Stock Market Update

The stock market remains on track for a firmly higher open, with the S&P 500 futures currently trading 30 points above fair value. 

Asian markets finished higher on Tuesday, extending the technology-led momentum from Wall Street while softer oil prices helped offset pressure from elevated global bond yields. Japan's Nikkei 225 gained 1.1% to a three-month high, led by Taiyo Yuden (+6.2%), Fujikura (+5.2%), Advantest (+3.9%), Murata Manufacturing (+1.0%), and Lasertec (+0.8%). Lower crude prices provided additional support for Japan's import-dependent economy, while investors continued to monitor Prime Minister Sanae Takaichi's expansionary fiscal agenda amid a weak yen and rising domestic bond yields. Hong Kong's Hang Seng Index climbed 1.0%, with Z.AI (+7.6%), Genscript Biotech (+7.7%), Wuxi Biologics (+4.5%), Xiaomi (+1.6%), and Tencent (+1.2%) benefiting from renewed buying in technology and biotech shares. Brent crude near $100 provided some relief from the energy-driven inflation pressures that have weighed on global markets, while the yield on Japan's latest 10-year government bond auction rose to 3.101% from 2.995% previously. China's Shanghai Composite remained closed for the National Day holiday.

• In economic data:
  • India's September HSBC Services PMI rose to 55.2 from 54.1, below the 55.8 consensus.
  • India's September HSBC Composite PMI rose to 55.9 from 54.3, below the 56.5 consensus.
  • Australia's October Westpac Consumer Sentiment fell 4.7% after declining 5.2% previously.
  • Australia's September ANZ Job Advertisements increased 2.2% m/m after rising 2.6% previously.
  • Hong Kong's September S&P Global Manufacturing PMI slipped to 49.2 from 49.5.

European markets trade higher, tracking strength in global equities as easing oil prices provide additional support for sentiment. Germany's DAX gains 0.6% despite factory orders plunging 10.6% m/m in August, well below expectations for a 0.9% decline, with Merck (+4%), Qiagen (+3%), and Henkel (+2%) among the leading gainers. France's CAC 40 rises 0.3%, rebounding from Monday's decline even as concerns over the country's fiscal position persist, with EssilorLuxottica (+2%), STMicroelectronics (+2%), and Safran (+2%) outperforming. London's FTSE 100 advances 0.3%, led by healthcare shares as AstraZeneca (+3%) rallies after announcing more than $1 bln of investment in Massachusetts, while GSK (+1.5%) also gains. Eurozone retail sales rise just 0.1% m/m in August, slightly below expectations, while French industrial production unexpectedly declines 0.3%. Concerns surrounding France remain a broader headwind after the budget deficit widened to EUR159.6 bln through August, while the government seeks to reassure markets with its 2027 budget.

• In economic data:
  • Eurozone August retail sales increased 0.1% m/m and 0.8% yr/yr, below respective expectations of 0.2% and 1.0%; the prior readings were -0.6% and 0.4%.
  • Eurozone September HCOB Construction PMI rose to 43.4 from 43.0.
  • Germany's August factory orders fell 10.6% m/m, well below the -0.9% consensus, after increasing 3.2% previously.
  • Germany's September HCOB Construction PMI fell to 43.5 from 48.7.
  • France's August industrial production fell 0.3% m/m, below the 0.2% consensus, after declining 0.6% previously.
  • France's government budget balance widened to -EUR159.6 bln from -EUR145.9 bln.
  • France's September HCOB Construction PMI rose to 39.8 from 37.3.
  • The U.K.'s September S&P Global Construction PMI rose to 46.1 from 44.3, above the 45.0 consensus.
  • Italy's September HCOB Construction PMI rose to 46.5 from 41.7.
  • Spain's August industrial production increased 1.5% yr/yr after rising 2.5% previously.