Stock Market Update

The S&P 500 futures are trading 71 points above fair value.

Asian markets finished sharply lower on Friday, with the overnight pullback in oil coming too late to offset pressure from elevated global bond yields and geopolitical concerns. Japan's Nikkei 225 fell 0.9%, snapping a two-day winning streak, after Tokyo core inflation accelerated to 2.7% in September, moving above the BOJ's 2% target for the first time in nine months. SoftBank Group (-6.0%) was a notable laggard after completing the final $10 bln tranche of its follow-on investment in OpenAI, bringing its total investment to $64.6 bln, although the Nikkei still gained 2.9% for the week. Hong Kong's Hang Seng plunged 2.6% to 23,972, its largest one-day decline since July, with the US 10-year yield reaching 5.34% and Brent crude holding above $102 during the session. AIA (-6.0%), Xiaomi (-4.0%), HKEX (-3.1%), and Tencent (-2.3%) led the declines, while the absence of Southbound Stock Connect flows added pressure. China's Shanghai Composite remained closed for the National Day holiday.

• In economic data:
  • Japan's September Tokyo CPI increased 2.7% yr/yr (prior 1.9%); Tokyo Core CPI increased 2.7% yr/yr (expected 2.4%; prior 1.8%); and Tokyo CPI excluding food and energy increased 2.7% yr/yr (prior 1.4%).
  • Japan's August Unemployment Rate increased to 2.5% (expected 2.4%; prior 2.4%).
  • South Korea's September CPI increased 0.3% m/m (expected 0.4%; prior 0.2%) and 2.9% yr/yr (expected 2.9%; prior 3.1%).

European markets trade higher, with lower oil prices and easing bond yields helping stabilize sentiment following a volatile week. Germany's DAX rises more than 1% to cross 25,200, led by technology shares, while reports of a possible release of European oil reserves help ease some concerns over energy-driven inflation. Eurozone inflation accelerated to 3.8% yr/yr in September, its highest level in three years and above the 3.7% consensus, while core inflation edges up to 2.5%. France's CAC 40 gains 0.9%, with Schneider Electric (+1.7%), Danone (+3.0%), and Legrand (+2.0%) advancing, although concerns surrounding France's fiscal outlook remain in focus. London's FTSE 100 also trades higher, attempting to recover from four consecutive losses, while IG Group tumbles more than 20% after warning that annual revenue growth will reach only the mid-single-digit range. Geopolitical risks remain in focus amid diminished prospects for a US-Iran truce, although the pullback in oil provides some near-term relief.

• In economic data:
  • Eurozone September CPI increased 0.6% m/m (prior 0.4%) and 3.8% yr/yr (expected 3.7%; prior 3.2%); Core CPI increased 0.2% m/m (prior 0.2%) and 2.5% yr/yr (expected 2.5%; prior 2.4%).
  • Spain's September Unemployment Change totaled 23.6K (expected 17.6K; prior 44.4K).
  • Italy's August Retail Sales increased 0.3% m/m (expected -0.1%; prior -0.4%) and 0.5% yr/yr (prior 1.0%).