Stock Market Update

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

Equity indices in the Asia-Pacific region ended Wednesday on a lower note while markets in China and South Korea were closed for holidays. China's markets will reopen tomorrow while South Korea will be closed for one more day. Japan's real cash earnings were down for the eighth consecutive month in August, fueling speculation about a more gradual rate hike path. Reports related to Golden Week activity in China suggest that a lot of travel took place, but spending was restrained. The Reserve Bank of New Zealand lowered its official cash rate by 50 basis points to 2.50% against expectations for a 25-basis point cut. The new rate is slightly below the previously anticipated terminal rate of 2.55%.

• In economic data:
  • Japan's October Reuters Tankan Index 8 (last 13). August Overall Wage Income 1.5% yr/yr (expected 2.6%; last 3.4%). August Current Account surplus JPY2.46 trln (expected surplus of JPY2.45 trln; last surplus of JPY1.88 trln). September Economy Watcher Current Index 47.1 (expected 47.0; last 46.7)
  • Australia's August Building Approvals -6.0% m/m, as expected (last -8.2%) and Private House Approvals -2.6% m/m, as expected (last 1.1%)

---Equity Markets---

• Japan's Nikkei: -0.5%
• Hong Kong's Hang Seng: -0.5%
• China's Shanghai Composite: HOLIDAY
• India's Sensex: -0.2%
• South Korea's Kospi: HOLIDAY
• Australia's ASX All Ordinaries: -0.1%

Major European indices trade in the green. There is a growing concern that France will miss its deadline for submitting a 2026 budget due to the ongoing political paralysis. Germany reported a sharp drop in its Industrial Production for August (-4.3% m/m) after reporting an unexpected drop in Factory Orders yesterday (-0.8% m/m), underscoring the weak nature of the country's economic recovery. BMW lowered its outlook for the year due to weakness in China. European Central Bank policymakers Nagel, Rehn, and Escriva spoke about inflation being essentially on target at this time.

• In economic data:
  • Germany's August Industrial Production -4.3% m/m (expected -1.0%; last 1.3%); -4.2% yr/yr (last 1.5%)

---Equity Markets---

• STOXX Europe 600: +0.7%
• Germany's DAX: +0.8%
• U.K.'s FTSE 100: +0.9%
• France's CAC 40: +0.9%
• Italy's FTSE MIB: +0.8%
• Spain's IBEX 35: +0.7%