Stock Market Update

Equity futures point to a flat opening this morning after a rally in tech names and mixed strength across the broader market sent the S&P 500 and Nasdaq Composite to record highs yesterday. 

With the exception of a few corporate headlines in the AI space, yesterday's session was largely uneventful. The market did not receive any economic data of note, and the September FOMC minutes offered no surprises, keeping the market's expectations for further easing steady after their release. 

The U.S. government shutdown is still in effect, which means the market will not receive the weekly jobless claims data today.  New York Fed President John Williams (FOMC voting member) said in an interview that he favors additional rate reductions amid concerns over the labor market, according to The New York Times. 

While the market will not receive any consequential economic data today, investors have a handful of high-profile earnings releases to evaluate ahead of next week's ramp-up.

In corporate news:

• Delta Air Lines (DAL 60.69, +3.57, +6.3%) beat EPS expectations by $0.18, beat revenue expectations, guided Q4 EPS in-line with revenues above consensus, and guided FY25 EPS above consensus. CEO Ed Bastian stated in a CNBC interview that the company is not seeing any impact from the government shutdown. 
• PepsiCo (PEP 139.00, +0.16, +1.2%) beat EPS expectations by $0.03 and reported revenues in-line. The company has named Steve Schmitt as its new CFO after Jamie Claufield announced his retirement. 
• Novo Nordisk (NVO 58.87, -0.74, -1.2%) is set to acquire Akero Therapeutics (AKRO 54.89, +8.40, +18.1%) for up to $5.2 billion. 
• Tesla (TSLA 433.34, -5.35, -1.2%) is being investigated for alleged full self-driving traffic violations, according to Reuters.

Reviewing overnight developments:

Equity indices in the Asia-Pacific region were mostly higher Thursday, including China's Shanghai Composite (+1.3%), which reopened following the Golden Week holiday. Japan's Nikkei: +1.8%, Hong Kong's Hang Seng: -0.3%, China's Shanghai Composite: +1.3%, India's Sensex: +0.5%, South Korea's Kospi: HOLIDAY, Australia's ASX All Ordinaries: +0.3%.

In news:

• The latter reportedly resulted in an 11.5% yr/yr increase in cross-border trips, albeit with some generally conservative spending activity.
• China's Ministry of Commerce, meanwhile, made a splash after the holiday with an announcement that it is tightening its own export restrictions on rare earth materials for high-tech products and military applications.
• Japan, for its part, continued in rally mode, with investors relishing the prospect of more accommodative fiscal and monetary policy under Takaishi's leadership and a well-received 5-yr JGB auction.
• USD/JPY topped 153.00 overnight, spurring more speculation about the possibility of MOF intervention soon.
• Separately, HSBC made a bid to take Hang Seng Bank private for HK$155.00 per share, and the Philippines central bank unexpectedly cut its base interest rate by 25 bps to 4.75% versus an expectation for no change.

In economic data:

• Japan's September Machine Tool Orders 9.9% yr/yr (prior 8.5%)
• Australia's October Consumer Inflation Expectation 4.8% (prior 4.7%)

Major European indices are mixed in Thursday's trading, with Germany (+0.4%) and France (+0.4%) outperforming. President Macron is expected to name a new prime minister before the weekend. STOXX Europe 600: -0.1%, Germany's DAX: +0.4%, U.K.'s FTSE 100: -0.3%, France's CAC 40: +0.4%, Italy's FTSE MIB: -1.1%, Spain's IBEX 35: -0.3%.

In news:

• President Macron is expected to name a new prime minister before the weekend.
• The U.K.'s FTSE 100 has been weighed down by Lloyds Banking Group, which warned it may face an additional provision that is material for the car finance scandal, according to The Guardian, weakness in HSBC after its bid for Hang Seng Bank, and Bank of England policymaker Mann making a case for policy to remain restrictive due to inflation concerns.
• Germany reported a decline in both exports and imports for August.

In economic data:

• Germany's August Trade Balance EUR17.2 bln (expected EUR15.1 bln; prior EUR14.7 bln), with exports -0.5% m/m (expected 0.3%; prior -0.6%) and imports -1.3% m/m (expected -0.5%; prior -0.1%)