Stock Market Update

S&P 500 futures point to a higher open as buy-the-dip interest in AI shares and stabilization in Treasury yields provide support.

Asian markets finished mixed on Monday, with better-than-expected Chinese economic data and continued bargain hunting in South Korea offset by persistent pressure on Japan's AI-linked shares. Japan's Nikkei 225 fell 0.6%, with Taiyo Yuden (-5%), Lasertec (-4%), Tokyo Electron (-3%), Ibiden (-3%), and SoftBank Group (-2%) extending recent losses amid concerns surrounding the returns on heavy AI infrastructure spending. China's Shanghai Composite gained 0.4% after third-quarter GDP expanded 4.5% yr/yr, slightly above expectations, while September industrial production accelerated to 5.5% and retail sales growth improved to 1.1%, although fixed asset investment remained deeply negative. South Korea's KOSPI rallied 1.8%, extending Friday's rebound with support from Samsung Biologics (+9%), LG Energy Solution (+7%), Kia (+5%), Hyundai Motor (+4%), and Samsung Electronics (+1%). The contrasting moves in Japan and South Korea suggest the regional rebound remains selective, with investors continuing to reassess AI valuations and competitive pressures in memory chips ahead of major U.S. technology earnings this week. Hong Kong's Hang Seng was closed for Chung Yeung Day.

• In economic data:
  • China's Q3 GDP increased 1.2% qtr/qtr (expected 1.1%; prior 0.9%) and 4.5% yr/yr (expected 4.4%; prior 4.3%).
  • China's September Industrial Production increased 5.5% yr/yr (expected 5.4%; prior 5.2%).
  • China's September Retail Sales increased 1.1% yr/yr (expected 0.5%; prior 0.4%).
  • China's September Fixed Asset Investment decreased 7.2% yr/yr (expected -7.3%; prior -7.2%).
  • China's September Unemployment Rate was 5.2% (expected 5.3%; prior 5.3%).
  • China's September House Prices decreased 2.8% yr/yr (prior -3.0%).
  • New Zealand's September Performance of Services Index was 50.9 (prior 51.0).
  • New Zealand's September Trade Balance showed a deficit of NZD1.971 bln (expected deficit of NZD775 mln; prior deficit of NZD1.536 bln), with exports of NZD6.47 bln (prior NZD6.48 bln) and imports of NZD8.44 bln (prior NZD8.02 bln).
  • Japan's August Tertiary Industry Activity Index was -4.10 (prior 0.70).

European markets trade broadly lower, led by France as weekend unrest intensifies concerns surrounding the country's political stability and strained public finances, pressuring French equities and government bonds. France's CAC 40 falls 1.4%, with BNP Paribas (-2%), Credit Agricole (-2%), Societe Generale (-2%), LVMH (-2%), and Airbus (-2%) among the notable decliners, while rising French bond yields relative to German Bunds signal an increasing risk premium on the country's debt. Germany's DAX declines 1.1%, with industrial and financial shares under pressure as Continental, Rheinmetall, Airbus, Vonovia, Commerzbank, and Deutsche Bank fall between 1% and 3%. London's FTSE 100 drops 1.0%, led lower by banks and defense shares, including Barclays (-2%), HSBC (-1%), NatWest (-2%), Rolls-Royce (-2%), and BAE Systems (-3%), although Shell (+1%) and BP (+1%) provide some support. Political and social tensions are weighing more broadly across the region, with Italy's FTSE MIB falling 1.5% and Spain's IBEX 35 dropping 1.5%. The STOXX Europe 600 trades 0.8% lower as investors also look ahead to a busy week of corporate earnings.

• In economic data:
  • The U.K.'s October Rightmove House Price Index increased 1.0% m/m (prior +0.7%) and decreased 0.1% yr/yr (prior -0.8%).