Stock Market Update

The stock market is on track for a flat start with futures on the S&P 500 trading just above fair value.

Yesterday's session saw the major averages deepen their retreat from record highs, though the backtracking only sent the S&P 500 back to levels from the middle of last week.

The overnight newsflow featured some updates to the tariff landscape, as President Trump announced a few new tariffs that will be coming into effect on October 1. This includes a 100% tariff for imported branded and generic pharmaceuticals if no plant being built in U.S, a 25% tariff for heavy trucks, a 50% tariff for kitchen cabinets, bathroom vanities, and associated products, and a 30% tariff for upholstered furniture.

Separately, President Trump signed the deal to buy TikTok from ByteDance at a valuation of about $14 bln.

Today's session will feature the Personal Income/Outlays report for August, which will influence the market's rate cut expectations. The fed funds futures market currently expects two more cuts to be made by the end of the year.

Treasuries are little changed with the 10-yr yield at 4.17%.

In corporate news:

• Costco (COST 943.31): company beat Q4 EPS expectations.
• Concentrix (CNXC 43.50, -11.49, -20.89%): company missed Q3 EPS expectations, issued below-consensus EPS guidance for Q4, and increased its quarterly dividend.
• Crinetics Pharmaceuticals (CRNX 39.32, +3.43, +9.56%): company's acromegaly treatment received FDA approval.

Reviewing overnight developments:

• Asian markets ended lower. Japan's Nikkei -0.9%, Hong Kong's Hang Seng -1.4%, China's Shanghai Composite -0.7%.
  • In economic data:
    • Japan's September Tokyo CPI 2.5% yr/yr (prior 2.5%) and Tokyo Core CPI 2.5% yr/yr (expected 2.8%; prior 2.5%)
    • South Korea's September Manufacturing BSI Index 70 (prior 70)
    • Singapore's August Industrial Production -9.7% m/m (expected -4.6%; prior 8.8%) and -7.8% yr/yr (expected -2.5%; prior 7.7%)
  • In news:
    • President Trump signed an Executive Order saving TikTok from being banned in the U.S. after an apparent deal for its "qualified divestiture" was struck between the U.S. and China that will leave TikTok majority-owned by U.S. investors.
• Major European indices trade in the green. Germany's DAX +0.6%, U.K.'s FTSE +0.5%, France's CAC +0.7%.
  • In economic data:
    • Spain's Q2 GDP 0.8% q/q (expected 0.7%; prior 0.6%) and 3.1% yr/yr (expected 2.8%; prior 3.2%)
    • Italy's September Consumer Confidence 96.8 (expected 96.5; prior 96.2); September Business Confidence 87.3 (expected 87.5; prior 87.3)
  • In news:
    • European Central Bank policymaker Cipollone said that the central bank will act if inflation deviates from target significantly.