Stock Market Update

The S&P 500 futures currently trade 60 points above fair value. 

Equity indices in the Asia-Pacific region began the week on a higher note with Japan's Nikkei (+2.5%) and South Korea's Kospi (+2.6%) hitting fresh records while markets in New Zealand were closed for a holiday. U.S. Treasury Secretary Bessent and U.S. trade rep Greer announced that a framework for a deal with China has been agreed upon, suggesting that the additional 100% tariff will not be implemented on November 1. South Korea's President Lee said that talks with the U.S. regarding South Korea's $350 bln investment are still deadlocked.

• In economic data:
  • China's September FDI -10.4% YTD (last -12.7%) and September Industrial Profit 3.2% YTD (last 0.9%)
  • Hong Kong's September trade deficit HKD50.2 bln (last deficit of HKD25.4 bln). September Imports 13.6% m/m (last 11.5%) and Exports 16.1% m/m (last 14.5%)

---Equity Markets---

• Japan's Nikkei: +2.5%
• Hong Kong's Hang Seng: +1.1%
• China's Shanghai Composite: +1.2%
• India's Sensex: +0.7%
• South Korea's Kospi: +2.6%
• Australia's ASX All Ordinaries: +0.4%

Major European indices trade on a somewhat higher note with a sentiment boost after U.S. trade officials said that a framework for a deal with China has been reached, reducing the likelihood of additional tariffs being implemented on November 1. Moody's affirmed France's Aa3 rating but lowered the outlook to Negative due to risks from political instability related to the ongoing budget battle. Bank of France Governor Villeroy de Galhau said that it is necessary to reduce France's deficit to 3% of its budget to stabilize public debt.

• In economic data:
  • Eurozone's September M3 Money Supply 2.8% yr/yr (expected 2.7%; last 2.9%). September Private Sector Loans 2.6% yr/yr, as expected (last 2.5%) and September loans to nonfinancials 2.9% yr/yr (last 3.0%)
  • Germany's October ifo Business Climate Index 88.4 (expected 88.1; last 87.7). October Current Assessment 85.3 (expected 85.5; last 85.7) and Business Expectations 91.6 (last 89.8)

---Equity Markets---

• STOXX Europe 600: +0.1%
• Germany's DAX: -0.1%
• U.K.'s FTSE 100: +0.1%
• France's CAC 40: -0.1%
• Italy's FTSE MIB: +0.9%
• Spain's IBEX 35: +0.6%