Stock Market Update

The S&P 500 futures are up four points and are trading 0.1% above fair value, the Nasdaq 100 futures are up 30 points and are trading 0.1% above fair value, and the Dow Jones Industrial Average futures are up 30 points and are trading 0.1% above fair value.

Contracts tied to the S&P 500, Nasdaq 100, and Dow industrials are flattish as investors digesting more earnings results. Morgan Stanley (MS) and United Airlines (UAL) have both garnered positive responses to their results.

Stocks in the semiconductor space continue to struggle after yesterday's sharp selling. ASML (ASML) is down another 4% ahead of the open after its disappointing Q3 earnings report and ugly-looking net bookings number. Intel (INTC) is another name losing ground in front of the open after news that China wants to review the company's products sold in China, according to Reuters.

The weekly MBA Mortgage Applications Index dropped 17% with purchase applications declining 7% and refinance applications plunging 26%.

In corporate news:

• United Airlines (UAL 64.91, +0.86, +1.3%): beats by $0.16, reports revs in-line; guides Q4 EPS in-line; Authorizes new share repurchase program for up to $1.5 bln of outstanding shares of common stock and warrants
• Omnicom (OMC 100.36, -3.66, -3.5%): reports EPS in-line, beats on revs
• J.B. Hunt Transport (JBHT 187.75, +13.10, +7.5%): beats by $0.10, beats on revs
• Interactive Brokers (IBKR 147.70, -5.28, -3.5%): misses by $0.07, beats on revs
• Morgan Stanley (MS 114.70, +2.48, +2.2%): beats by $0.29, beats on revs
• U.S. Bancorp (USB 47.80, +0.80, +1.7%): beats by $0.04, reports revs in-line
• Intel (INTC 22.29, -0.37, -1.6%): China wants review of Intel (INTC) products sold in China, according to Reuters; Qualcomm to wait until after the U.S. election before deciding on an offer to buy Intel (INTC), according to Bloomberg
• Boeing (BA 151.94, -0.41, -0.3%): lower after judge seeks additional information before plea deal ruling, according to Bloomberg

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region were mostly lower. Japan's Nikkei: -1.9%, Hong Kong's Hang Seng: -0.2%, China's Shanghai Composite: +0.1%, India's Sensex: -0.4%, South Korea's Kospi: -0.9%, Australia's All Ordinaries: -0.5%.
  • In economic data:
    • Japan's August Core Machinery Orders -1.9% m/m (expected -0.1%; last -0.1%) and -3.4% yr/yr (expected 3.6%; last 8.7%)
    • South Korea's September Unemployment Rate 2.5% (last 2.4%)
    • New Zealand's Q3 CPI 0.6% qtr/qtr (expected 0.7%) and 2.2% yr/yr (expected 2.2%)
  • In news:
    • Japan's Nikkei is leading the losses, as its semiconductor components took a hit on the heels of ASML's disappointing Q3 earnings report and ugly-looking net bookings number.
    • The view from BOJ member Adachi that the BOJ should "proceed cautiously" with policy adjustments, according to Bloomberg, failed to turn the tide of sentiment.
    • In other central bank news, the Bank of Thailand surprised with a 25 basis points cut in its one-day repurchase rate to 2.25%. That is the first cut since May 2020.
    • The Bank of Indonesia kept its main policy rate steady at 6.0%, as expected, and the Philippines central bank cut its policy rate by 25 basis points, as expected, to 6.0%.
    • Following a CPI report that showed inflation within the RBNZ's target band of 1-3% for the first time since 2021, chatter picked up that the RBNZ could institute a large rate cut at its November meeting.
    • Markets in China were fairly steady, digesting the news that the housing ministry, along with the Ministry of Finance and PBOC, will hold a press briefing on Thursday to talk about property sector reforms.
    • Separately, China said it wants a review of Intel (INTC) products sold in China, according to Reuters.
• Major European indices are mostly lower, trading with modest losses. STOXX Europe 600: -0.3%, Germany's DAX: -0.4%, UK's FTSE 100: +0.7%, France's CAC 40: -0.6%, Italy's FTSE MIB: -0.2%, Spain's IBEX 35: +0.1%.
  • In economic data:
    • UK's September CPI 0.0% m/m (expected 0.1%; last 0.3%) and 1.7% yr/yr (expected 1.9%; last 2.2%); September RPI -0.3% m/m (expected 0.1%; last 0.6%) and 2.7% yr/yr (expected 3.1%; last 3.5%); August House Price Index 2.8% yr/yr (expected 2.5%; last 2.2%)
    • Italy's September CPI -0.2% m/m (expected -0.2%; last 0.2%) and 0.7% yr/yr (expected 0.7%; last 1.1%)
  • In news:
    • The UK's FTSE 100 is a notable exception, outperforming on rate-cut speculation that revved up when the September CPI report showed inflation running below the 2% target for the first time since April 2021.
    • Gilt yields are lower following the report and the pound is losing ground against other major currencies.
    • In other UK news, Chancellor Reeves is pushing the need for tax increases and spending cuts to plug a GBP40 billion budget gap.
    • Elsewhere, disappointing Q3 shipments data from Stellantis, and disappointing Q3 results from luxury retailer LVMH and semiconductor equipment maker ASML have kept buying interest in check.