Stock Market Update

Equity futures point to a slightly lower open this morning as the market awaits a 10:00 a.m. ET address from Fed Chair Kevin Warsh at the Jackson Hole Symposium.

Monetary policy expectations have shifted considerably throughout the year, with the market expecting two rate cuts by the end of the year in January before those expectations shifted to expect at least one hike as a result of oil-driven inflation. Currently, the CME FedWatch tool assigns a 36% probability to a 25-basis point rate hike at the September FOMC meeting, which leaves the market anticipating any color from Mr. Warsh this morning.

Stocks are coming off a winning Thursday in which all three major indices notched gains and moved into positive territory for the week as a strong round of tech earnings, including chip giant NVIDIA (NVDA 226.96, -1.02, -0.5%) propelled the market higher. Leadership was narrow, however, and the information technology sector was the only S&P 500 sector that finished with a gain.

In corporate news:

• Autodesk (ADSK 259.99, -10.59, -3.9%) beat EPS expectations by $0.18, beat revenue expectations, guided Q3 EPS below consensus with revenues above consensus, and guided FY27 EPS in-line with revenues above consensus.
• Marvell (MRVL 221.30, -20.15, -8.4%) beat EPS expectations by $0.01, reported revenues in-line, and guided Q3 EPS and revenues in-line.
• Ulta Beauty (ULTA 532.00, -8.10, -1.5%) beat EPS expectations by $0.35, beat revenue expectations, and raised FY27 EPS, revenue, and comparable sales guidance.

Reviewing overnight developments: 

Equity indices in the Asia-Pacific region ended the week on a mixed note with South Korea's Kospi (-1.8%) showing relative weakness. Japan's Nikkei: +0.4%, Hong Kong's Hang Seng: +0.1%, China's Shanghai Composite: -0.1%, India's Sensex: +0.4%, South Korea's Kospi: -1.8%, Australia's ASX All Ordinaries: +0.6%.

In news: 

• Japan's Prime Minister Takaichi confirmed plans to make changes to her cabinet in the second half of September.
• Japan's 2-year JGB auction saw weak demand amid building expectations for more rate hikes from the Bank of Japan.
• Australian furniture retailer Harvey Norman said that retail conditions became more variable in the last reporting period with little improvement expected in the near term.
• Standard & Poor's affirmed China's A+ sovereign rating with a Stable outlook.

In economic data: 

• Japan's August Tokyo CPI 1.9% yr/yr (last 1.8%) and Tokyo Core CPI 1.8%, as expected (last 1.7%). July jobs/applications ratio 1.18 (expected 1.19; last 1.18) and July Unemployment Rate 2.4% (expected 2.5%; last 2.5%)
• India's July Industrial Production 6.7% yr/yr (expected 6.0%; last 8.8%) and Manufacturing Output 7.3% m/m (last 9.5%)

Major European indices are looking for a higher finish to the week. STOXX Europe 600: +0.4%, Germany's DAX: +0.6%, U.K.'s FTSE 100: +0.2%, France's CAC 40: +1.0%, Italy's FTSE MIB: +0.8%, Spain's IBEX 35: +0.5%.

In news: 

• France's Q2 GDP was revised down to show no growth and there was also a small contraction in nonfarm payrolls during the second quarter.
• French Finance Minister Lescure said that the economy suffered greatly after the summer heatwave, adding that data for Q3 will also be impacted.
• Meanwhile, Spain saw slightly hotter-than-expected inflation in August.

In economic data: 

• Eurozone's August Business and Consumer Survey 98.4 (expected 97.5; last 97.1)
• Germany's July Import Price Index 0.2% m/m (expected 0.3%; last -0.7%); 6.8% yr/yr (last 6.1%). August Unemployment Change 4,000, as expected (last 6,000) and Unemployment Rate 6.4%, as expected (last 6.4%)
• France's Q2 GDP 0.0% qtr/qtr (expected 0.2%; last -0.2%); 0.5% yr/yr (expected 0.7%; last 0.9%). August CPI 0.7% m/m, as expected (last 0.6%); 2.4% yr/yr (last 2.1%). July Consumer Spending 0.5% m/m (expected 0.1%; last 0.6%).Q2 nonfarm payrolls -0.1% qtr/qtr (last -0.1%)
• Italy's June Industrial Sales -1.0% m/m (last 0.5%); 3.1% yr/yr (last 5.2%). August Business Confidence 89.9 (expected 90.0; last 89.7) and Consumer Confidence 94.5 (expected 95.0; last 94.2)
• Spain's August CPI 0.7% m/m (expected 0.6%; last 0.3%); 4.3% yr/yr (expected 4.2%; last 3.6%). August Core CPI 2.9% yr/yr (last 3.0%). July Retail Sales -0.3% yr/yr (last 0.6%)
• Swiss August KOF Leading Indicators 106.7 (expected 103.0; last 104.2