Stock Market Update

Equity futures point to a modestly higher open this morning after yesterday's trade saw mixed action in the broader market while mega-cap weakness pushed the major averages lower. Stocks have run into some resistance in recent sessions, with the S&P 500 closing lower for the fourth consecutive day in a row. 

Mega-caps, chipmakers, and other AI plays have faced the brunt of recent weakness amid concerns over AI spending and valuations. NVIDIA's (NVDA 184.52, +3.16, +1.7%) earnings release after the close today will be closely watched as investors look for signs of continuous future growth potential in the AI trade. 

Before the close, the market will receive the FOMC minutes from the October meeting, which is also particularly important given a recent change in sentiment. A wave of hawkish commentary from Fed officials has dampened the market's odds of another rate cut in December to coin-flip probabilities. 

Meanwhile, the market is currently receiving a batch of earnings reports from big-box retailer names. 

The MBA Mortgage Applications Index for the week ended November 15 decreased 5.2%, from a prior increase of 0.6%. 

In corporate news:

• Lowe's (LOW 233.50, +13.93, +6.3%) beat EPS expectations by $0.09, reported revenues in-line, and issued mixed guidance for FY26. 
• Target (TGT 85.92, -2.61, -3.0%) beat EPS expectations by $0.07, reported revenues in-line, reaffirmed its sales guidance, and guided FY26 EPS in-line.
• Tesla (TSLA 406.49, +5.24, +1.3%) CEO Elon Musk and NVIDIA (NVDA 184.52, +3.16, +1.7%) CEO Jensen Huang will speak at a Saudi investment forum today, according to Reuters. 
• Warner Bros. Discovery (WBD 23.90, +0.21, +0.9%) reportedly wants Paramount Skydance (PSKY 16.15, +0.06, +0.4%) to lift its offer to around $30 per share, from $23.50 per share, according to Axios. 

Reviewing overnight developments:

Equity indices in the Asia-Pacific region ended the midweek session on a mixed note. Japan's Nikkei: -0.3%, Hong Kong's Hang Seng: -0.4%, China's Shanghai Composite: +0.2%, India's Sensex: +0.6%, South Korea's Kospi: -0.6%, Australia's ASX All Ordinaries: -0.2%.

• Japan Prime Minister Takaichi's cabinet is expected to approve stimulus spending on Friday with reports suggesting that the package could exceed the previously reported amount of JPY20 trln.
• Continued weakness in Japanese debt drove yields on most tenors to fresh highs for the year while expectations for a December rate hike from the Bank of Japan receded amid indications the central bank plans no hikes until March.
• China reinstated its ban against Japanese seafood amid growing political tension between the two nations.

In economic data:

• Japan's September Core Machinery Orders 4.2% m/m (expected 2.2%; last -0.9%); 11.6% yr/yr (expected 5.4%; last 1.6%)
• Australia's October MI Leading Index 0.1% m/m (last 0.0%). Q3 Wage Price Index 0.8% qtr/qtr, as expected (last 0.8%); 3.4% yr/yr, as expected (last 3.4%)
• New Zealand's Q3 Input PPI 0.2% qtr/qtr (expected 0.9%; last 0.6%) and Output PPI 0.6% qtr/qtr (expected 0.7%; last 0.6%)

Major European indices trade near their flat lines while Spain's IBEX (+0.5%) outperforms, fighting to stay above its November low. STOXX Europe 600: +0.1%, Germany's DAX: +0.2%, U.K.'s FTSE 100: -0.1%, France's CAC 40: -0.1%, Italy's FTSE MIB: -0.1%, Spain's IBEX 35: +0.5%.

In news:

• The U.K.'s inflation report for October showed a slight deceleration in the yr/yr rate to 2.1% from 2.2% while Core PPI remained at 2.4%.
• Still, expectations for a December rate cut from the Bank of England increased slightly.
• FT reported that the British government is preparing to sell British Steel after rescuing the company from insolvency in 2019.
• The Central Bank of Iceland lowered its policy rate by 25 basis points to 7.25%.

In economic data:

• Eurozone's October CPI 0.2% m/m, as expected (last 0.1%); 2.1% yr/yr, as expected (last 2.2%). October Core CPI 0.3% m/m, as expected (last 0.1%); 2.4% yr/yr, as expected (last 2.4%). Q3 Labor Cost Index 3.5% yr/yr (last 3.6%). September Current Account surplus EUR23.1 bln (expected surplus of EUR15.9 bln; last surplus of EUR22.2 bln)
• U.K.'s October CPI 0.4% m/m, as expected (last 0.0%); 3.6% yr/yr (expected 3.5%; last 3.8%). October Core CPI 0.3% m/m (expected 0.4%; last 0.0%); 3.4% yr/yr, as expected (last 3.5%). October Input PPI -0.3% m/m (expected 0.0%; last -0.1%); 0.5% yr/yr (expected 0.7%; last 0.7%) and Output PPI 0.0% m/m (expected 0.1%; last 0.0%); 3.6% yr/yr (last 3.5%). October House Price Index 2.6% yr/yr (expected 3.0%; last 3.0%)