a year. GE's stock was upgraded this morning to 'Outperform' from 'Peer Perform' at Wolfe Research and to 'Outperform' from 'Sector Perform' at RBC Capital Markets.
Looking at other markets, West Texas Intermediate crude futures are up 0.2% at $75.42/bbl, extending yesterday's four-year high, as investors continue to buy ahead of upcoming U.S. sanctions on Iran's energy industry, which will come into force on November 4. Meanwhile, U.S. Treasuries are slightly higher, pushing the benchmark 10-yr yield one basis point lower to 3.07%.
There are no notable economic reports this morning, but investors will receive September auto and truck sales throughout the day.