Stock Market Update

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

Equity indices in the Asia-Pacific region were mostly higher Thursday, including China's Shanghai Composite (+1.3%), which reopened following the Golden Week holiday. The latter reportedly resulted in an 11.5% yr/yr increase in cross-border trips, albeit with some generally conservative spending activity. China's Ministry of Commerce, meanwhile, made a splash after the holiday with an announcement that it is tightening its own export restrictions on rare earth materials for high-tech products and military applications. Japan, for its part, continued in rally mode, with investors relishing the prospect of more accommodative fiscal and monetary policy under Takaishi's leadership and a well-received 5-yr JGB auction. USD/JPY topped 153.00 overnight, spurring more speculation about the possibility of MOF intervention soon. Separately, HSBC made a bid to take Hang Seng Bank private for HK$155.00 per share, and the Philippines central bank unexpectedly cut its base interest rate by 25 bps to 4.75% versus an expectation for no change.

• In economic data:
  • Japan's September Machine Tool Orders 9.9% yr/yr (prior 8.5%)
  • Australia's October Consumer Inflation Expectation 4.8% (prior 4.7%)

---Equity Markets---

• Japan's Nikkei: +1.8%
• Hong Kong's Hang Seng: -0.3%
• China's Shanghai Composite: +1.3%
• India's Sensex: +0.5%
• South Korea's Kospi: HOLIDAY
• Australia's ASX All Ordinaries: +0.3%

Major European indices are mixed in Thursday's trading, with Germany (+0.4%) and France (+0.4%) outperforming. President Macron is expected to name a new prime minister before the weekend. The U.K.'s FTSE 100 has been weighed down by Lloyds Banking Group, which warned it may face an additional provision that is material for the car finance scandal, according to The Guardian, weakness in HSBC after its bid for Hang Seng Bank, and Bank of England policymaker Mann making a case for policy to remain restrictive due to inflation concerns. Germany reported a decline in both exports and imports for August.

• In economic data:
  • Germany's August Trade Balance EUR17.2 bln (expected EUR15.1 bln; prior EUR14.7 bln), with exports -0.5% m/m (expected 0.3%; prior -0.6%) and imports -1.3% m/m (expected -0.5%; prior -0.1%)

---Equity Markets---

• STOXX Europe 600: -0.1%
• Germany's DAX: +0.4%
• U.K.'s FTSE 100: -0.3%
• France's CAC 40: +0.4%
• Italy's FTSE MIB: -1.1%
• Spain's IBEX 35: -0.6%