Stock Market Update

Equity futures remain on track for a lower open, with the S&P 500 futures currently trading 21 points below fair value.

Asian markets finished mostly lower on Thursday as renewed concerns surrounding AI spending and valuations pressured technology shares, although strength in Advantest helped Japan buck the regional weakness. Japan's Nikkei 225 gained 1.1% for a third consecutive advance, with Advantest (+6%) rallying after raising its full-year earnings forecast on stronger AI chip-testing demand, while Tokyo Electron (+2%), Ibiden (+2%), and Kioxia (+1%) also advanced. China's Shanghai Composite fell 0.8% and the Shenzhen Component sank 2.9%, with Eoptolink Technology (-11%), Zhongji Innolight (-9%), and Cambricon Technologies (-5%) reversing part of Wednesday's AI-fueled rebound as strong industry results struggled to satisfy elevated expectations. Hong Kong's Hang Seng lost 0.6%, with Z.AI (-7%), Lenovo (-7%), SMIC (-6%), Meituan (-3%), and Tencent (-3%) caught in the broader technology selloff, while the Hong Kong Monetary Authority left its base rate unchanged at 4.25% following the Federal Reserve's decision to hold rates steady. South Korea's KOSPI fell 1.2%, giving back part of Wednesday's 6.6% surge as Samsung Electronics slipped 1% despite record overall earnings, while SK Hynix (+4%) extended its advance after announcing plans for increased shareholder returns. The divergence between Samsung and SK Hynix adds another layer to the region's increasingly selective AI trade, with investors now weighing not only demand and earnings growth but also capital intensity, valuations, and how those profits ultimately reach shareholders. India's Sensex climbed 1.2%, standing out alongside Japan as most other major regional markets retreated. Attention now turns to Friday's Bank of Japan policy decision after Japanese household confidence softened to 35.0 in October.

• In economic data:
  • South Korea's October Manufacturing BSI Index fell to 78 from 79.
  • Japan's October Household Confidence fell to 35.0 (expected 35.1; prior 35.4).
  • Foreign investment in Japanese stocks totaled JPY1,180.9 bln (prior -JPY67.5 bln).
  • Japan's foreign bond buying totaled -JPY92.6 bln (prior -JPY160.5 bln).
  • Australia's Q3 Import Price Index fell 1.1% q/q (expected +1.3%; prior +5.7%).
  • Australia's Q3 Export Price Index rose 1.4% q/q (prior +1.1%).
  • New Zealand's October ANZ Business Confidence rose to 52.5 from 51.9.
  • New Zealand's October ANZ Own Activity reading fell to 46.2% from 47.9%.

European markets trade mostly higher on Thursday as investors respond to another heavy slate of corporate earnings while awaiting the European Central Bank's policy decision following President Christine Lagarde's surprise resignation announcement. Germany's DAX gains 1.0% and reaches its highest level since early September, with Adidas (+4%) advancing after reporting record profits and raising its outlook, while Airbus (+3%), Deutsche Telekom (+3%), and Henkel (+2%) also gain. France's CAC 40 rises 1.0%, with Renault (+4%) climbing on resilient third-quarter revenue and stronger electric-vehicle sales and TotalEnergies (+1%) advancing after beating earnings expectations, while STMicroelectronics (-1%) moves against the broader market. London's FTSE 100 gains 0.4%, with Shell (+3%) reaching a record high after increasing its quarterly share buyback to $5 bln, while Haleon (-11%) plunges after cutting its full-year revenue outlook and Lloyds (-3%) falls despite better-than-expected profit. The U.K.'s September credit data also point to softer borrowing activity, with mortgage approvals, mortgage lending, consumer credit, and net lending all falling short of expectations, while broader Eurozone confidence data remain mixed. The STOXX Europe 600 rises 0.5%, although Italy's FTSE MIB slips 0.1% and Spain's IBEX 35 falls 0.6%, highlighting a market being driven more by country and company-specific catalysts than a uniform regional risk-on move.

• In economic data:
  • The Eurozone's October Business and Consumer Survey fell to 96.9 (expected 97.5; prior 97.5).
  • The Eurozone's October Industrial Sentiment improved to -3.4 (expected -3.8; prior -3.9).
  • The Eurozone's October Services Sentiment fell to 5.3 (expected 5.9; prior 5.9).
  • The Eurozone's October Consumer Confidence fell to -17.9 (expected -17.9; prior -16.5).
  • U.K. September Mortgage Approvals fell to 53.44K (expected 54.00K; prior 54.81K).
  • U.K. September Mortgage Lending fell to GBP3.87 bln (expected GBP4.20 bln; prior GBP4.17 bln).
  • U.K. September Consumer Credit fell to GBP1.914 bln (expected GBP2.200 bln; prior GBP2.683 bln).
  • U.K. September Net Lending to Individuals fell to GBP5.800 bln (expected GBP6.200 bln; prior GBP6.874 bln).
  • Spain's September Retail Sales fell 1.4% yr/yr (prior -0.5%).
  • Italy's September Unemployment Rate rose to 6.3% (expected 6.2%; prior 6.2%).
  • Italy's October Business Confidence was unchanged at 91.9 (expected 92.0).
  • Italy's October Consumer Confidence fell to 90.3 (expected 90.9; prior 91.2).