Stock Market Update

Equity futures point to a slightly lower open this morning after yesterday's earnings-heavy action led the DJIA to record highs while the S&P 500 and Nasdaq Composite closed near their flat lines. 

Investors are perusing another sizable batch of earnings reports this morning, which is set to be another driver of price action. Netflix (NFLX 1,152.00, -89.35, -7.2%) trades lower in the pre-market after missing EPS expectations yesterday evening. 

Outside of the earnings buzz, the market is relatively devoid of directional catalysts. 

Precious metals faced a sharp pullback yesterday, but this was to be expected given the record-setting run that has transpired recently. 

On the trade front, the market hit some shakiness yesterday after President Trump said that a meeting with Chinese President Xi "might not happen," but in the same address said that the meeting would likely yield "a good deal." 

In geopolitical news, The New York Times reports that President Trump will no longer meet with Russian President Putin, as it would be a "waste of time" since the Kremlin does not want to negotiate an immediate ceasefire with Ukraine. 

The MBA Mortgage Applications Index for the week ended October 18 decreased 0.3%, from a prior decrease of 1.8%. 

In corporate news:

• Alphabet (GOOG 256.27, +4.93, +2.0%) and Anthropic are in discussions for a cloud deal worth billions of dollars, according to Bloomberg. 
• Netflix (NFLX 1,152.00, -89.35, -7.2%) missed EPS expectations by $1.09, reported revenues in-line, and guided Q4 EPS and revenues above consensus. The company's operating margin came in at 28.2% vs 31.5% prior guidance due to an expense related to an ongoing dispute with Brazilian tax authorities that was not in its forecast. Absent this expense, the company would have exceeded guidance.
• Texas Instruments (TXN 166.50, -14.34, -7.9%) missed EPS expectations by $0.01, beat revenue expectations, and guided Q4 EPS below consensus with revenues in-line. 
• Thermo Fisher (TMO 532.00, -25.99, -4.7%) beat EPS expectations by $0.29 and beat revenue expectations. 

Reviewing overnight developments:

Equity indices in the Asia-Pacific region ended the midweek session on a mostly lower note while markets in India were closed for a holiday. Japan's Nikkei: UNCH, Hong Kong's Hang Seng: -0.9%, China's Shanghai Composite: -0.1%, India's Sensex: HOLIDAY, South Korea's Kospi: +0.2%, Australia's ASX All Ordinaries: -0.7%.

In news:

• Japan's Prime Minister Takaichi is planning to propose a stimulus package that is larger than last year's to offset the impact of inflation.
• President Trump will meet with the new prime minister in Japan early next week.
• Separately, President Trump said that he might not meet with China's President Xi in South Korea after all.

In economic data:

• Japan's September trade deficit JPY234.6 bln (expected surplus of JPY22.0 bln; last deficit of JPY242.8 bln). September Imports 3.3% yr/yr (expected 0.6%; last -5.2%) and Exports 4.2% yr/yr (expected 4.6%; last -0.1%)
• South Korea's September PPI 0.4% m/m (last -0.1%); 1.2% yr/yr (last 0.6%)

Major European indices are mixed. The U.K.'s inflation rate remained at 3.8% yr/yr in September against worries about an acceleration. STOXX Europe 600: +0.1%, Germany's DAX: -0.2%, U.K.'s FTSE 100: +0.9%, France's CAC 40: -0.3%, Italy's FTSE MIB: -0.5%, Spain's IBEX 35: +0.4.

In news:

• The U.K.'s inflation rate remained at 3.8% yr/yr in September against worries about an acceleration. Still, CPI remains well above the Bank of England's target leading into next month's Autumn budget statement.
• Barclays and Unicredit reported above-consensus results for the quarter.

In economic data:

• U.K.'s September CPI 0.0% m/m (last 0.3%); 3.8% yr/yr (expected 4.0%; last 3.8%). September Core CPI 0.0% m/m (expected 0.2%; last 0.3%); 3.5% yr/yr (expected 3.7%; last 3.6%). September Input PPI -0.1% m/m (expected 0.3%; last 1.1%) and Output PPI 0.0% m/m (expected 0.2%; last 0.6%). September House Price Index 3.0% yr/yr (expected 2.5%; last 2.8%)