Stock Market Update

The stock market is on track for another higher opening after the S&P 500 and Nasdaq Composite finished higher yesterday with strong performances in the tech space, while pockets of weakness in the broader market saw the DJIA retreat to its flatline. 

Semiconductor names are poised for another strong session after Taiwan Semiconductor Manufacturing's (TSM 310.50, +5.79, +1.9%) reported strong bookings in its Q3 earnings report, offering an encouraging read-through for chipmaking trends. 

In macro developments, USA Today reports that when President Trump was asked if the recent situation with China could pull the U.S. into a sustained trade war, he replied, "We're in one now." The president also lauded tariffs as a way to combat threats from China, stating that the U.S. would be exposed without them.

The ongoing government shutdown continues to delay key data releases, though the market's expectations for further easing from the Fed remain steady. 

In corporate news:

• Taiwan Semiconductor Manufacturing (TSM 310.50, +5.79, +1.9%) beat EPS expectations by $0.29, beat revenue expectations, and guided Q4 revenues above consensus. 
• Travelers (TRV 254.00, -15.45, -5.7%) beat EPS expectations by $1.80 and beat revenue expectations. 
• United Airlines (UAL 102.77, -1.28, -1.2%) beat EPS expectations by $0.13, reported revenues in-line, and guided Q4 EPS above consensus. 

Reviewing overnight developments:

Equity indices in the Asia-Pacific region had a mostly higher showing on Thursday. Japan's Nikkei: +1.3%, Hong Kong's Hang Seng: -0.1%, China's Shanghai Composite: +0.1%, India's Sensex: +1.0%, South Korea's Kospi: +2.5%, Australia's ASX All Ordinaries: +0.8%. 

In news:

• There was some ongoing focus on the U.S.-China relationship after President Trump's recent comments brought the issue back to the forefront.
• President Trump acknowledged that the two sides are in a trade war, which made headlines.
• An agreement that South Korea will invest $350 bln in the U.S. as part of the trade is reportedly close to being reached.
• Australia's unemployment rate reached a four-year high in September.

In economic data: 

• Japan's August Core Machinery Orders -0.9% m/m (expected 0.4%; last -4.6%); 1.6% yr/yr (expected 4.8%; last 4.9%). August Tertiary Industry Activity -4.3 (last 1.2)
• Australia's September Employment Change 14,900 (expected 20,500; last -11,800) and Full Employment Change 8,700 (last -48,600). September Unemployment Rate 4.5% (expected 4.3%; last 4.3%) and Participation Rate 67.0% (expected 66.8%; last 66.9%)
• New Zealand's September FPI -0.4% m/m (last 0.3%)

Major European indices trade in mixed fashion. STOXX Europe 600: +0.4%, Germany's DAX: UNCH, U.K.'s FTSE 100: -0.2%, France's CAC 40: +0.8%, Italy's FTSE MIB: +0.5%, Spain's IBEX 35: -0.3%.

In news:

• The U.K. reported weak GDP growth for August, which boosted expectations for a December rate cut from the Bank of England, though the implied likelihood remains below 50%.
• French Prime Minister Lecornu survived a no-confidence motion by a slim margin, and he is expected to face another one.
• European Central Bank policymaker Muller said that rates are in a good place.

In economic data:

• Eurozone's August trade surplus EUR1.0 bln (expected surplus of EUR6.9 bln; last surplus of EUR12.7 bln)
• U.K.'s August GDP 0.1% m/m, as expected (last -0.1%); 1.3% yr/yr, as expected (last 1.5%). August Construction Output -0.3% m/m (expected -0.1%; last 0.0%); 1.0% yr/yr (last 1.8%). August Industrial Production 0.4% m/m (expected 0.2%; last 0.4%); -0.7% yr/yr (expected -0.6%; last -0.1%). August Manufacturing Production 0.7% m/m (expected 0.2%; last -1.1%); -0.8% yr/yr (expected -1.0%; last -0.1%). August trade deficit GBP21.18 bln (expected deficit of GBP21.80 bln; last deficit of GBP20.65 bln)
• Italy's September CPI -0.2% m/m, as expected (last 0.1%); 1.6% yr/yr, as expected (last 1.6%). August trade surplus EUR2.05 bln (expected surplus of EUR8.94 bln; last surplus of EUR7.83 bln)