Stock Market Update

The S&P 500 futures are up ten points and are trading 0.2% above fair value, the Nasdaq 100 futures are up 100 points and are trading 0.5% above fair value, and the Dow Jones Industrial Average futures are down 58 points and are trading 0.1% below fair value.

Contracts tied to the S&P 500 and Nasdaq 100 are higher. The positive response to earnings news from Netflix (NFLX) has contributed to the early bias. Dow industrials futures are lower due to negative responses to earnings from American Express (AXP) and Procter & Gamble (PG). 

Treasury yields are little changed from yesterday's settlement. The 10-yr yield is up one basis point to 3.98% and the 2-yr yield is unchanged at 3.98%.

Today's economic lineup features September Housing Starts and Building Permits at 8:30 ET.

In corporate news:

• Netflix (NFLX 732.08, +44.43, +6.5%): beats by $0.28, reports revs in-line; guides Q4 EPS above consensus, revs above consensus; guides FY25 revenue in-line; Advertising revenue to roughly double each year
• Apple (AAPL 236.90, +4.75, +2.1%): iPhone 16 sales in China increased 20% for the first three weeks, according to Bloomberg
• American Express (AXP 274.22, -11.33, -4.0%): beats by $0.20, reports revs in-line; raises FY24 EPS guidance
• Bank of America (BAC 42.70, +0.10, +0.2%): 10% owner Berkshire Hathaway's (BRK.A / BRK.B) Warren Buffett sold 8,694,538 shares at $42.055 - $43.05 worth nearly $370 mln
• Procter & Gamble (PG 170.09, -1.18, -0.7%): beats by $0.03, misses on revs; reaffirms FY25 EPS guidance, revs guidance
• SLB (SLB 43.66, -0.33, -0.8%): beats by $0.01, misses on revs; to divest its interests in Palliser Block
• Intuitive Surgical (ISRG 504.00, +30.27, +6.4%): beats by $0.20, beats on revs; procedures grew ~18%; expects FY24 procedure growth of +16.0-17.0%, up from +15.5-17.0%

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region ended the week on a mostly higher note. Japan's Nikkei: +0.2% (-1.6% for the week), Hong Kong's Hang Seng: +3.6% (-2.1% for the week), China's Shanghai Composite: +2.9% (+1.4% for the week), India's Sensex: +0.3% (-0.2% for the week), South Korea's Kospi: -0.6% (-0.2% for the week), Australia's ASX All Ordinaries: -0.9% (+0.7% for the week).
  • In economic data:
    • China's Q3 GDP 0.9% qtr/qtr (expected 1.0%; last 0.7%); 4.6% yr/yr, as expected (last 4.7%). September Fixed Asset Investment 3.4% yr/yr (expected 3.3%; last 3.4%), September Industrial Production 5.4% yr/yr (expected 4.6%; last 4.5%), September Retail Sales 3.2% yr/yr (expected 2.5%; last 2.1%), September Unemployment Rate 5.1% (expected 5.3%; last 5.3%), and September House Prices -5.8% yr/yr (last -5.3%)
    • Japan's September National CPI -0.3% m/m (last 0.5%); 2.5% yr/yr (last 3.0%). September National Core CPI 2.4% yr/yr (expected 2.3%; last 2.8%)
    • Hong Kong's September Unemployment Rate 3.0% (last 3.0%)
  • In news:
    • China reported above-consensus growth figures for September, though Q3 GDP growth (0.9%; expected 1.0%) was a touch shy of estimates.
    • People's Bank of China Governor Pan said that the reserve requirement ratio could be reduced again this year and that the loan prime rate will likely be lowered on Monday.
    • U.S. authorities are reportedly investigating Taiwan Semiconductor Manufacturing (TSM) over alleged sales of chips to Huawei despite a ban that is in place.
    • Japan's new top currency diplomat said that moves in the yen are being closely watched after the currency weakened to 150/dollar, making for a continuation of a pullback from the September high in the 139 area.
• Major European indices trade near their flat lines while France's CAC (+0.6%) outperforms with consumer names contributing to the relative strength. STOXX Europe 600: +0.2% (+0.6% week-to-date), Germany's DAX: +0.2% (+1.3% week-to-date), U.K.'s FTSE 100: -0.3% (+1.3% week-to-date), France's CAC 40: +0.6% (+0.7% week-to-date), Italy's FTSE MIB: +0.3% (+2.4% week-to-date), Spain's IBEX 35: -0.1% (+1.4% week-to-date).
  • In economic data:
    • Eurozone's August Current Account surplus EUR31.5 bln (expected surplus of EUR42.2 bln; last surplus of EUR39.6 bln). August Construction Orders 0.1% m/m (last -0.5%)
    • U.K.'s September Retail Sales 0.3% m/m (expected -0.3%; last 1.0%); 3.9% yr/yr (expected 3.2%; last 2.3%). September Core Retail Sales 0.3% m/m (expected -0.3%; last 1.1%); 4.0% yr/yr (expected 3.2%; last 2.2%)
    • Spain's August trade deficit EUR4.8 bln (last deficit of EUR3.2 bln)
  • In news:
    • Expectations for another rate cut from the Bank of England have been pressured after September Retail Sales beat expectations (0.3%; expected -0.3%).
    • Separately, the market continues to price in another rate cut from the European Central Bank for December. ECB policymaker Villeroy de Galhau said that the 2.0% inflation target should be reached earlier than expected.