Stock Market Update

The S&P 500 futures are up 69 points and are trading 1.2% below fair value, the Nasdaq 100 futures are up 352 points and are trading 1.8% below fair value, and the Dow Jones Industrial Average futures are up 333 points and are trading 0.8% above fair value.

There's a positive slant in early trading following better-than-expected results from Microsoft (MSFT) and Meta Platforms (META). Other mega cap names are higher ahead of the open in response.

Market participants receive the weekly jobless claims report at 8:30 ET, and the April ISM Manufacturing Index at 10:00 ET. Other data today include: April S&P Global US Manufacturing PMI at 9:45 ET, March Construction Spending at 10:00 ET, and the weekly EIA Natural Gas Inventories at 10:30 ET.

The 10-yr yield is down four basis points to 4.14% and the 2-yr yield is down three basis points to 3.59%. 

In corporate news:

• Microsoft (MSFT 430.05, +33.79, +8.8%): beats by $0.24, beats on revs; Azure +35% CC vs +31-32% CC prior guidance; Guides JunQ revs above consensus; guides to Azure Q4 growth of +34-35% CC
• Meta Platforms (META 582.51, +33.51, +6.1%): beats by $1.20, beats on revs; guides Q2 revs in-line, lowers FY25 total expense guidance, raises capex guidance
• Qualcomm (QCOM 140.50, -7.96, -5.4%): beats by $0.03, beats on revs; guides Q3 EPS in-line, revs in-line; Uncertainty around impact of global trade impacting demand across company's businesses; Sees Q3 handset revenue growth of approximately 10%
• McDonald's (MCD 316.60, -3.05, -1.0%): beats by $0.01, misses on revs, global comparable sales decreased 1%
• General Motors (GM 46.50, +1.26, +2.8%): lowers 2025 guidance - now includes an estimated tariff-related impact of $4.0-5.0 bln
• Tesla (TSLA 284.00, +1.84, +0.7%): denies report claiming that the Tesla Board had contacted recruitment firms to initiate a CEO search at the company

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region had a positive showing on Thursday, though markets in China, Hong Kong, Singapore, South Korea, and India were closed for Labor Day. Japan's Nikkei: +1.1%, Hong Kong's Hang Seng: HOLIDAY, China's Shanghai Composite: HOLIDAY, India's Sensex: HOLIDAY, South Korea's Kospi: HOLIDAY, Australia's ASX All Ordinaries: +0.3%.
  • In economic data:
    • Japan's April Manufacturing PMI 48.7 (expected 48.5; last 48.4) and April Household Confidence 31.2 (expected 33.9; last 34.1)
    • South Korea's April trade surplus $4.88 bln (expected surplus of $4.40 bln; last surplus of $4.92 bln). April Imports -2.7% yr/yr (expected -6.9%; last 2.3%) and Exports 3.7% yr/yr (expected -1.6%; last 3.0%)
    • Australia's March trade surplus AUD6.90 bln (expected surplus of AUD3.23 bln; last surplus of AUD2.852 bln). March Imports -2.2% m/m (last 1.8%) and Exports 7.6% m/m (last -4.2%). Q1 Import Price Index 3.3% qtr/qtr (expected 0.3%; last 0.2%) and Export Price Index 2.1% (last 3.6%). April Commodity Prices -6.1% yr/yr (last -7.2%)
  • In news:
    • Chinese press reported that the U.S. has reached out to Chinese officials for talks.
    • The Bank of Japan made no policy changes and lowered its domestic growth forecast for fiscal 2026 to 0.5% from 1.1% and lowered its outlook for fiscal 2027 to 0.7% from 1.0%.
    • Thailand's central bank lowered its policy rate by 25 basis points to 1.75%, as expected.
• Most major European markets are closed for Labor Day while the U.K.'s FTSE (unch) trades little changed. STOXX Europe 600: HOLIDAY, Germany's DAX: HOLIDAY, U.K.'s FTSE 100: UNCH, France's CAC 40: HOLIDAY, Italy's FTSE MIB: HOLIDAY, Spain's IBEX 35: HOLIDAY.
  • In economic data:
    • U.K.'s April Manufacturing PMI 45.4 (expected 44.0; last 44.9). March Mortgage Approvals 64,310 (expected 64,000; last 65,090) and Mortgage Lending GBP12.96 bln (expected GBP3.80 bln; last GBP3.30 bln)
    • Swiss March Retail Sales 2.2% yr/yr (expected 1.9%; last 1.2%)
  • In news:
    • March mortgage lending in the U.K. reached a level not seen since mid-2021 as lower rates drew in buyers.
    • EU officials are reportedly preparing to present their trade proposal to the U.S. next week.