Stock Market Update

The S&P 500 futures are down 24 points and are trading 0.4% below fair value, the Nasdaq 100 futures are down 110 points and are trading 0.6% below fair value, and the Dow Jones Industrial Average futures are down 161 points and are trading 0.4% below fair value.

Stock futures are lower after Friday's strong jobs report fueled a rally in equities. The labor market data also led participants to rethink how aggressive the Fed will be with rate cuts.

Pre-open losses in some mega cap names have weighed down contracts linked to the Dow industrials, S&P 500, and Nasdaq 100. Rising market rates are another contributing factor. The 10-yr yield is up two basis points 4.00% and the 2-yr yield is up six basis points to 3.99%.

Today's economic data is limited to the August Consumer Credit report at 3:00 ET.

In corporate news:

• Apple (AAPL 224.19, -2.61, -1.2%): downgraded to Hold from Buy at Jefferies; is slowly moving away from annual upgrade schedule for some products, according to Bloomberg
• Amazon.com (AMZN 183.42, -3.09, -1.7%): downgraded to Equal Weight from Overweight at Wells Fargo
• Chevron (CVX 152.40, +1.66, +1.1%): sells interests in the Athabasca Oil Sands Project and Duvernay Shale for $6.5 bln
• Pfizer (PFE 29.42, +0.84, +2.9%): Starboard Value aiming to take stake in Pfizer, according to WSJ

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region began the week on a mostly higher note while markets in China remained closed for one more day and Australia's bond market was closed as well. Japan's Nikkei: +1.8%, Hong Kong's Hang Seng: +1.6%, China's Shanghai Composite: HOLIDAY, India's Sensex: -0.8%, South Korea's Kospi: +1.6%, Australia's ASX All Ordinaries: +0.7%.
  • In economic data:
    • China's September FX Reserves $3.316 trln (expected $3.30 trln; last $3.288 trln)
    • Japan's August Leading Index 106.7 (expected 107.2; last 109.3) and Coincident Indicator -3.7% m/m (last 3.1%). September FX Reserves $1.25 trln (last $1.24 trln)
    • South Korea's September FX Reserves $419.97 bln (last $415.92 bln)
    • Hong Kong's September FX Reserves $422.80 bln (last $423.50 bln)
    • Singapore's September FX Reserves $389.8 bln (last $384.6 bln)
    • Australia's October MI Inflation Gauge 0.1% m/m (last -0.1%)
  • In news:
    • Officials from China's National Development and Reform Commission will speak to the press about stimulus measures tomorrow.
    • Press reports from China have indicated some growth in home sales during the recent holiday week.
    • Bank of Japan's quarterly regional economic report maintained its view of seven regions while the assessment for two regions increased.
    • The Reserve Bank of New Zealand shadow board is split regarding the size of the expected rate cut on Wednesday.
• Major European indices trade on a mostly higher note. STOXX Europe 600: UNCH, Germany's DAX: -0.2%, U.K.'s FTSE 100: +0.5%, France's CAC 40: +0.2%, Italy's FTSE MIB: +0.2%, Spain's IBEX 35: +0.8%.
  • In economic data:
    • Eurozone's October Sentix Investor Confidence -13.8 (expected -14.6; last -15.4). August Retail Sales 0.2% m/m, as expected (last 0.0%); 0.8% yr/yr (expected 1.0%; last -0.1%)
    • Germany's August Factory Orders -5.8% m/m (expected -1.9%; last 3.9%)
    • U.K.'s September Halifax House Price Index 0.3% m/m (expected 0.2%; last 0.3%); 4.7% yr/yr (last 4.3%)
  • In news:
    • European Central Bank policymaker Villeroy de Galhau said that the ECB is likely to cut rates again in October due to the rising risk of undershooting the 2.0% inflation target.
    • Germany's Economy Ministry expects that domestic GDP will contract 0.2% in 2024.
    • The chief of staff for British Prime Minister Starmer resigned as part of a cabinet reshuffle.