Stock Market Update

Equity futures point to a lower opening this week after yesterday's broad-based retreat saw ten S&P 500 sectors close in negative territory. 

The financials sector fell the furthest after Zions Bancorp (ZION 48.70, +1.77, +3.8%) reported $50 million in charge-offs related to exposure to fraudulent loans, stoking credit quality concerns in the market across regional banks. 

Another better-than-expected batch of earnings reports from banking names and a handful of upgrades this morning has many names in the sector moving slightly higher in the pre-market, helping equity futures tied to the major averages rise off their overnight lows. 

Meanwhile, mega-cap tech and semiconductor names, which led the information technology sector to the only slight gain yesterday, are mostly lower in the pre-market. 

On the macro front, Fox Business released a clip of an interview with President Trump, in which he said high tariffs with China are not sustainable, he expects to meet with Chinese President Xi later this month, and he expects everything to be fine with China. 

China's Ministry of Commerce said that all license applications for civilian uses of rare earth elements will be approved and that there is no export ban in place.

In corporate news: 

• American Express (AXP 325.78, +2.66, +0.8%) beat EPS expectations by $0.14, beat revenue expectations, and raised the low end of its FY25 earnings and revenue guidance. 
• Fifth Third Bancorp (FITB 41.07, +0.71, +1.8%) beat EPS expectations by $0.05 and reported revenues in-line. 
• Micron (MU 199.50, -3.03, -1.5%) is aiming to exit the server chip business in China, according to Reuters.
• Zions Bancorp (ZION 48.70, +1.77, +3.8%) was upgraded to Outperform from Neutral at Robert W. Baird, tgt $65

Reviewing overnight developments:

Equity indices in the Asia-Pacific region ended the week on a mostly lower note while South Korea's Kospi bucked the trend, eking out a slight gain after setting another fresh record high. Japan's Nikkei: -1.4%, Hong Kong's Hang Seng: -2.5%, China's Shanghai Composite: -2.0%, India's Sensex: +0.6%, South Korea's Kospi: UNCH, Australia's ASX All Ordinaries: -0.9%.

In news:

• Japan's largest political parties agreed to hold a vote for prime minister on October 21.
• China's Ministry of Commerce said that all license applications for civilian uses of rare earth elements will be approved and that there is no export ban in place.

In economic data:

• South Korea's September Import Price Index 0.6% yr/yr (last -2.2%) and Export Price Index 2.2% yr/yr (last -1.1%). September Unemployment Rate 2.5% (last 2.6%)
• Singapore's September trade surplus SGD5.948 bln (last surplus of SGD4.99 bln)

Major European indices trade in the red with financials among the laggards amid the recent concern about the health of regional banks in the U.S. STOXX Europe 600: -1.4%, Germany's DAX: -1.8%, U.K.'s FTSE 100: -1.2%, France's CAC 40: -0.2%, Italy's FTSE MIB: -1.5%, Spain's IBEX 35: -0.5%.

In news:

• European Central Bank policymaker Scicluna said that there is no rush to make another rate cut.
• Consumer retailer Luxottica and tiremaker Continental trade firmly higher in reaction to their quarterly results.

In economic data:

• Eurozone's September CPI 0.1% m/m, as expected (last 0.3%); 2.2% yr/yr, as expected (last 2.0%). September Core CPI 0.1% m/m, as expected (last 0.3%); 2.4% yr/yr (expected 2.3%; last 2.3%)