Stock Market Update

The S&P 500 futures are up two points and are trading fractionally above fair value, the Nasdaq 100 futures are down five points and are trading fractionally below fair value, and the Dow Jones Industrial Average futures are up eight points and are trading fractionally above fair value.

Moves have been limited for contracts linked to the S&P 500, Nasdaq 100, and Dow industrials. Investors are digesting earnings results from Bank of America (BAC) and Goldman Sachs (GS), which have garnered positive responses. Dow component UnitedHealth (UNH) is lower ahead of the open after reporting earnings. 

Oil prices are dropping after reports that Israel will not strike oil or nuclear targets in its retaliation on Iran. WTI crude oil futures are down 4.4% to $70.62/bbl. 

Today's economic lineup features the October NY Fed Empire State Manufacturing index at 8:30 ET.

In corporate news:

• UnitedHealth (UNH 584.50, -20.90, -3.5%): beats by $0.15, beats on revs; guides FY24 EPS in-line
• Boeing (BA 150.01, +1.47, +1.0%): files $25 bln mixed securities shelf offering
• Walgreens Boots Alliance (WBA 9.45, +0.46, +5.1%): beats by $0.03, beats on revs; guides FY25 EPS in-line, revs in-line; Also announces a footprint optimization program targeting approximately 1,200 closures over next three years
• Bank of America (BAC 42.92, +1.01, +2.4%): beats by $0.05, reports revs in-line
• Goldman Sachs (GS 541.88, +19.23, +3.7%): beats by $1.51, beats on revs
• Johnson & Johnson (JNJ 159.99, -1.61, -1.0%): beats by $0.21, beats on revs; guides FY24 EPS in-line, revs in-line; CFO Joseph Wolk on CNBC says company continues to make progress with talc legal matters; case will be held in Houston; company has enough cash flow despite these lawsuits
• PNC (PNC 189.47, +0.95, +0.5%): beats by $0.19, reports revs in-line; provides Q4 guidance
• Nvidia (NVDA 137.25, -0.82, -0.6%) and AMD (AMD 163.63, -1.64, -1.0%): The Biden administration mulling capping exports of Nvidia (NVDA) and AMD (AMD) chips to certain nations, according to Bloomberg
• Chevron (CVX 148.29, -3.49, -2.3%) and Exxon Mobil (XOM 120.54, -3.54, -2.9%): shares sliding ahead of the open due to drop in oil prices

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region were mixed with Chinese markets being big underperformers. Japan's Nikkei: +0.9%, Hong Kong's Hang Seng: -3.7%, China's Shanghai Composite: -2.5%, India's Sensex: -0.2%, South Korea's Kospi: +0.4%, Australia's All Ordinaries: +0.8%.
  • In economic data:
    • Japan's August Industrial Production -3.3% m/m (expected -3.3%; last -3.3%) and Capacity Utilization -5.3% m/m (last 2.5%)
    • South Korea's September Export Price index 1.2% yr/yr (last 5.7%) and Import Price Index -3.3% yr/yr (last 1.8%)
  • In news:
    • Selling was precipitated by China's disappointing trade data reported on Monday and burgeoning concern that China's stimulus efforts won't be enough to drive a sustained boost to economic growth.
    • The Wall Street Journal reported that President Xi's intention is to prevent a financial crisis but not massively stimulate demand.
    • In related news, Caixin reports that China is considering a plan to issue up to CNY6 trillion ($846 billion) in ultra long-term bonds over three years to help local governments deal with off-balance sheet debt.
    • Japan's Nikkei hit a three-month high during Tuesday's trade, supported by gains in its semiconductor components.
    • There were also reports that Prime Minister Ishiba highlighted a supplementary budget for FY25 that would boost funds supporting an economic package.
• Major European indices are mixed, following form with the tone of the U.S. equity futures market. STOXX Europe 600: -0.2%, Germany's DAX: +0.3%, UK's FTSE 100: -0.5%, France's CAC 40: -0.9%, Italy's FTSE MIB: -0.3%, Spain's IBEX 35: +0.4%.
  • In economic data:
    • Eurozone's August Industrial Production 1.8% m/m (expected 1.8%; last -0.5%) and 0.1% yr/yr (expected -1.0%; last -2.1%)
    • Germany's September WPI -0.3% m/m (expected 0.2%; last -0.8%) and -1.6% yr/yr (last -1.1%); October ZEW Economic Sentiment 13.1 (expected 10.2; last 3.6)
    • UK's August Unemployment Rate 4.0% (expected 4.1%; last 4.1%); September Claimant Count Change 27.9K (expected 20.2K; last 0.3K)
    • France's September CPI -1.3% m/m (expected -1.2%; last 0.5%) and 1.1% yr/yr (expected 1.2%; last 1.8%)
    • Spain's September CPI -0.6% m/m (expected -0.6%; last 0.0%) and 1.5% yr/yr (expected 1.5%; last 2.3%)
  • In news:
    • Other headwinds include a sizable drop in oil prices (Brent crude -4.4% to $74.02/bbl), which is weighing on energy names, following reports Israel is likely to limit its retaliation on Iran to military targets.
    • Separate reports that China's aim with its stimulus measures is to avert a financial crisis, and not massively stimulate demand, is undercutting some of the luxury retail stocks. France and Spain's final September CPI readings maintained their monthly deflation print, furthering the market's view that the ECB will cut rates again this week. Germany's DAX Index has exhibited relative strength on the back of an uptick in economic sentiment. Separately, the UK saw a dip in its unemployment rate for August, but a larger than expected increase in its claimant count.