Stock Market Update

The S&P 500 futures currently trade 65 points below fair value

Equity indices in the Asia-Pacific region finished mostly lower on Tuesday, with outsized losses registered by Japan's Nikkei (-2.7%) and Hong Kong's Hang Seng (-1.7%). Markets were trending lower in spite of Wall Street's big gains on Monday, but then selling interest accelerated after China announced new sanctions on five U.S. subsidiaries of South Korean shipping company Hanwha Ocean, breathing new life into the U.S-China trade tension. Additionally, China has started collecting additional port fees for U.S. cargo ships and said it will be investigating the impact of the U.S. probe into China's shipping and shipbuilding industries, according to CNBC. Samsung reported preliminary Q3 profits that were better than expected, yet that wasn't enough to keep the Kospi (-0.6%) in positive territory, as regional markets reacted to the U.S.-China standoff.

• In economic data:
  • Japan's M2 Money Stock 1.6% yr/yr (prior 1.3%)
  • Australia's September NAB Business Confidence 7 (prior 4)
  • India's September WPI Inflation 0.13% yr/yr (expected 0.5%; prior 0.52%)
  • Singapore's Q3 GDP 1.3% qtr/qtr (expected 0.3%; prior 1.5%) and 2.9% yr/yr (expected 2.0%; prior 4.5%)

---Equity Markets---

• Japan's Nikkei: -2.7%
• Hong Kong's Hang Seng: -1.7%
• China's Shanghai Composite: -0.6%
• India's Sensex: -0.4%
• South Korea's Kospi: -0.6%
• Australia's All Ordinaries: +0.3%

Major European indices are on the defensive in Tuesday's trade, following course with indices in the Asia-Pacific region and the U.S. equity futures market. The weakness stems from an increase in U.S.-China trade tension, which has been stoked by China's move to impose sanctions on five U.S. subsidiaries of South Korean shipping company Hanwha Ocean after President Trump threatened to impose an additional tariff of 100% on imports from China if it does not relax its export controls for rare earth minerals. Separately, France's President Macron said he is not resigning, and the latest employment data out of the U.K., which featured an increase in the September claimant count and a bump in the unemployment rate, is stirring talk of a possible BOE rate cut in December. The British pound has weakened against the dollar in response. 

• In economic data:
  • Eurozone's October ZEW Economic Sentiment 22.7 (prior 30.2; prior 26.1)
  • Germany's September CPI 0.2% m/m (expected 0.2%; prior 0.1%) and 2.4% yr/yr (expected 2.4%; prior 2.2%); October ZEW Economic Sentiment 39.3 (expected 41.2; prior 37.3)
  • U.K.'s September Claimant Count Change 25.8K (expected 10.3K; prior -2.0K); unemployment rate 4.8% (expected 4.7%; prior 4.7%); and August average earnings index + bonus 5.0% (expected 4.7%; prior 4.8%)

---Equity Markets---

• STOXX Europe 600: -0.9%
• Germany's DAX: -1.3%
• U.K.'s FTSE 100: -0.4%
• France's CAC 40: -1.1%
• Italy's FTSE MIB: -1.1%
• Spain's IBEX 35: -0.4%