Stock Market Update

The S&P 500 futures are down 15 points and are trading 0.2% below fair value, the Nasdaq 100 futures are down 25 points and are trading 0.1% below fair value, and the Dow Jones Industrial Average futures are down 190 points and are trading 0.5% below fair value.

Equity futures and Treasury yields are lower in early action. Geopolitical tension is top of mind for market participants after Russian President Putin expanded conditions for using nuclear weapons after Ukraine hit Russia with western produced missiles, according to Bloomberg.

The 10-yr yield is down four basis points to 4.37% and the 2-yr yield is down four basis points to 4.24%.

Dow component Walmart (WMT) is higher ahead of the open in response to better-than-expected earnings and revenue. Lowe's (LOW) also reported earnings results, which garnered a negative response from participants. 

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

In corporate news:

• Alphabet (GOOG 176.18, -0.62, -0.4%): DOJ pushing company to sell Chrome, according to Bloomberg; UK CMA has decided that the Alphabet Inc. (Google) and Anthropic PBC partnership does not qualify for investigation
• Walmart (WMT 87.17, +3.12, +3.7%): beats by $0.05, beats on revs; guides FY25 EPS in-line
• Hewlett Packard Enterprise (HPE 21.33, -0.05, -0.2%): and Juniper (JNPR) met with DOJ to discuss merger approval, according to Bloomberg
• Lowe's (LOW 267.51, -4.26, -1.6%): beats by $0.07, beats on revs; raises FY25 EPS in-line, revs in-line

Reviewing overnight developments:

• It was a sea of green across Asia, as the region's major indices finished Tuesday on a positive note amid a dearth of economic data. Japan's Nikkei: +0.5%, Hong Kong's Hang Seng: +0.4%, China's Shanghai Composite: +0.7%, India's Sensex: +0.3%, South Korea's Kospi: +0.1%, Australia's ASX All Ordinaries: +0.9%.
  • No data today
  • In news:
    • The Reserve Bank of Australia released the Minutes from its November meeting, but there were no major revelations in the document. The central bank expects that inflation will not make a sustainable return to target until 2026.
    • Multiple Chinese government and bank officials spoke in favor of expanding the market access for equities and bonds in Hong Kong.
    • The leader of Japan's opposition party said that the goal is to approve the proposed economic package, that is expected to be bigger than last year's additional spending plan of JPY13 trln, by the end of the week.
• Major European indices trade in the red with Italy's MIB (-1.8%) continuing yesterday's underperformance with weak leadership from Stellantis and bank stocks. STOXX Europe 600: -0.7%, Germany's DAX: -0.9%, U.K.'s FTSE 100: -0.3%, France's CAC 40: -1.1%, Italy's FTSE MIB: -1.8%, Spain's IBEX 35: -1.4%.
  • In economic data:
    • Eurozone's October CPI 0.3% m/m, as expected (last -0.1%); 2.0% yr/yr, as expected (last 2.0%). Core CPI 0.2% m/m, as expected (last 0.2%); 2.7% yr/yr, as expected (last 2.7%). September Current Account surplus EUR37.0 bln (expected surplus of EUR27.0 bln; last surplus of EUR31.5 bln)
    • Spain's October Consumer Confidence 79.6 (last 84.8)
    • Swiss October trade surplus CHF8.063 bln (expected surplus of CHF4.25 bln; last surplus of CHF4.942 bln)
  • In news:
    • Sovereign debt has caught a bid after Russia warned that the just-approved Ukrainian use of U.S. munitions inside Russian territory will result in "an appropriate and tangible" response, fueling fears of a broader conflict.
    • Bank of England policymaker Greene warned against cutting rates too quickly due to a concern that the recently proposed budget will boost inflation.
    • Meanwhile, European Central Bank policymaker Panetta said that a tightening bias is no longer needed in the eurozone.