Stock Market Update

The S&P 500 futures are down four points and are trading 0.1% below fair value, the Nasdaq 100 futures are up nine points and are trading 0.1% above fair value, and the Dow Jones Industrial Average futures are down 100 points and are trading 0.3% below fair value.

Early action is mixed after the S&P 500 closed a strong third quarter at record highs. Contracts tied to the S&P 500 and Dow industrials are lower and Nasdaq 100 futures are higher. Investors are waiting on economic data this week that will influence the market's thinking on the Fed's rate cut path. 

Today's economic lineup includes the September ISM Manufacturing Index at 10:00 ET, Thursday's calendar includes weekly jobless claims and the September ISM Non-Manufacturing Index, and the September Employment Situation report will be released on Friday.

Treasury yields are lower in front of the data. The 10-yr yield is down six basis points to 3.74% and the 2-yr yield is down three basis points to 3.62%.

In other news, members of the International Longshoremen’s Association in East and Gulf coast ports went on strike, which is another contributing factor impacting today's mixed disposition.

In corporate news:

• CVS (CVS 64.20, +1.32, +2.1%): mulling options including breakup, according to WSJ
• Boeing (BA 150.84, -1.20, -0.8%): mulling $10 bln stock offering, according to Bloomberg
• PepsiCo (PEP 170.15, +0.10, +0.1%): down slightly as it nears a deal for Siete Foods for over $1.0 bln, according to WSJ
• Pfizer (PFE 28.94, 0.0, +0.0%): aiming to sell $3.26 bln stake in Haleon (HLN), according to Reuters
• KB Home (KBH 84.55, -1.14, -1.3%): CFO Jeff J. Kaminski to retire in early 2025; company is following succession planning process to identify next CFO
• Verizon (VZ 44.85, -0.06, -0.1%): says "Verizon engineers have fully restored today's network disruption that impacted some customers. Service has returned to normal levels."

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region began the month on a mostly closed note as markets in South Korea, Hong Kong, and China were closed for holidays with China remaining closed until next week. Japan's Nikkei: +1.9%, Hong Kong's Hang Seng: HOLIDAY, China's Shanghai Composite: HOLIDAY, India's Sensex: UNCH, South Korea's Kospi: HOLIDAY, Australia's ASX All Ordinaries: -0.7%.
  • In economic data:
    • Japan's September Manufacturing PMI 49.7 (expected 49.6; last 49.8). August jobs/applications ratio 1.23 (expected 1.24; last 1.24) and August Unemployment Rate 2.5% (expected 2.6%; last 2.7%). Q3 Tankan All Big Industry Capex 10.6% (expected 11.9%; last 11.1%)
    • South Korea's September trade surplus $6.66 bln (last surplus of $3.77 bln). September Imports 2.2% yr/yr (last 6.0%) and Exports 7.5% yr/yr (last 11.2%)
    • India's September Manufacturing PMI 56.5 (expected 56.7; last 57.5)
    • Singapore's Q3 URA Property Index -1.1% qtr/qtr (last 0.9%)
    • Australia's August Building Approvals -6.1% m/m (expected -4.3%; last 11.0%); 7.9% yr/yr (last 25.2%). Private House Approvals 0.5% (last 0.9%). August Retail Sales 0.7% m/m (expected 0.4%; last 0.1%). September Commodity Prices -10.1% yr/yr (last -6.0%)
    • New Zealand's August Building Consents -5.3% m/m (last 26.4%). Q3 Business Confidence -1% (last -44%)
  • In news:
    • Japan's Nikkei (+1.9%) recovered some of Monday's loss while the latest summary of opinions from the Bank of Japan was underscored by a more anxious tone among policymakers.
    • Japan's Manufacturing PMI (49.7) remained in contraction in the final reading for September.
    • The Reserve Bank of New Zealand will meet next week and expectations for a 50-bps rate cut are growing.
• Major European indices trade on a mostly higher note. STOXX Europe 600: +0.4%, Germany's DAX: +0.4%, U.K.'s FTSE 100: +0.5%, France's CAC 40: UNCH, Italy's FTSE MIB: +0.1%, Spain's IBEX 35: -0.4%.
  • In economic data:
    • Eurozone's September Manufacturing PMI 45.0 (expected 44.8; last 45.8). September CPI -0.1% m/m (last 0.1%); 1.8% yr/yr, as expected (last 2.2%). September Core CPI 0.1% m/m (last 0.3%); 2.7% yr/yr, as expected (last 2.8%)
    • Germany's September Manufacturing PMI 40.6 (expected 40.3; last 42.4)
    • U.K.'s September Manufacturing PMI 51.5, as expected (last 52.5)
    • France's September Manufacturing PMI 44.6 (expected 44.0; last 43.9)
    • Italy's September Manufacturing PMI 48.3 (expected 49.0; last 49.4)
    • Spain's September Manufacturing PMI 53.0 (expected 50.2; last 50.5)
    • Swiss August Retail Sales 3.2% yr/yr (expected 2.6%; last 2.9%) and September procer.ch PMI 49.9 (expected 47.9; last 49.0)
  • In news:
    • Final September Manufacturing PMI readings from Germany (40.6), France (44.6), Italy (48.3), and Switzerland (49.9) remained in contraction while Spain (53.0) and the U.K. (51.5) reported ongoing expansion.
    • September CPI for the eurozone decelerated to 1.8% yr/yr from 2.2% in August, slipping below the European Central Bank's 2.0% target.
    • French Prime Minister Barnier is expected to call for tax hikes that will raise up to EUR18 bln of revenue.