Stock Market Update

Equity futures point to a flattish open after yesterday's action saw the Nasdaq Composite capture record intraday and closing highs and the S&P 500 notch a record close. 

Mega-cap names and semiconductors led the advance, while pockets of weakness in the broader market saw the DJIA close beneath its flatline. 

Macro headlines are once again quiet this morning amid the ongoing government shutdown and ensuing economic data blackout. The Wall Street Journal reports that President Trump has signaled an openness to strike a healthcare deal with Democrats to end the shutdown, with Democrats reportedly willing to come to the table as well. 

Nonetheless, the market has paid little mind to the shutdown so far as it furthers its push into record territory. 

    In corporate news: 

• Constellation Brands (STZ 143.51, +4.80, +3.5%) beat EPS expectations by $0.25, beat revenue expectations, and reaffirmed its FY26 EPS guidance. 
• Major banks are competing for the proposed upcoming Fannie (FNMA) and Freddie (FMCC) IPO, according to The Wall Street Journal.
• IBM (IBM 303.50, +14.08, +4.9%) and Anthropic partner to advance enterprise software development with proven security and governance. 
• McCormick & Company (MKC 68.26, -0.03, -0.0%) beat EPS expectation by $0.03, reported revenues in-line, guided FY25 EPS in-line, and reaffirmed FY25 revenue guidance. 
• Tesla (TSLA 449.75, -3.50, -0.8%) plans to introduce a less expensive version of its Model Y today, according to Bloomberg. 

Reviewing overnight developments:

Equity indices in the Asia-Pacific region ended Tuesday on a mostly higher note while markets in China, Hong Kong, and South Korea were closed for holidays. Japan's Nikkei: UNCH, Hong Kong's Hang Seng: HOLIDAY, China's Shanghai Composite: HOLIDAY, India's Sensex: +0.2%, South Korea's Kospi: HOLIDAY, Australia's ASX All Ordinaries: -0.3%.

In news: 

• Japan's Nikkei hit another record high before giving back its gain.
• Expectations for an October rate hike from the Bank of Japan fell to 23.5% while the implied likelihood of a December hike remains just above 50%, hovering around 56%, down sharply from 76.5% on Friday.
• It is still unclear which parties will comprise Japan's new government amid reports that the current coalition partner, Komeito, may not want to continue working with LDP.

In economic data: 

• Japan's August Household Spending 0.6% m/m (expected 0.1%; last 1.7%); 2.3% yr/yr (expected 1.4%; last 1.4%). August Leading Index 107.4 (expected 107.1; last 106.1) and Coincident Indicator -0.7% m/m (last 0.3%)
• Australia's October Westpac Consumer Sentiment -3.5% (last -3.1%). September ANZ Job Advertisements -3.3% m/m (last -0.3%)
• New Zealand's Q3 NZIER Business Confidence 18% (last 22%)

Major European indices trade near their flat lines. STOXX Europe 600: +0.1%, Germany's DAX: +0.1%, U.K.'s FTSE 100: +0.2%, France's CAC 40: +0.3%, Italy's FTSE MIB: +0.4%, Spain's IBEX 35: +0.1%.

In news: 

• Germany's Factory Orders (-0.8%; expected 1.2%) contracted in August against expectations for growth, reflecting ongoing sluggishness.
• There are growing signs that French President Macron will have to dissolve the National Assembly, resulting in new elections. For now, outgoing Prime Minister Lecornu has been given another 48 hours to try forming a government.

In economic data: 

• Germany's August Factory Orders -0.8% m/m (expected 1.2%; last -2.7%)
• U.K.'s September Halifax House Price Index -0.3% m/m (expected 0.2%; last 0.2%); 1.3% yr/yr (expected 2.2%; last 2.0%)
• France's August trade deficit EUR5.5 bln (expected deficit of EUR5.2 bln; last deficit of EUR5.7 bln)