Stock Market Update

The stock market is on track for a modestly higher open, digesting a boatload of earnings results since yesterday's close that has triggered some information overload.

Most reports were better than expected, but true to recent form, the price action has suggested that there has been some holding back of praise for the results. Call it the overhang of valuation concerns. Be that as it may, the indices are holding up reasonably well, supported by the hope of a year-end rally effort and the enthusiasm that persists around the AI trade.

Currently, the S&P 500 futures are 0.2% above fair value, the Nasdaq 100 futures are 0.2% above fair value, and the DJIA futures are 0.1% above fair value.

The news flow has been dominated by earnings reports from the likes of Qualcomm (QCOM), DoorDash (DASH), Joby Aviation (JOBY), Robinhood Markets (HOOD), AppLovin (APP), Snap (SNAP), Fortinet (FTNT), Figma (FIG), Lyft (LYFT), and elf Beauty (ELF) that have growth stocks in the spotlight.

Separately, the Bank of England kept its bank rate at 4.00%, but four out of nine policymakers voted for a cut, suggesting a possible rate cut in December. That is the main piece of macro news today that is running alongside reports that the FAA will cut flight capacity by 10% at 40 major airports because of the government shutdown and that job cuts in October (153,074) reached their highest level for any October since 2003, according to Challenger, Gray & Christmas.

In corporate news:

• Arm Holdings (ARM 165.11, +4.92, +3.1%): beats by GBP0.06, beats on revs; guides DecQ EPS above consensus, revs above consensus
• DoorDash (DASH) 204.99, -33.01, -13.9%): misses by $0.13, beats on revs; to boost invest in new initiatives and platform development in 2026
• elf Beauty (ELF 91.48, -26.35, -22.4%): beats by $0.11, misses on revs; guides FY26 EPS below consensus, revs below consensus
• Figma (FIG 45.96, +1.95, +4.4%): beats by $0.05, beats on revs; guides FY25 revs above consensus
• Fortinet (FTNT 77.30, -8.69, -10.1%): beats by $0.11, beats on revs; guides Q4 EPS above consensus, revs in-line
• Lyft (LYFT 21.40, +1.50, +7.5%): reports Q3 (Sep) results, revs in-line, Gross Bookings up 16%; Guides Q4 Gross Bookings above consensus at midpoint of range
• Qualcomm (QCOM 177.50, -2.22, -1.2%): beats by $0.13, beats on revs; guides Q1 EPS in-line, revs above consensus
• Robinhood Markets (HOOD 142.42, -0.06, -0.04%): beats by $0.07, beats on revs; names next CFO
• Snap (SNAP 8.68, +1.38, +18.9%): beats by $0.06, beats on revs; guides Q4 revs in-line; Snap and Perplexity announce a partnership to integrate Perplexity’s AI-powered answer engine directly into Snapchat

Reviewing overnight developments:

Equity indices in the Asia-Pacific region climbed on Thursday. Japan's Nikkei: +1.3%, Hong Kong's Hang Seng: +2.1%, China's Shanghai Composite: +1.0%, India's Sensex: -0.2%, South Korea's Kospi: +0.6%, Australia's ASX All Ordinaries: +0.3%.

In news:

• Japan's Prime Minister Takaichi will reportedly seek a JPY10 trln extra budget, about 40% lower than what had been expected.
• Japan's federation of Textile, Chemical, Commerce, Food, and General Services workers will seek a 6% wage hike in the spring.
• China has reportedly purchased 120 kt of U.S. wheat for December delivery. China's Ministry of Finance priced $4 bln in dollar-denominated debt.

In economic data:

• Japan's October Services PMI 53.1 (expected 52.4; last 53.3). September overall wage income 1.9% yr/yr, as expected (last 1.3%)
• South Korea's September Current Account surplus $13.47 bln (last surplus of $9.15 bln)
• India's October Services PMI 54.9 (expected 58.8; last 60.9)
• Australia's September trade surplus AUD3.938 bln (expected surplus of AUD3.93 bln; last surplus of AUD1.11 bln). September Imports 1.1% m/m (last 3.3%) and Exports 7.9% m/m (last -8.7%)

Major European indices trade on a mostly lower note. STOXX Europe 600: -0.1%, Germany's DAX: -0.2%, U.K.'s FTSE 100: -0.3%, France's CAC 40: -0.7%, Italy's FTSE MIB: -0.2%, Spain's IBEX 35: +0.2%.

In news:

• The Bank of England kept its bank rate at 4.00%, but four out of nine policymakers voted for a cut, suggesting a possible rate cut in December.
• Maersk CEO said that demand for goods in the U.S. strengthened in recent weeks and he expects continued strength over the next six months.
• Germany's Bundesbank released its latest financial stability report, expressing concern over significantly elevated equity and bond valuations.

In economic data:

• Eurozone's September Retail Sales -0.1% m/m (expected 0.2%; last -0.1%); 1.0% yr/yr, as expected (last 1.6%)
• Germany's September Industrial Production 1.3% m/m (expected 3.0%; last -3.7%); -1.0% yr/yr (last -3.7%)
• France's Q3 nonfarm payrolls -0.3% qtr/qtr (expected -0.1%; last 0.2%)
• Spain's Industrial Production 1.7% yr/yr (last 3.3%)
• Swiss October Unemployment Rate 3.0%, as expected (last 3.0%)