Stock Market Update

The S&P 500 futures are up ten points and are trading 0.2% above fair value, the Nasdaq 100 futures are up 25 points and are trading 0.1% above fair value, and the Dow Jones Industrial Average futures are up 71 points and are trading 0.2% above fair value.

The positive bias has continued in early trading this morning. Pre-open gains in mega caps and chipmakers have contributed to the upside bias. Participants are also waiting on another inflation reading in the form of the August Producer Price Index at 8:30 ET.

In front of the data, the European Central Bank is expected to cut the deposit facility rate by 25-bps rate at 8:15 ET.

The 10-yr yield is up two basis points to 3.67% and the 2-yr yield is up one basis point to 3.66%.

In corporate news:

• Oxford Industries (OXM 72.83, -10.83, -13.0%): misses by $0.23, misses on revs; guides Q3 EPS below consensus, revs below consensus; guides FY25 EPS below consensus, revs below consensus
• Moderna (MRNA 72.58, -6.93, -8.7%): provides R&D day highlights progress and strategic priorities; sees FY25 revenue below consensus
• Norfolk Southern (NSC 251.65, -2.12, -0.8%): appoints Mark R. George as President and CEO; reaffirms FY24 guidance
• Boeing (BA 160.44, -0.89, -0.6%): union members will vote on tentative labor deal today, according to CNN
• General Mills (GIS 73.56, +0.44, +0.6%): in discussions to sell North American yogurt unit, according to Bloomberg
• Microsoft (MSFT 423.50, +0.46, +0.1%): will eliminate 650 gaming jobs, according to Variety 

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region ended Thursday on a mostly higher note with Japan's Nikkei (+3.4%) bouncing off this week's low. Japan's Nikkei: +3.4%, Hong Kong's Hang Seng: +0.8%, China's Shanghai Composite: -0.2%, India's Sensex: +1.8%, South Korea's Kospi: +2.3%, Australia's ASX All Ordinaries: +1.2%.
  • In economic data:
    • Japan's August PPI -0.2% m/m (expected 0.0%; last 0.5%); 2.5% yr/yr (expected 2.8%; last 3.0%). Q3 BSI Large Manufacturing Conditions 4.5 (expected -2.5; last -1.0)
    • Hong Kong's Q2 Industrial Production 0.7% yr/yr (last 1.8%)
    • Australia's September MI Inflation Expectations 4.4% (last 4.5%)
    • New Zealand's August Electronic Card Retail Sales 0.2% m/m (last -0.1%); -2.9% yr/yr (last -4.9%). August FPI 0.2% m/m (last 0.4%)
  • In news:
    • The strong advance in Japan took place despite comments from Bank of Japan policymaker Tamura, who said that rate hike expectations are too low, adding that he sees a neutral rate around 1.00%.
    • There was some speculation that the People's Bank of China will lower its short-term reverse repurchase rate on Friday ahead of next week's mid-autumn festival.
• Major European indices trade on a firmly higher note. STOXX Europe 600: +1.0%, Germany's DAX: +1.1%, U.K.'s FTSE 100: +0.7%, France's CAC 40: +0.8%, Italy's FTSE MIB: +1.0%, Spain's IBEX 35: +1.2%.
  • In economic data:
    • Germany's August WPI -0.8% m/m (expected 0.1%; last 0.3%); -1.1% yr/yr (last -0.1%)
    • Italy's Q2 Unemployment Rate 6.8% (expected 7.1%; last 7.2%)
    • Spain's August CPI 0.0% m/m, as expected (last -0.5%); 2.3% yr/yr (expected 2.2%; last 2.8%). August Core CPI 2.7% yr/yr, as expected (last 2.8%)
  • In news:
    • The European Central Bank's expected 25-bps rate cut to the deposit facility rate and a 60-bps reduction to the main refinancing rate at 8:15 ET.
    • The EU is reportedly looking to repurpose up to EUR350 bln of coronavirus-related debt.
    • The Bank of England noted that the implementation of Basel 3.1 rules will have a very small impact on capital requirements of British banks.