Stock Market Update

The S&P 500 futures are down three points and are trading in-line with fair value, the Nasdaq 100 futures are down 24 points and are trading 0.1% below fair value, and the Dow Jones Industrial Average futures are unchanged and are trading fractionally above fair value.

There isn't much movement in the futures market as participants have exercised restraint in front of the 8:30 a.m. ET release of the August Personal Income and Spending Report, which contains the Fed's preferred inflation gauge in the PCE Price Index.

There wasn't a lot of restraint in Chinese markets. They continued to ride China's stimulus wave (Shanghai Composite +2.9%), completing the best week of returns since 2008. They will be kept in check naturally next week since markets will be closed in China for the Golden Week holidays.

The U.S. market will be locked on the ISM Manufacturing PMI, ISM Services PMI, and September employment report next week. There is a lot of ground to cover between now and next Friday, however.

This Friday will include a focus on Costco's (COST 892.80, -8.64, -1.0%) earnings report, the response in the stock and bond markets to the Personal Income and Spending Report, dollar-yen action after Shigeru Ishiba was named Japan's new prime minister, a potential East Coast/Gulf Coast port strike on October 1, the aftermath of Hurricane Helene, and the price action itself as market participants survey whether a further breakout, or a consolidation trade, takes shape.

In corporate news:

• Costco (COST 892.80, -8.64, -1.0%): beats by $0.07, reports revs in-line, adjusted comparable sales of +6.9%
• Vail Resorts (MTN 187.00, -0.95, -0.5%): misses by $0.44, reports revs in-line; provides FY25 outlook; increases repurchase plan; announces two-year transformation plan, including workforce reduction
• Intel (INTC 23.96, +0.04, +0.2%): not interested in Arm's (ARM 148.68, -0.48, -0.3%) offer for the company's product unit, according to Bloomberg
• Bristol Myers (BMY 52.35, +2.23, +4.5%): receives FDA approval for schizophrenia drug Cobenfy
• Echostar (SATS 26.13, +0.37, +1.4%): DirecTV (T 21.68, +0.03, +0.1%) and Dish closing in on merger agreement, according to Bloomberg
• Wynn Resorts (WYNN 93.40, +2.37, +2.6%): Morgan Stanley upgrades to Overweight from Equal Weight
• Establishment Labs (ESTA 52.46, +11.26, +27.4%): receives approval from the U.S. FDA for the use of Motiva SmoothSilk Ergonomix and Motiva SmoothSilk Round breast implants in primary and revision breast augmentation

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region ended the week on a mixed note. Japan's Nikkei: +2.3%, Hong Kong's Hang Seng: +3.6%, China's Shanghai Composite: +2.9%, India's Sensex: -0.3%, South Korea's Kospi: -0.8%, Australia's ASX All Ordinaries: +0.2%.
  • In economic data:
    • China's August Industrial Profit 0.5% YTD (last 3.6%)
    • Japan's September Tokyo CPI -0.2% m/m (last 0.5%); 2.2% yr/yr (last 2.6%). September Tokyo Core CPI 2.0%, as expected (last 2.4%). July Leading Index 109.3 (expected 109.5; last 109.1) and Coincident Indicator 3.1% m/m (expected 3.0%; last -3.9%)
    • South Korea's August Manufacturing BSI Index 69 (last 71)
  • In news:
    • Shigeru Ishiba will be Japan's next prime minister after winning the LDP leadership contest.
    • China saw weak industrial profits in August, which reduced the year-to-date growth rate to just 0.5% from 3.6% in July. This did not stop China's bond yields from extending their rise off record lows amid focus on CNY2 trln of upcoming debt issuance, which is roughly half the amount that was issued during the Global Financial Crisis.
    • Australia's Treasurer Chalmers said that cooperation with China on investment, trade, and decarbonization will be increased.
• Major European indices are looking for a higher finish to the week. STOXX Europe 600: +0.3%, Germany's DAX: +1.0%, U.K.'s FTSE 100: +0.6%, France's CAC 40: +0.3%, Italy's FTSE MIB: +0.5%, Spain's IBEX 35: +0.3%.
  • In economic data:
    • Eurozone's September Business and Consumer Survey 96.2 (expected 96.5; last 96.5)
    • Germany's September Unemployment Change 17,000 (expected 13,000; last 4,000) and Unemployment Rate 6.0%, as expected (last 6.0%)
    • U.K.'s September CBI Distributive Trades Survey 4 (expected -17; last -27)
    • France's flash September CPI -1.2% m/m (expected -0.7%; last 0.5%); 1.2% yr/yr (expected 1.6%; last 1.8%). August PPI 0.2% m/m (last 0.3%); -6.3% yr/yr (last -5.7%). August Consumer Spending 0.2% m/m (expected -0.1%; last 0.2%)
    • Italy's July Industrial Sales -0.4% m/m (last -0.4%); -4.7% yr/yr (last -4.4%). August PPI 0.7% m/m (last 1.3%); -0.8% yr/yr (last -1.1%)
    • Spain's September CPI -0.6% m/m (expected -0.1%; last 0.0%); 1.5% yr/yr (expected 1.9%; last 2.3%). September Core CPI 2.4% yr/yr (last 2.7%). September Business Confidence -0.7 (last -3.6). Q2 GDP 0.8% qtr/qtr, as expected (last 0.8%); 3.1% yr/yr (expected 2.9%; last 2.9%)
  • In news:
    • Flash September CPI readings from France (-1.2%; expected -0.7%) and Spain (-0.6%; expected -0.1%) showed deflation in prices, bringing their respective yr/yr growth rates well below the European Central Bank's 2.0% target.
    • Rate cut speculation is on the rise after European Central Bank policymaker Schnabel discussed softening labor market conditions and a stagnating economy.
    • There was speculation that the new French government will push for renewed merger talks between Renault and Stellantis.