Stock Index Futures Gain as Bond Yields Retreat, U.S. Economic Data on Tap

December S&P 500 E-Mini futures (ESZ24) are up +0.21%, and December Nasdaq 100 E-Mini futures (NQZ24) are up +0.22% this morning as Treasury yields fell for a second day, with investors looking ahead to a new batch of U.S. economic data and comments from a Federal Reserve official. 

In yesterday’s trading session, Wall Street’s major indexes ended mixed. Tesla (TSLA) soared nearly +22% and was the top percentage gainer on the S&P 500 and Nasdaq 100 after the electric vehicle maker reported stronger-than-expected Q3 adjusted EPS and said it expects “slight growth” in vehicle deliveries this year and a big jump in 2025. Also, United Parcel Service (UPS) gained more than +5% after the parcel delivery giant and economic bellwether posted upbeat Q3 results. In addition, Molina Healthcare (MOH) surged over +17% after reporting better-than-expected Q3 results. On the bearish side, Newmont (NEM) tumbled more than -14% and was the top percentage loser on the S&P 500 after the company reported downbeat Q3 results. Also, International Business Machines (IBM) slid over -6% and was the top percentage loser on the Dow after reporting weaker-than-expected Q3 revenue.

Economic data released on Thursday showed that the U.S. S&P Global manufacturing PMI edged up to 47.8 in October, stronger than expectations of 47.5. Also, the U.S. October S&P Global services PMI unexpectedly rose to 55.3, better than expectations of 55.0. In addition, U.S. new home sales rose +4.1% m/m to a 16-month high of 738K in September, stronger than expectations of 719K. Finally, the number of Americans filing for initial jobless claims in the past week unexpectedly fell by -15K to 227K, compared with the 243K expected.

“Goldilocks data that’s in-line with expectations (so not too good or too bad) is the best outcome for a continued rebound in stocks and bonds,” said Tom Essaye at The Sevens Report.

Meanwhile, U.S. rate futures have priced in a 95.0% chance of a 25 basis point rate cut and a 5.0% chance of no rate change at November’s monetary policy meeting.

On the earnings front, notable companies like Colgate-Palmolive (CL) and HCA Healthcare (HCA) are set to report their quarterly figures today. According to Bloomberg Intelligence, companies in the S&P 500 are expected to post an average +4.3% increase in quarterly earnings for Q3 compared to the previous year, down from +7.9% growth projected in mid-July.

On the economic data front, all eyes are focused on U.S. Durable Goods Orders data, which is set to be released in a couple of hours. Economists, on average, forecast that September durable goods orders will come in at -1.1% m/m, compared to 0.0% m/m in August.

Also, investors will focus on U.S. Core Durable Goods Orders data, which stood at +0.5% m/m in August. Economists foresee the September figure to be -0.1% m/m.

The University of Michigan’s U.S. Consumer Sentiment Index will be reported today as well. Economists estimate this figure to arrive at 68.9 in October, compared to 70.1 in September.

In addition, market participants will be anticipating a speech from Boston Fed President Susan Collins.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.195%, down -0.14%.

The Euro Stoxx 50 futures are down -0.02% this morning as investors parsed the latest raft of corporate earnings reports. Automobile and construction stocks led the declines on Friday. A survey showed on Friday that German business sentiment improved more than expected in October. Separately, a monthly survey conducted by the European Central Bank in September, involving 19,000 Eurozone consumers, revealed that prices are expected to increase by 2.4% over the next 12 months, down from 2.7% in August and the lowest level of expected inflation since September 2021. Meanwhile, European Central Bank Governing Council member Martins Kazaks stated on Friday that the ECB may need to ease policy more quickly than previously anticipated, though interest rates do not need to be lowered to a level that would stimulate economic growth. In corporate news, Mercedes-Benz Group Ag (MBG.D.DX) fell over -1% after the carmaker reported weaker-than-expected Q3 operating profit in its core car division. Also, Valeo (FR.FP) plunged more than -10% after cutting its full-year revenue guidance for the second time this year. At the same time, Natwest Group Plc (NWG.LN) climbed over +4% after the lender reported an increase in Q3 operating profit before tax.

Germany’s Ifo Business Climate Index, Germany’s Business Expectations, and Germany’s Current Assessment data were released today.

The German October Ifo Business Climate Index has been reported at 86.5, stronger than expectations of 85.6.

The German October Business Expectations arrived at 87.3, stronger than expectations of 86.8.

The German October Current Assessment stood at 85.7, stronger than expectations of 84.4.

Asian stock markets today settled mixed. China’s Shanghai Composite Index (SHCOMP) closed up +0.59%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -0.60%.

China’s Shanghai Composite Index closed higher today, posting its second consecutive weekly gain, as investors continued to evaluate the effects of the latest stimulus measures on the economy and markets while awaiting details of Beijing’s fiscal stimulus. Solar and pharmaceutical stocks led the gains on Friday. In a positive sign for the economy, residential presales in 30 key Chinese cities increased by 22% last week compared to the previous seven-day period, which had a high base, according to financial data provider Wind. Meanwhile, the People’s Bank of China kept a key policy rate unchanged in October, a widely expected move after last month’s record funding cost cuts, indicating that authorities are carefully pacing monetary stimulus to bolster the economy. On Friday, the PBOC injected 700 billion yuan of liquidity into the country’s banking system through its one-year medium-term lending facility at an unchanged rate of 2.0%. In corporate news, Xinyi Solar Holdings soared about +17% in Hong Kong amid expectations that China will address overcapacity in the industry and the U.S. will reduce tariffs on certain imported photovoltaic products. Investors are anticipating a meeting of the standing committee of the National People’s Congress in the coming weeks, which is expected to approve the government budget for additional borrowing and sovereign bond sales.

Japan’s Nikkei 225 Stock Index closed lower today as investors braced for the nation’s general election. The benchmark index posted its second consecutive weekly decline. Bank and automobile stocks weighed on the index on Friday. Data released by Statistics of Japan on Friday showed that core inflation in Japan’s capital in October fell below the Bank of Japan’s 2% inflation target for the first time in five months, which may make it more challenging for the central bank to pursue further rate increases. Separately, data from the Cabinet Office showed that Japan’s leading economic index, which is used to gauge the economic outlook for a few months ahead on data such as job offers and consumer sentiment, was revised higher in August. Meanwhile, the yen remained range-bound against the dollar ahead of the weekend’s election, which could result in Japan’s ruling coalition losing its majority in the lower house of parliament for the first time since 2009. Such an outcome would undermine the yen and Japanese stocks, strategists say. At the same time, BOJ Governor Kazuo Ueda indicated on Thursday that the central bank won’t raise interest rates next week, with nearly all BOJ watchers already anticipating no policy change this month. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed up +15.61% to 32.14.

The Japanese October Tokyo Core CPI has been reported at +1.8% y/y, stronger than expectations of +1.7% y/y.

The Japanese September Corporate Services Price Index came in at +2.6% y/y, weaker than expectations of +2.7% y/y.

The Japanese August Leading Index was at 106.9, stronger than expectations of 106.7.

Pre-Market U.S. Stock Movers

Deckers Outdoor (DECK) surged over +13% in pre-market trading after the company reported stronger-than-expected Q2 results and raised its full-year revenue growth forecast.

Western Digital (WDC) climbed more than +11% in pre-market trading after reporting better-than-expected Q1 adjusted EPS.

Capri Holdings (CPRI) plummeted about -47% in pre-market trading after a federal judge blocked its $8.5 billion sale to Tapestry.

Coursera (COUR) tumbled more than -18% in pre-market trading after the company cut its annual revenue guidance.

Apple (AAPL) fell nearly -1% in pre-market trading after KeyBanc downgraded the stock to Underweight from Sector Weight with a $200 price target.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Friday - October 25th

HCA Healthcare (HCA), Colgate-Palmolive (CL), Natwest Group (NWG), Centene (CNC), Booz Allen Hamilton (BAH), Avantor (AVTR),  Saia (SAIA), Gentex (GNTX), AutoNation (AN), Balchem (BCPC), Portland General Electric (POR), NewYork Community Bancorp (NYCB), Piper Sandler (PIPR), Trinet Grou (TNET), Sensient Technologies (SXT), First Hawaiian (FHB), Newell Brands (NWL), Barnes (B), Carter’s (CRI), Lakeland Financial (LKFN), WisdomTree (WT), Virtus (VRTS), Stellar Bancorp (STEL), Gorman-Rupp (GRC).

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