Stock Market Update

The S&P 500 futures are up 25 points and are trading 0.4% above fair value, the Nasdaq 100 futures are down 100 points and are trading 0.5% above fair value, and the Dow Jones Industrial Average futures are up 71 points and are trading 0.2% above fair value.

There's a positive bias in early trading related to pre-open gains in chipmakers and some mega caps. Treasury yields are moving lower, providing some support to equity futures. The 2-yr yield is down three basis points to 3.97%.

Stock futures are also reacting to news that China's National Development and Reform Commission held a press conference about the implementation of stimulus, but did not announce additional measures. 

Earlier, the NFIB Small Business Optimism survey increased to 91.5 in September from 91.2 in August. 

Oil prices are lower after a solid run of late due to worries about Hurricane Milton, which was downgraded to a category 4 and is expected to impact the west coast of Florida as a major hurricane Thursday morning. WTI crude oil futures are 2.2% lower at $75.45/bbl.

In corporate news:

• NVIDIA (NVDA 129.99, +2.27, +1.8%): Hon Hai Precision (HNHPF) aiming to increase capacity to meet increasing demand for NVIDIA artificial intelligence products, according to Bloomberg
• Microsoft (MSFT 408.48, -1.07, -0.3%): downgraded to Perform from Outperform at Oppenheimer
• PepsiCo (PEP 165.87, -1.34, -0.8%): beats by $0.02, misses on revs; reaffirms FY24 EPS guidance
• Chevron (CVX 149.25, -1.87, -1.2%): trading lower ahead of the open due to worries about Hurricane Milton and a move lower in oil prices

Reviewing today's economic data:

• Equity indices in the Asia-Pacific region ended Tuesday on a mostly lower note, though China's Shanghai Composite rose 4.6% upon returning from a week-long closure. Japan's Nikkei: -1.0%, Hong Kong's Hang Seng: -9.4%, China's Shanghai Composite: +4.6%, India's Sensex: +0.7%, South Korea's Kospi: -0.6%, Australia's ASX All Ordinaries: -0.4%.
  • In economic data:
    • Japan's August Household Spending 2.0% m/m (expected 0.5%; last -1.7%); -1.9% yr/yr (expected -2.6%; last 0.1%). August Overall wage income 3.0% yr/yr, as expected (last 3.4%) and Overtime Pay 2.6% yr/yr (expected -2.5%; last -0.2%). August Current Account surplus JPY3.02 trln (expected surplus of JPY2.43 trln; last surplus of JPY2.80 trln). September Economy Watchers Current Index 47.8 (expected 49.3; last 49.0)
    • South Korea's August Current Account surplus $6.60 bln (last surplus of $8.97 bln)
    • Australia's October Westpac Consumer Sentiment 6.2% (last -0.5%) and ANZ Job Advertisements 1.6% m/m (last -1.8%). September NAB Business Survey 7 (last 3) and Business Confidence -2 (last -5)
  • In news:
    • China's National Development and Reform Commission held a press conference about the implementation of stimulus, but did not announce additional measures, which was met with profit taking in China's Shanghai Composite and a sharp reversal into the red in the Hang Seng (-9.4%).
    • The Reserve Bank of Australia did not consider a rate hike in September, according to the latest policy minutes.
• Major European indices trade in the red. STOXX Europe 600: -0.5%, Germany's DAX: -0.1%, U.K.'s FTSE 100: -1.2%, France's CAC 40: -0.6%, Italy's FTSE MIB: -0.2%, Spain's IBEX 35: -0.3%.
  • In economic data:
    • Germany's August Industrial Production 2.9% m/m (expected 0.8%; last -2.9%); -2.5% yr/yr (last -5.8%)
    • France's August trade deficit EUR7.4 bln (expected deficit of EUR5.5 bln; last deficit of EUR6.0 bln)
  • In news:
    • A couple European Central Bank policymaker Kazaks said that a rate cut is likely to be made in October while policymaker Vasle cautioned that the market should not assume that another cut will be made in December.
    • Tiremaker Continental will spin-off its automotive unit.