Stock Market Update

The S&P 500 futures currently trade 28 points above fair value. 

Asian markets finished mixed on Tuesday, with an AI-driven rebound in Japan and South Korea contrasting with renewed technology weakness in China. Japan's Nikkei 225 jumped 1.7% to snap a three-day losing streak, led by Advantest (+10%), Ibiden (+9%), SoftBank Group (+5%), Lasertec (+5%), and Tokyo Electron (+3%) as investors returned to beaten-down AI and semiconductor shares. China's Shanghai Composite fell 1.3% and the Shenzhen Component sank 2.5%, with Cambricon Technologies (-6%), Eoptolink Technology (-6%), Hygon Information Technology (-6%), NAURA Technology (-6%), and SMIC (-3%) highlighting a striking divergence from the technology rebound elsewhere in the region. The People's Bank of China announced plans for an emergency liquidity facility for non-bank financial institutions facing large-scale redemptions, providing a potential backstop against financial-market stress even as Chinese equities remained under pressure. Hong Kong's Hang Seng lost 0.7%, with Duality Biotherapeutics (-22%), Xiaomi (-2%), Meituan (-2%), and Akeso (-1%) outweighing pockets of technology strength. South Korea's KOSPI surged 3.1%, with SK Square (+11%), SK Hynix (+7%), and Samsung Electronics (+5%) leading the rebound as third-quarter GDP expanded a stronger-than-expected 1.0% q/q, supported by semiconductor-driven exports and investment. The simultaneous strength in Korean economic growth and semiconductor shares offers a notable counterpoint to recent concerns surrounding AI investment returns, although China's technology selloff shows investors remain highly selective within the theme. Easing oil prices and hopes for reduced Middle East tensions provide another tailwind ahead of major technology earnings and this week's Federal Reserve and Bank of Japan policy decisions.

• In economic data:
  • South Korea's Q3 GDP increased 1.0% q/q (expected 0.7%; prior 0.6%) and 3.4% yr/yr (expected 3.0%; prior 3.7%).
  • South Korea's October Consumer Confidence fell to 105.4 from 106.6.
  • Japan's BoJ Core CPI increased 2.5% yr/yr (prior 2.3%).
  • Japan's Corporate Services Price Index increased 3.7% yr/yr (expected 3.7%; prior 3.5%).
  • China's industrial profits increased 15.5% yr/yr year-to-date through September (prior 15.7%).

European markets trade mostly higher, with strength in technology shares helping continental markets overcome mixed corporate results and lingering political and geopolitical uncertainty. Germany's DAX gains 0.4% as Siemens Energy, Infineon Technologies, and SAP participate in the broader AI-related rebound, offsetting weakness in Beiersdorf (-4%) and Mercedes-Benz (-4%) following disappointing corporate updates. France's CAC 40 rises 0.5% despite consumer confidence plunging to 80, its lowest level since 2013, as domestic concerns surrounding fiscal policy, rising borrowing costs, and cost-of-living protests persist. London's FTSE 100 notably underperforms with a 0.6% decline, as HSBC (-6%) retreats following a slight quarterly profit miss and Reckitt (-6%) falls after lowering its annual sales-growth forecast, while mining shares provide some support. The U.K. backdrop is further complicated by shop-price inflation accelerating to 2.1% from 1.4%, adding another inflationary signal at a time when weaker corporate guidance is raising questions surrounding consumer demand. The STOXX Europe 600 gains 0.2%, while Italy's FTSE MIB and Spain's IBEX 35 each rise 0.3% as investors position for this week's Federal Reserve and European Central Bank policy decisions.

• In economic data:
  • U.K. shop-price inflation accelerated to 2.1% from 1.4%.
  • France's October Consumer Confidence fell to 80 (expected 85; prior 85), its lowest level since 2013.
  • Spain's Q3 Unemployment Rate rose to 10.18% (expected 9.90%; prior 9.87%).
  • Eurozone September M3 Money Supply increased 3.5% yr/yr (expected 3.5%; prior 3.5%) to EUR17,717.3 bln (prior EUR17,646.5 bln).
  • Eurozone September Private Sector Loans increased 3.1% yr/yr (expected 3.1%; prior 3.1%), while loans to non-financial corporations increased 4.2% yr/yr (prior 4.2%).