Stock Market Update

The S&P 500 futures are down two points and are trading fractionally below fair value, the Nasdaq 100 futures are down 20 points and are trading 0.1% below fair value, and the Dow Jones Industrial Average futures are down 25 points and are trading 0.1% below fair value.

Stock futures indicate a lower open after yesterday's bounce. News that the DOJ is considering remedies for Google including a possible breakup in its antitrust case has contributed to the negative bias. Alphabet (GOOG) shares are down nearly 1.0% ahead of the open.

Overseas, Chinese markets continue to decline due to a lack of stimulus measures, but China's Ministry of Finance announced a briefing for Saturday, October 12, to discuss fiscal policy and economic development. China's Shanghai Composite dropped 6.6%.

US Treasury yields are little changed from yesterday's settlement levels. The 10-yr yield is up one basis point to 4.04% and the 2-yr yield is down one basis point to 3.97%.

The weekly MBA Mortgage Applications Index dropped 5.1% after last week's 1.3% decline. Other economic releases today include: 

• 10:00 ET: August Wholesale Inventories (Briefing.com consensus 0.2%; prior 0.2%)
• 10:30 ET: Weekly crude oil inventories (prior +3.89 mln)
• 14:00 ET: September FOMC Minutes

In corporate news:

• Alphabet (GOOG 164.15, -1.55, -0.9%): DOJ considering remedies for Google including possible breakup in antitrust case; says "DOJ’s radical and sweeping proposals risk hurting consumers, businesses, and developers"
• Taiwan Semiconductor Manufacturing (TSM 187.89, +1.84, +1.0%): reports September 2024 revenue
• Pfizer (PFE 29.31, +0.13, +0.5%): CEO to meet activist investor Starboard Value, according to FT.com
• Boeing (BA 152.03, -2.62, -1.7%): mulling options to raise billions through stock sale, according to Reuters
• UPS (UPS 131.62, +0.66, +0.5%): initiated as a Buy at Citigroup 

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region had a mixed showing, although Chinese markets saw continued selling with Hong Kong's Hang Seng losing another 6.6% on top of the 9.4% plunge on Tuesday. Japan's Nikkei: +1.0%, Hong Kong's Hang Seng: -1.4%, China's Shanghai Composite: -6.6%, India's Sensex: -0.2%, South Korea's Kospi: closed for holiday, Australia's ASX All Ordinaries: +0.2%.
  • In economic data:
    • Japan's October Reuters Tankan Index 7.0 (last 4.0); September preliminary Machine Tool Orders -6.5% yr/yr (last -3.5%)
  • In news:
    • China's Ministry of Finance announced a briefing for Saturday, October 12, to discuss fiscal policy and economic development.
    • New Zealand cut its overnight call rate by 50 basis points to 4.75%, as expected, while the Reserve Bank of India left its repurchase rate unchanged at 6.50%, as expected, and changed its stance to neutral from withdrawal of accommodation.
    • In corporate news, Couche-Tard raised its offer for Seven & ito $18.19 per share, up about 20% from the prior offer, according to Bloomberg; and Taiwan Semiconductor reported a 39.6% yr/yr increase in September revenues.
    • FTSE Russell announced South Korea bonds will be included in its WGBI Index, effective November 2025, and that India's bonds will be added to the FTSE Emerging Markets Government Bond Index, effective September 2025, according to Reuters.
• Major European indices are mostly sitting on modest gains. STOXX Europe 600: +0.2%, Germany's DAX: +0.3%, U.K.'s FTSE 100: +0.3%, France's CAC 40: +0.3%, Italy's FTSE MIB: flat, Spain's IBEX 35: -0.2%.
  • In economic data:
    • Germany's August Trade Balance EUR22.5 bln (expected EUR18.9 bln; last EUR16.9 bln)
    • France's September Car Registrations -11.1% yr/yr (last -24.3%)
  • In news:
    • ECB member Villeroy pointed to the prospect of another rate cut at the October meeting.
    • The new prime minister in France, Michel Barnier, survived a no-confidence vote.
    • London-based Rio Tinto announced the acquisition of Arcadium Lithium for $6.7 billion, or $5.85 per share, in cash.
    • Germany's trade balance in August was larger than expected on better demand from the U.S. and UK.