Stock Market Update

The stock market is on track for a mostly higher open after yesterday's action pushed the S&P 500 to fresh record highs as investors largely overlooked the current government shutdown. 

Today's economic data will be impacted by the shutdown, as the market will no longer receive the weekly jobless claims data or August factory orders data. 

However, yesterday's release of the September ADP Payrolls (-32k; Briefing.com consensus: 40k) showed an unexpected decline in private payrolls, boosting the odds of further easing from the Fed this year, with the market now fully pricing in a 25-basis point cut later this month.

With the Senate out for the Yom Kippur holiday today, the next vote on a resolution to fund the government will wait until tomorrow. Politico reports that Senate Majority Leader John Thune says he is willing to discuss the shape of future healthcare talks with Democrats, but only if enough Democrats support continuing resolution to reopen the government.

In corporate news:

• The White House is pursuing deals in 20-30 industries before the midterms, with regulatory relief and equity stakes offered in exchange for concessions, according to Reuters.
• Taiwan is considering a high-tech partnership with the U.S., according to Reuters.
• Berkshire Hathaway (BRK.B 496.60, -1.60, -0.3%) is set to purchase Occidental Petroleum's (OXY 48.18, +0.46, +1.0%) OxyChem for $9.7 billion.
• Nike (NKE 74.57, +0.37, +0.5%) was upgraded to Overweight from Sector Weight at KeyBanc, with a target of $90.
• Tesla (TSLA 467.91, +8.45, +1.8%) trades higher in the pre-market ahead of its Q3 deliveries release today. 

Reviewing overnight developments:

Equity indices in the Asia-Pacific region ended Thursday on a higher note with South Korea's Kospi (+2.7%) reaching a fresh record while markets in China and India were closed for holidays. Japan's Nikkei: +0.9%, Hong Kong's Hang Seng: +1.6%, China's Shanghai Composite: HOLIDAY, India's Sensex: HOLIDAY, South Korea's Kospi: +2.7%, Australia's ASX All Ordinaries: +1.1%.

In news:

• The outperformance in South Korea was supported by strength in Samsung and SK Hynix after they announced a deal with OpenAI.
• Shipper Maersk said that China's container shipments to Latin America, Africa, and Europe increased markedly while shipments to North America are down about 15% yr/yr.
• Japan's Agriculture Minister Shinjiro Koizumi is reportedly a slight favorite to win Saturday's LDP leadership vote.

In economic data:

• Japan's September Monetary Base -6.1% yr/yr (expected -3.8%; last -4.1%). September Household Confidence 35.3 (expected 35.1; last 34.9)
• South Korea's September CPI 0.5% m/m (expected 0.4%; last -0.1%); 2.1% yr/yr (expected 2.0%; last 1.7%)
• Hong Kong's August Retail Sales 3.8% yr/yr (last 1.8%)
• Australia's August trade surplus AUD1.825 bln (expected surplus of AUD6.130 bln; last surplus of AUD6.612 bln)

Major European indices trade in the green while the U.K.'s FTSE (unch) lags after hitting a fresh record high earlier in the session. STOXX Europe 600: +0.8%, Germany's DAX: +1.3%, U.K.'s FTSE 100: UNCH, France's CAC 40: +1.4%, Italy's FTSE MIB: +0.3%, Spain's IBEX 35: +0.2%.

In news:

• British food retailer Tesco increased its guidance while discount air carrier Ryanair reported strong metrics for September.
• The British government may exempt new listings on the London Stock Exchange from paying stamp duty amid growing concerns about falling competitiveness of British markets.
• There was some speculation that the Swiss National Bank could cut its policy rate into negative territory after cool September CPI.

In economic data:

• Eurozone's August Unemployment Rate 6.3% (expected 6.2%; last 6.2%)
• France's August government budget deficit EUR157.5 bln (last deficit of EUR142.0 bln)
• Italy's August Unemployment Rate 6.0%, as expected (last 5.9%)
• Spain's September Unemployment Change -4,800 (expected 15,400; last 21,900)
• Swiss September CPI -0.2% m/m, as expected (last -0.1%); 0.2% yr/yr (expected 0.3%; last 0.2%)