Morning Call For Monday, Oct. 29

Overnight Markets And News

Dec E-mini S&Ps (ESZ18 +1.03%) this morning are up +0.77% and European stocks are up +1.02% on strength in technology stocks. M&A activity gave the technology sector a lift as Red Hat surged 52% in pre-market trading after it was purchased by IBM for about $33 billion. A rally in automobile stocks is also boosting European stocks on a report that China’s National Development and Reform Commission, China’s top regulator, is proposing cutting the tax levied on new car purchases in half to 5% from 10% for vehicles with engines no bigger than 1.6 liters. European bank stocks are higher as well after quarterly earnings from HSBC Holdings Plc beat expectations. Asian stocks settled mixed: Japan -0.16%, Hong Kong +0.38%, China -2.18%, Taiwan +0.29%, Australia +1.11%, Singapore +0.32%, South Korea -0.95%, India +2.15%. China’s Shanghai Composite fell to a 1-week low on concern about weaker corporate earnings after data showed China Sep industrial profits rose at the slowest pace in 6 months.

The dollar index (DXY00 +0.05%) is up +0.10%. EUR/USD (^EURUSD +0.05%) is up +0.10%. USD/JPY (^USDJPY +0.44%) is up +0.29%.

Dec 10-year T-note prices (ZNZ18 -0-060) are down -5.5 ticks.

UK Sep net consumer credit rose +0.8 billion pounds, weaker than expectations of +1.2 billion pounds and the smallest increase in 6 months.

UK Sep mortgage approvals rose 65,300, stronger than expectations of 64,700.

Japan Sep retail sales fell -0.2% m/m, right on expectations and the first decline in 4 months.

China Sep industrial profits rose +4.1% y/y, the smallest increase in 6 months.

U.S. Stock Preview

Key U.S. news today includes: (1) Sep personal spending (expected +0.4%, Aug +0.3%) and Sep personal income (expected +0.4%, Aug +0.3%), (2) Sep PCE deflator (expected +0.1% m/m and +2.0% y/y, Aug +0.1% m/m and +2.2% y/y) and Sep core PCE deflator (expected +0.1% m/m and +2.0% y/y, Aug unch m/m and +2.0% y/y), (3) Chicago Fed President Charles Evans (non-voter) speaks at a Chicago Fed banking conference, (4) Oct Dallas Fed manufacturing activity (expected +0.9 to 29.0, Sep -2.8 to 28.1).