Overnight Markets And News

Dec E-mini S&Ps (ESZ18 +0.37%) this morning are up +0.23% on positive carry-over from a rally in Chinese stocks along with strength in energy stocks with the price of Nov WTI crude oil (CLX18 +0.87%) up +0.61%. European stocks are down -0.47%, led by a sell-off in Italian stocks and a jump in Italian government bond yields, after the European Commission said the Italian coalition government’s spending plans were excessive and questioned its budget proposal. Italy’s MIB Stock Index is down -1.33% at a 20-month low and the yield on Italy’s 10-year government bond soared to a 4-1/2 year high of 3.808% on concern Italy’s 2019 budget will be rejected by the EU commission. The commission said it will give the Italian government until Monday to provide an explanation for the “obvious significant deviation” from the rules and reduce its budget deficit target. European stocks were also under pressure from a 7% drop in Michelin after it warned of declining sales in Europe and China in the second half of the year. Asian stocks settled mixed: Japan -0.56%, Hong Kong +0.42%, China +2.58%, Taiwan -0.35%, Australia -0.05%, Singapore -0.23%, South Korea +0.41%, India -1.33%. China’s Shanghai Composite had posted a fresh 3-3/4 year low on growth concerns after China Q3 GDP rose at a weaker-than-expected +6.5% y/y pace, the slowest pace of expansion in 9-1/2 years. However, stocks recovered from that 3-3/4 year low and moved higher on signs that state-sponsored funds came in to buy stocks in the last hour of trade. China’s top financial officials also tried to shore up confidence in the markets after PBOC Governor Yi Gang said the PBOC is studying measures to ease companies’ financing difficulties and will use policy tools to support banks’ credit expansion, while Vice Premier Liu He said that Chinese equity valuations had dropped to historically cheap levels.

The dollar index (DXY00 -0.04%) is down -0.01%. EUR/USD (^EURUSD +0.17%) is up +0.17%. USD/JPY (^USDJPY+0.30%) is up +0.19%.

Dec 10-year T-note prices (ZNZ18 -0-030) are unchanged.

China Sep industrial production rose +5.8% y/y, weaker than expectations of +6.0% y/y and the slowest pace of increase in nearly 3 years.

China Q3 GDP rose +6.5% y/y, weaker than expectations of +6.6% y/y and the slowest pace of expansion in 9-1/2 years.