Stock Market Update

The S&P 500 futures currently trade five points above fair value. 

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 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%)

---Equity Markets---

• 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%

Major European indices trade near their flat lines while Italy's MIB (+0.6%) outperforms with banks contributing to the strength. 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)

---Equity Markets---

• STOXX Europe 600: +0.1%
• Germany's DAX: +0.1%
• U.K.'s FTSE 100: +0.2%
• France's CAC 40: +0.2%
• Italy's FTSE MIB: +0.3%
• Spain's IBEX 35: +0.1%