Stock Market Update

Equity futures point to a higher open that could see the major averages recoup the bulk of yesterday's losses with their opening moves. 

The market finished lower yesterday as the recent mega-cap rally came to a halt, with Meta Platforms (META 676.00, +9.53, +1.4%) a notable laggard, falling over 10% after beating earnings estimates but raising concerns over its massive AI expenditure plans. 

Several other mega-cap names faced some profit-taking after an impressive run that pushed the major averages to record highs for the first three days of the week. 

The mega-caps are back up this morning, boosted by solid earnings results from Amazon (AMZN 250.81, +27.95, +12.5%) and Apple (AAPL 277.56, +6.16, +2.3%).

A plethora of other companies also reported earnings after the close yesterday, giving investors plenty to digest this morning despite a lack of economic data releases. 

In corporate news:

• Amazon (AMZN 250.81, +27.95, +12.5%) beat EPS expectations by $0.38, beat revenue expectations, and guided Q4 revenues in line. The company saw its AWS segment sales increase 20% year-over-year. 
• Apple (AAPL 277.56, +6.16, +2.3%) beat EPS expectations by $0.07, reported revenues in-line, and guided Q1 revenues above consensus. The company missed on iPhone revenues but sees Q1 revenues above consensus.
• Netflix (NFLX 1,111, +22.00, +2.0%) announced a 10-to-1 stock split. Reuters reports that the company is considering a bid for Warner Brothers Discovery (WBD 22.25, +0.63, +2.9%)
• NVIDIA (NVDA 206.83, +4.02, +2.0%) CEO Jensen Huang says he hopes Blackwell chips can be sold in China, but that is President Trump's decision, according to Reuters.

Reviewing overnight developments:

Equity indices in the Asia-Pacific region ended the week on a mostly lower note while Japan's Nikkei (+2.1%) and South Korea's Kospi (+0.5%) hit fresh records. Japan's Nikkei: +2.1%, Hong Kong's Hang Seng: -1.4%, China's Shanghai Composite: +0.7%, India's Sensex: -0.6%, South Korea's Kospi: +0.5%, Australia's ASX All Ordinaries: UNCH.

In news:

• Japan's Finance Minister Katayama commented on the foreign exchange market, acknowledging that recent weakness in the yen is being watched with a "high sense of urgency."
• China has reportedly purchased more soybean shipments from the U.S.
• People's Bank of China Governor Pan said that the short-term rate corridor will be narrowed.
• Economic data released overnight included a deepening contraction in China's Manufacturing PMI (49.0) and ongoing standstill in the growth of the Services sector (50.1).

In economic data:

• China's October Manufacturing PMI 49.0 (expected 49.6; last 49.8) and Non-Manufacturing PMI 50.1, as expected (last 50.0)
• Japan's October Tokyo CPI 2.8% yr/yr (last 2.5%) and Tokyo Core CPI 2.8% yr/yr (expected 2.6%; last 2.5%). September Industrial Production 2.2% m/m (expected 1.5%; last -1.5%). September Retail Sales 0.5% yr/yr (expected 0.8%; last -0.9%) and September Unemployment Rate 2.6% (expected 2.5%; last 2.6%). September Housing Starts -7.3% yr/yr (expected -7.8%; last -9.8%) and Construction Orders 34.7% yr/yr (last 38.9%).
• South Korea's September Industrial Production -1.2% m/m (expected 0.1%; last 2.2%); 11.6% yr/yr (expected 5.9%; last 0.9%). September Retail Sales -0.1% m/m (last -2.4%)
• Hong Kong's Q3 GDP 0.7% qtr/qtr (last 0.4%); 3.8% yr/yr (last 3.1%). September Retail Sales 5.9% yr/yr (last 3.8%) Singapore's September Bank Lending SGD863.8 bln (last SGD851.7 bln). Q3 Business Expectations 8.00 (last 5.00)
• Australia's September Private Sector Credit 0.6% m/m, as expected (last 0.6%). Q3 PPI 1.0% qtr/qtr (expected 0.8%; last 0.7%); 3.5% yr/yr (last 3.4%)

Major European indices are on track for a mostly lower finish to the week while Italy's MIB (+0.1%) outperforms, revisiting this year's peak. STOXX Europe 600: -0.4%, Germany's DAX: -0.3%, U.K.'s FTSE 100: -0.3%, France's CAC 40: -0.2%, Italy's FTSE MIB: +0.1%, Spain's IBEX 35: -0.1%.

In news:

• The European Central Bank's latest Survey of Professional Forecasters showed an uptick in harmonized inflation expectations for 2025 to 2.1% from 2.0% while the GDP growth forecast was increased to 1.2% from 1.1%.
• The inflation forecast for 2026 remained at 1.8% while the growth forecast for next year stayed at 1.1%.
• Several ECB policymakers spoke about policy being in a good place after yesterday's decision to hold the rate corridor unchanged.

In economic data:

• Eurozone's October CPI 0.2% m/m (last 0.1%); 2.1% yr/yr, as expected (last 2.2%). October Core CPI 0.3% m/m (last 0.1%); 2.4% yr/yr (expected 2.3%; last 2.4%)
• Germany's September Retail Sales 0.2% m/m, as expected (last -0.5%); 0.2% yr/yr (last -1.6%). September Import Price Index 0.2% m/m (expected -0.2%; last -0.5%); -1.0% yr/yr (last -1.5%).
• U.K.'s October Nationwide HPI 0.3% m/m (expected 0.0%; last 0.5%); 2.4% yr/yr (expected 2.3%; last 2.2%)
• France's October CPI 0.1% m/m, as expected (last -1.0%); 1.0% yr/yr (expected 1.1%; last 1.2%). September PPI -0.2% m/m (last -0.2%); 0.1% yr/yr (last 0.1%)
• Italy's October CPI -0.3% m/m (expected 0.0%; last -0.2%); 1.2% yr/yr (expected 1.6%; last 1.6%)
• Spain's August Current Account surplus EUR5.08 bln (last surplus of EUR6.27 bln)
• Swiss September Retail Sales 1.5% yr/yr (expected 0.3%; last -0.4%)