Stock Market Update

Equity futures point to a slightly higher open this morning after yesterday's action saw the S&P 500 and Nasdaq Composite quickly nab fresh record highs just after the open before a broad-based retreat sent the major averages lower. 

The market will actually have some economic data to assess this morning, with the preliminary reading of the October University of Michigan Consumer Sentiment Survey (Briefing.com consensus: 54.5) set to be released at 10:00 a.m. ET. 

On the policy front, CNBC reports that Treasury Secretary Scott Bessent has narrowed the list of potential Fed Chair candidates to 5 people, which includes Fed Vice Chair Michelle Bowman, Fed Governor Chris Waller, Director of the National Economic Council Kevin Hassett, former Fed Governor Kevin Warsh, and BlackRock (BLK) Fixed Income CIO Rick Rieder. President Trump is expected to make a final decision by January.

Mr. Waller (FOMC voting member) joined CNBC this morning and stated that he still believes rates need to be cut, but the Fed has to be careful about it.

In corporate news:

• The Senate passes legislation that will limit artificial intelligence chip exports to China, according to Bloomberg.
• Levi Strauss (LEVI $22.85, -1.69, -6.9%) beat EPS expectations by $0.03, beat revenue expectations, and raised its FY25 EPS and revenue guidance.
• Tesla's (TSLA 437.24 +1.70, +0.4%) China-produced EV sales rose 2.8% year over year in September, according to Reuters.

Reviewing overnight developments:

Equity indices in the Asia-Pacific region ended the week on a mostly lower note while South Korea's Kospi (+1.7%) reached a fresh record after being closed for nearly a week. Japan's Nikkei: -1.0%, Hong Kong's Hang Seng: -1.7%, China's Shanghai Composite: -0.9%, India's Sensex: +0.4%, South Korea's Kospi: +1.7%, Australia's ASX All Ordinaries: -0.1%.

In news:

• Japan's incoming Prime Minister Takaichi said that there is no immediate need to revise the government's accord with the Bank of Japan, adding that she is not in a position to comment on rate hike speculation.
• The market still feels pretty confident that another rate increase will be announced before the end of the year.
• Reserve Bank of Australia Governor Bullock said that the Australian economy is in a good spot, though services inflation remains sticky.

In economic data:

• Japan's September PPI 0.3% m/m (expected 0.1%; last -0.2%); 2.7% yr/yr (expected 2.5%; last 2.7%). September Bank Lending 3.8% yr/yr (expected 3.7%; last 3.5%)
• New Zealand's September Business PMI 49.9 (last 49.9)

Major European indices trade near their flat lines. STOXX Europe 600: UNCH, Germany's DAX: -0.3%, U.K.'s FTSE 100: UNCH, France's CAC 40: +0.1%, Italy's FTSE MIB: -0.2%, Spain's IBEX 35: +0.3%. 

In news:

• French President Macron is expected to nominate his sixth prime minister over the past two years after Sebastien Lecornu failed to form a government.
• There is growing speculation that Germany slipped back into recession in Q3 due to weak exports and industrial production.
• The U.K.'s National Institute of Economic and Social Research believes that Chancellor Reeves should break her promise to not raise taxes in the Autumn budget.

In economic data:

• Italy's August Industrial Production -2.4% m/m (expected -0.3%; last 0.4%); -2.7% yr/yr (expected 0.5%; last 0.9%)
• Swiss September SECO Consumer Climate -37 (expected -38; last -40)