Stock Market Update

The S&P 500 futures are up 15 points and are trading 0.3% 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 up 100 points and are trading 0.3% above fair value.

Stock futures are higher in front of a big week of earnings news. Some of the headliners include Alphabet (GOOG), which reports on Tuesday, Microsoft (MSFT) and Meta Platforms, which report on Wednesday, and Apple (AAPL) and Amazon.com (AMZN) on Thursday.

Oil prices are sharply lower after Israeli attacks over the weekend were limited to military bases in Iran. WTI crude oil futures are down 6.1% to $67.39/bbl and Brent crude oil futures are down 5.8% to $71.28/bbl. 

The 10-yr note yield is up three basis points to 4.26% and the 2-yr yield is up one basis point to 4.11%.

There is no US economic data of note today.

In corporate news:

• Boeing (BA 154.05, -0.96, -0.6%): aiming to raise $15 bln in capital today, according to Bloomberg
• TSMC (TSM 199.69, -3.75, -1.8%): founder says company will face "severe" growth challenges amid free trade restrictions, according to Bloomberg
• Alphabet (GOOG 170.40, +3.41, +2.0%): developing artificial intelligence that will take over computers, according to The Information
• Delta (DAL 55.57, +1.45, +2.7%): filed lawsuit against CrowdStrike (CRWD) over IT outage, according to CNBC
• Apple (AAPL 232.30, +0.89, +0.4%): aiming to update Mac lineup this week, according to Bloomberg

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region began the week on a higher note. Japan's Nikkei: +1.8%, Hong Kong's Hang Seng: UNCH, China's Shanghai Composite: +0.7%, India's Sensex: +0.8%, South Korea's Kospi: +1.1%, Australia's ASX All Ordinaries: +0.1%.
  • In economic data:
    • China's September Industrial Profit -3.5% YTD (last 0.5%)
    • Hong Kong's September trade deficit HKD53.2 bln (last deficit of HKD33.1 bln). September Imports 1.4% m/m (last 7.9%) and Exports 4.7% m/m (last 6.4%)
  • In news:
    • Japan's ruling coalition lost its lower-house majority, which could lead to the resignation of Prime Minister Ishiba after just a few weeks in office.
    • China's industrial profit weakened notably in September and is now down 3.5% for the year when compared to the same period in 2023.
    • The People's Bank of China launched a reverse repurchase facility aimed at maintaining liquidity.
    • China's National People's Congress will be held between November 4 and 8.
• Major European indices are mixed. STOXX Europe 600: -0.1%, Germany's DAX: -0.1%, U.K.'s FTSE 100: -0.2%, France's CAC 40: +0.2%, Italy's FTSE MIB: UNCH, Spain's IBEX 35: +0.2%.
  • In economic data:
    • U.K.'s October CBI Distributive Trades Survey -6 (expected -9; last 4)
    • Spain's September Retail Sales 4.1% yr/yr (last 2.4%)
  • In news:
    • European Central Bank President Lagarde said that disinflation is on track, though a temporary inflationary uptick is expected in Q4 due to base effects related to energy prices. Volkswagen is considering cost-saving measures, including wage cuts and freezes.
    • Moody's affirmed France's Aa2 rating but lowered the outlook to Negative from Stable while DBRS affirmed Italy's BBB rating with a Stable trend.