Stock Market Update

The S&P 500 futures are up 23 points and are trading 0.4% above fair value, the Nasdaq 100 futures are up 120 points and are trading 0.4% above fair value, and the Dow Jones Industrial Average futures are up 115 points and are trading 0.3% above fair value.

Early action features a positive bias. Ongoing momentum has contributed to the upside action, but the vibe could shift following this morning's economic releases. The Retail Sales report for August will be released at 8:30 ET and the Industrial Production and Capacity Utilization report for August will be released at 9:15 ET. 

Treasury yields are little changed from yesterday in front of the data. The 10-yr yield is down one basis point to 3.61% and the 2-yr yield is unchanged at 3.56%.

There's also some hesitation in play ahead of the FOMC policy decision tomorrow. 

In corporate news:

• Microsoft (MSFT 438.15, +6.81, +1.6%): raises dividend and approves new share repurchase program
• Intel (INTC 22.25, +1.35, +6.5%): and Amazon Web Services announce co-investment in custom chip designs under a multi-year, multi-billion-dollar framework involving product and wafers from Intel; plans to turn Foundry business into a subsidiary, according CNBC; postponing new factories in Germany and Poland, according to Bloomberg; CEO sends letter to employees
• Starbucks (SBUX 96.40, +0.09, +0.1%): North America CEO Michael Conway to retire, effective November 30
• Steel Dynamics (STLD 110.99, -0.02, -0.1%): guides Q3 EPS below consensus
• Hewlett Packard Enterprise (HPE 17.80, +0.57, +3.3%): The CMA investigated and cleared the anticipated acquisition of Juniper Networks
• SolarEdge (SEDG 20.49, -1.46, -6.7%): downgraded to Underperform from Hold at Jefferies
• Micron (MU 87.87, +0.69, +0.8%): price target lowered to $150 from $175 at Citigroup

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region ended Tuesday on a mostly higher note while markets in China and South Korea remained closed for holidays. Japan's Nikkei: -1.0%, Hong Kong's Hang Seng: +1.4%, China's Shanghai Composite: HOLIDAY, India's Sensex: +0.1%, South Korea's Kospi: HOLIDAY, Australia's ASX All Ordinaries: +0.2%.
  • In economic data:
    • Japan's July Tertiary Industry Activity Index 1.4% m/m (expected 0.8%; last -1.2%)
    • India's August WPI Inflation 1.31% yr/yr (expected 1.80%; last 2.04%). August trade deficit $29.65 bln (last deficit of $23.50 bln)
    • Singapore's August trade surplus SGD5.90 bln (expected surplus of SGD3.83 bln; last surplus of SGD6.54 bln). August non-oil exports -4.7% m/m (expected -3.3%; last 12.2%); 10.7% yr/yr (expected 15.0%; last 15.7%). Q2 Unemployment Rate 2.0%, as expected (last 2.0%)
  • In news:
    • Chipmakers struggled in Japan amid reports that the U.S. and Japan are close to agreeing on a pact to limit technology exports to China.
    • Tokyo Steel lowered the prices of some of its products for the first time in two years.
    • There is growing speculation that the Bank of Japan will hold off on its next rate change to study the impact of hikes that have been made so far.
• Major European indices trade in the green. STOXX Europe 600: +0.6%, Germany's DAX: +0.7%, U.K.'s FTSE 100: +0.6%, France's CAC 40: +0.6%, Italy's FTSE MIB: +0.8%, Spain's IBEX 35: +1.4%.
  • In economic data:
    • Eurozone's September ZEW Economic Sentiment 9.3 (expected 16.3; last 17.9)
    • Germany's September ZEW Economic Sentiment 3.6 (expected 17.1; last 19.2) and Current Conditions -84.5 (expected -80.0; last -77.3)
  • In news:
    • Germany's economic sentiment weakened significantly in September with the Current Conditions index reaching its lowest level since the depth of the pandemic.
    • British home improvement retailer Kingfisher reported strong results for the first half and raised its guidance for the remainder of the year.
    • European Central Bank policymaker Simkus repeated that the likelihood of a rate cut in October is very small.
    • European Commissioner for Internal Market Breton resigned yesterday.