December S&P 500 E-Mini futures (ESZ24) are down -0.13%, and December Nasdaq 100 E-Mini futures (NQZ24) are up +0.06% this morning as investors awaited the latest reading on U.S. job openings, comments from Federal Reserve officials, and an earnings report from the world’s largest shoemaker Nike.
In yesterday’s trading session, Wall Street’s major indexes ended in the green. Apple (AAPL) rose over +2% and was the top percentage gainer on the Dow after JPMorgan Chase noted that lead times for the latest iPhone indicate that initially slower demand for Pro models was “starting to correct.” Also, CVS Health (CVS) gained more than +2% after the Wall Street Journal reported that hedge fund Glenview Capital Management is scheduled to meet with CVS Health’s top executives to suggest operational improvements. In addition, FedEx (FDX) advanced over +2%, and United Parcel Service (UPS) rose more than +1% after Stifel stated that the companies are the “most obvious beneficiaries” of extended disruption due to an impending port workers’ strike. On the bearish side, Boeing (BA) fell over -2% and was the top percentage loser on the Dow after the machinists union announced that negotiations to resolve the strike with the company had collapsed, with no further talks scheduled. Also, chip stocks came under pressure as Treasury yields climbed, with Micron Technology (MU) slumping more than -3% and On Semiconductor (ON) falling over -2%.
Economic data released on Monday showed that the Chicago PMI unexpectedly edged up to 46.6 in September, stronger than expectations of 46.1.
Fed Chair Jerome Powell said Monday that the central bank will reduce interest rates “over time” while reiterating that the overall economy continues to be on solid footing. Powell also reaffirmed his belief that inflation will keep moving toward the central bank’s 2% target, adding that current economic conditions “set the table” for a continued easing of price pressures. At the same time, he noted that the U.S. did not yet have the data necessary to make a decision regarding the November meeting. Also, Atlanta Fed President Raphael Bostic stated he would be open to another half-percentage-point interest rate cut at the November meeting if forthcoming data indicate job growth is slowing more rapidly than anticipated. “A surprise to the weak side .... would pull me much further into really needing another dramatic move,” Bostic said in an interview with Reuters.
Meanwhile, U.S. rate futures have priced in a 64.7% chance of a 25 basis point rate cut and a 35.3% chance of a 50 basis point rate cut at the conclusion of the Fed’s November meeting.
On the earnings front, notable companies like Nike (NKE), Paychex (PAYX), and McCormick & Co. (MKC) are set to report their quarterly figures today.
On the economic data front, all eyes are focused on the U.S. JOLTs Job Openings data, which is set to be released in a couple of hours. Economists, on average, forecast that the August JOLTs Job Openings will stand at 7.640M, compared to July’s figure of 7.673M.
Also, investors will focus on the U.S. ISM Manufacturing PMI, which stood at 47.2 in August. Economists foresee the September figure to be 47.6.
The U.S. S&P Global Manufacturing PMI will come in today. Economists expect September’s figure to be 47.0, compared to 47.9 in August.
U.S. Construction Spending data will be reported today as well. Economists foresee this figure to stand at +0.2% m/m in August, compared to the previous number of -0.3% m/m.
In addition, market participants will be looking toward speeches from Atlanta Fed President Raphael Bostic, Fed Governor Lisa Cook, Boston Fed President Susan Collins, and Richmond Fed President Thomas Barkin.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 3.750%, down -1.57%.
The Euro Stoxx 50 futures are up +0.04% this morning as investors digested remarks from a European Central Bank official as well as key economic data from the region. Technology stocks advanced on Tuesday, while luxury and energy stocks lost ground. A survey released on Tuesday indicated that manufacturing activity across the Eurozone fell at its quickest rate this year in September as demand sharply decreased, even though factories reduced their prices. Separately, preliminary data from Eurostat showed that the Eurozone’s annual inflation rate dropped below the ECB’s target in September for the first time in over three years. Meanwhile, ECB policymaker Olli Rehn stated on Tuesday that the inflation rate in the euro area is expected to stabilize at the central bank’s 2% target throughout 2025. “The direction of monetary policy is clear: interest rate cuts have begun and our monetary policy stance is becoming less restrictive,” Rehn said. Also, ECB President Christine Lagarde said on Monday that the central bank is growing more optimistic about bringing inflation under control and will consider this in its October interest rate decision. “Inflation might temporarily increase in the fourth quarter of this year as previous sharp falls in energy prices drop out of the annual rates, but the latest developments strengthen our confidence that inflation will return to target in a timely manner,” Lagarde said. Investor attention is now directed toward a speech from ECB Executive Board member Isabel Schnabel later today. In corporate news, Covestro Ag (1COV.D.DX) climbed over +5% after Abu Dhabi National Oil Company agreed to acquire the German chemicals producer for 14.7 billion euros ($16.4 billion).
Spain’s Manufacturing PMI, Italy’s Manufacturing PMI, France’s Manufacturing PMI, Germany’s Manufacturing PMI, Eurozone’s Manufacturing PMI, Eurozone’s CPI (preliminary), and Eurozone’s Core CPI (preliminary) data were released today.
The Spanish September Manufacturing PMI stood at 53.0, stronger than expectations of 50.2.
The Italian September Manufacturing PMI came in at 48.3, weaker than expectations of 49.0.
The French September Manufacturing PMI arrived at 44.6, stronger than expectations of 44.0.
The German September Manufacturing PMI stood at 40.6, stronger than expectations of 40.3.
Eurozone September Manufacturing PMI came in at 45.0, stronger than expectations of 44.8.
Eurozone September CPI has been reported at +1.8% y/y, in line with expectations.
Eurozone September Core CPI arrived at +2.7% y/y, in line with expectations.
Japan’s Nikkei 225 Stock Index (NIK) closed up +1.93%, while Chinese markets were closed for a holiday.
China’s Shanghai Composite Index was closed for the week-long National Day holidays. Mainland China’s financial markets will reopen on Tuesday, October 8th.
Japan’s Nikkei 225 Stock Index closed higher today, recovering some losses from the previous session’s heavy selloff, supported by a weaker yen. Japanese shares also tracked gains on Wall Street overnight. Defense stocks led the gains on Tuesday. Also, shares of trading houses continued to rise after Berkshire Hathaway hired banks for a potential yen bond offering. A private sector survey released on Tuesday showed that Japan’s factory activity contracted for the third straight month in September, with output and new orders shrinking amid a sluggish economy and tepid overseas demand. Separately, a Bank of Japan quarterly tankan corporate survey indicated that sentiment among large Japanese manufacturers remained unchanged during the three months to September, reflecting ongoing global economic uncertainties that have made them cautious about their business outlook. In addition, data from Statistics of Japan showed that Japan’s unemployment rate eased in August. Meanwhile, a summary of the BOJ’s September meeting released on Tuesday indicated that policymakers debated the necessity of being cautious about near-term interest rate hikes, with some expressing concern over unstable financial markets and the economic outlook in the U.S. Even an advocate for future rate hikes urged patience before acting, the summary revealed, signaling a dovish shift among the nine-member board that reduces the likelihood of a hike in October. In other news, Shigeru Ishiba was effectively confirmed as Japan’s new prime minister on Tuesday. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed down -12.33% to 24.75.
The Japanese September au Jibun Bank Japan Manufacturing PMI came in at 49.7, stronger than expectations of 49.6.
The Japanese Tankan Large Manufacturers Index has been reported at 13 in the third quarter, stronger than expectations of 12.
The Japanese Tankan Large Non-Manufacturers Index stood at 34 in the third quarter, stronger than expectations of 32.
The Japanese August Unemployment Rate was at 2.5%, stronger than expectations of 2.6%.
Pre-Market U.S. Stock Movers
ZIM Integrated Shipping (ZIM) slumped over -5% in pre-market trading after dockworkers initiated a strike, walking out of every major port on the U.S. East and Gulf coasts.
Boeing (BA) dropped more than -2% in pre-market trading after Bloomberg reported that the company aims to raise at least $10 billion through a share sale to replenish cash reserves depleted by an ongoing strike.
IGM Biosciences (IGMS) tumbled over -15% in pre-market trading after announcing a strategic shift, which includes immediate steps such as a reduction in workforce to minimize future spending on the research and clinical development of aplitabart and other oncology candidates.
CVS Health (CVS) rose more than +2% in pre-market trading after the Wall Street Journal reported that the board is undertaking a strategic review of options for the company, including a potential breakup, in response to shareholder activist pressure.
HP Inc. (HPQ) fell over -2% in pre-market trading after Citi downgraded the stock to Neutral from Buy.
Ford (F) gained more than +2% in pre-market trading after Goldman Sachs upgraded the stock to Buy from Neutral with a price target of $13.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Tuesday - October 1st
Nike (NKE), Paychex (PAYX), McCormick&Co (MKC), Lamb Weston Holdings (LW), Acuity Brands (AYI), Cal-Maine (CALM), United Natural Foods (UNFI), Resources Connection (RGP).
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