OVERNIGHT MARKETS AND NEWS

December E-mini S&Ps (ESZ15 -0.07%) are down -0.04% and European stocks are down -0.20% ahead of Apple quarterly earnings and before the FOMC begins its 2-day policy meeting. With nearly no chance of a Fed rate hike priced into this month’s FOMC meeting, the markets will look to Wednesday’s post-FOMC meeting statement to gauge the Fed’s assessment of the economy and to when it may begin to raise interest rates. Weakness in energy producers is also pulling the overall market lower with Dec crude (CLZ15 -1.32%) down -1.16% to a 1-3/4 month low. European stocks were also pressured by a 3.3% drop in BASF SE after the world’s largest chemical maker cut its full-year growth targets due to the slide in crude prices and slowing demand in Brazil and China. Asian stocks settled mostly lower: Japan -0.90%, Hong Kong +0.11%, China +0.14%, Taiwan -0.50%, Australia -0.03%, Singapore -0.99%, South Korea -0.13%, India -0.40%. Asian stocks were undercut by weakness in energy producers and Japanese stocks also closed lower as exporters sold-off when the yen strengthened against the dollar, which reduces the earnings prospects of exporters. China’s Shanghai Stock Index erased losses in the last hour of trade and closed higher after defense stocks rallied as a U.S. navy patrol sailed close to islands in the South China Sea claimed by China.

The dollar index (DXY00 -0.12%) is down -0.08%. EUR/USD (^EURUSD) is unchanged. USD/JPY (^USDJPY) is down -0.58%.

Dec T-note prices (ZNZ15 +0.05%) are up +1.5 ticks.

ECB Executive Board member Praet said the ECB is looking at ways to lift inflation without “taboos” as “we are in a situation in which the reaching of our objective could be delayed.”

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) Sep durable goods orders (expected -1.5% and unch ex-transportation, Aug -2.3% and -0.2% ex-transportation), (2) Aug S&P CaseShiller composite-20 home price index (expected +0.10% m/m and +5.10% y/y, Jul -0.20% m/m and +4.96% y/y), (3) preliminary-Oct Markit services PMI (expected +0.4 to 55.5, Sep -1.0 to 55.1), (4) Oct U.S. consumer confidence from the Conference Board (expected unchanged at 103.0, Sep +1.7 to 103.0), (5) Oct Richmond Fed manufacturing index (expected +2 to -3, Sep -5 to -5), and (6) the first day of the FOMC’s 2-day meeting.

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