Stock Market Update

Equity futures point to a slightly lower open this morning after yesterday's action saw the DJIA notch record highs, while weakness in mega-cap tech led to underwhelming performances for the S&P 500 and Nasdaq Composite. 

President Trump signed a bill to fund the federal government through January 30, ending the longest government shutdown in U.S. history. 

While investors looked forward to the end of the shutdown for the backlog of economic data releases that could prompt another rate cut from the Fed, Reuters reports that aside from the September Non-Farm Payrolls report, most of the data points will take some time to be released, if they even are at all. 

Additionally, the expectations for further easing from the Fed are already waning. Boston Fed President Susan Collins said yesterday afternoon that she "would be hesitant to ease policy further." The CME FedWatch tool now assigns a 53.6% probability of another 25-basis point rate cut at the December meeting, down from 62.9% a day ago and 95.5% a month ago. 

The market will not receive any of its scheduled data releases today, though investors have a moderate slate of earnings reports to assess. 

Mega-cap names are mostly lower in the pre-market for the third consecutive day this week. 

In corporate news:  

• Alibaba (BABA 164.70, +6.73, +4.3%) is planning upgrades to its AI app tp compete with ChatGPT, according to Bloomberg. 
• Cisco (CSCO 79.40, +5.44, +7.4%) beat EPS expectations by $0.02, reported revenues in-line, and guided FY26 EPS above consensus, with revenues above consensus. 
• Walt Disney (DIS 112.20, -4.45, -3.8%) beat EPS expectations by $0.06, missed revenue expectations, and provided Q1, FY26, and FY27 guidance. 

Reviewing overnight developments:

Equity indices in the Asia-Pacific region ended Thursday on a mostly higher note. Japan's Nikkei: +0.4%, Hong Kong's Hang Seng: +0.6%, China's Shanghai Composite: +0.7%, India's Sensex: UNCH, South Korea's Kospi: +0.5%, Australia's ASX All Ordinaries: -0.5%.

In news:

• Japan's Prime Minister Takaichi said that the primary balance target could be calculated over several years rather than annually, which would open the door to greater fiscal spending. She repeated that she would like to see higher tax revenues without tax hikes.
• Australia's debt retreated after the release of a strong jobs report for October, which comes just days after top Reserve Bank of Australia policymakers warned that the easing cycle could be over.

In economic data:

• China's October New Loans CNY220.0 bln (expected CNY460.0 bln; last CNY1.290 trln) and October Loan Growth 6.5% yr/yr (expected 6.6%; last 6.6%). October total social financing CNY810.0 bln (expected CNY1.23 trln; last CNY3.53 trln)
• Japan's October PPI 0.4% m/m (last 0.5%); 2.7% yr/yr (expected 2.5%; last 2.8%)
• Australia's October Employment Change 42,200 (expected 20,000; last 12,800) and full Employment Change 55,300 (last 6,500). October Unemployment Rate 4.3% (expected 4.4%; last 4.5%) and October Participation Rate 67.0% (last 67.0%). October MI Inflation Expectations 4.5% (last 4.8%)
• New Zealand's October Electronic Card Retail Sales 0.2% m/m (last -0.5%); 0.8% yr/yr (last 1.0%). September Visitor Arrivals 2.9% m/m (last 2.4%)

Major European indices are mixed. STOXX Europe 600: -0.2% Germany's DAX: -0.5% U.K.'s FTSE 100: -0.7% France's CAC 40: +0.4% Italy's FTSE MIB: +0.4% Spain's IBEX 35: flat

In news:

• The U.K. reported only slight GDP growth for Q3, undershooting expectations.
• The market expects that the Bank of England will announce a rate cut in December and there is speculation that Chancellor Reeves will call for higher taxes when she delivers the Autumn budget statement in two weeks.
• Germany's economy minister warned that trade dynamics are expected to weaken significantly in 2026.

in economic data:

• Eurozone's September Industrial Production 0.2% m/m (expected 0.7%; last -1.1%); 1.2% yr/yr (expected 2.1%; last 1.2%)
• U.K.'s Q3 GDP 0.1% qtr/qtr (expected 0.2%; last 0.3%); 1.3% yr/yr, as expected (last 1.4%). Q3 Business Investment -0.3% qtr/qtr (expected -0.7%; last -1.1%); 0.7% yr/yr (last 3.0%). September Construction Output 0.2% m/m (expected 0.0%; last -0.5%); 1.3% yr/yr (expected 1.2%; last 1.1%). September Industrial Production -2.0% m/m (expected -0.5%; last 0.3%); -2.5% yr/yr (expected -1.2%; last -0.5%). September Manufacturing Production -1.7% m/m (expected -0.7%; last 0.6%); -2.2% yr/yr (expected -0.8%; last -0.7%). September trade deficit GBP18.88 bln (expected deficit of GBP20.80 bln; last deficit of GBP19.53 bln)
• France's Q3 Unemployment Rate 7.7% (expected 7.6%; last 7.6%)
• Swiss October PPI -0.3% m/m (expected -0.1%; last -0.2%); -1.7% yr/yr (last -1.8%)