S&P 500 futures trade eight points, or 0.3%, above fair value, as trade sentiment remains relatively upbeat while investors continue to monitor incoming earnings reports and the latest updates on Brexit. The benchmark index could also open the busy week near its record highs that it almost hit on Friday.
Dow component Walgreens Boots Alliance (WBA 56.30, +0.88, +1.6%) is up nicely in pre-market action after it beat earnings expectations. Regarding Brexit, the EU has reportedly agreed to extend the Brexit deadline to Jan. 31 and would allow for an earlier exit if UK lawmakers approve the withdrawal plan in the interim.
Looking ahead, this week's biggest events will include Alphabet's (GOOG 1275, +9.87, +0.8%) earnings report after today's close, followed by Apple's (AAPL 247.40, +0.82, +0.3%) and Facebook's (FB 187.25, -0.64, -0.3%) after Wednesday's close; the FOMC's rate decision on Wednesday; and the Employment Situation Report for October on Friday.
The docket will also include the Conference Board's Consumer Confidence Index for October on Tuesday, the first estimate for Q3 GDP on Wednesday, and the Personal Income and Spending report for September on Thursday. Today will be limited to the Advance reports for International Trade in Goods, Retail Inventories, and Wholesale Inventories for September at 8:30 a.m. ET.
U.S. Treasuries have edged lower, pushing yields higher across the curve. The 2-yr yield is up one basis point to 1.64%, and the 10-yr yield is up three basis points to 1.83%. The U.S. Dollar Index is down 0.1% to 97.75. WTI crude is down 0.4%, or $0.23, to $56.43/bbl.
In U.S. Corporate news:
Walgreens (WBA 56.30, +0.88): +1.6% after beating earnings estimates and increasing its annual savings target.
Microsoft (MSFT 144.45, +3.72): +2.6% after being awarded a $10 billion DOD cloud computing contract, beating out Amazon (AMZN) and Oracle (ORCL).
AT&T (T 37.23, +0.32): +0.9% despite missing revenue estimates, although it did issue upside guidance for FY20. The company will also receive about $1.1 billion in cash and be relieved of a $575 million debt guarantee after Central European Media (CETV 4.60, -0.50, -1.1%) agreed to be acquired by PPF Group for $4.58/share in cash, or approximately $2.1 billion.
Tiffany & Co. (TIF 126.47, +27.92): +28.4% after LVMH (LVMUY) confirmed that it has held preliminary discussions regarding a possible transaction with Tiffany.
Reviewing overnight developments:
Equity indices in the Asia-Pacific region followed form with the U.S. market on Friday. Japan's Nikkei +0.3%, Hong Kong's Hang Seng +0.8%, China's Shanghai Composite +0.9%, India's Sensex closed for holiday South Korea's Kospi +0.3%, Australia's ASX All Ordinaries +0.02%.
In economic data:
China's September Industrial Profits -2.1% yr/yr (expected -1.2%; last -1.7%)
In data:
Investor sentiment was boosted by a Xinhua press report that suggested the U.S. and China have made progress on the text of a "Phase One" trade agreement. This news overshadowed China reporting a weaker than expected drop in industrial profits in September, and just about everything else in a session that lacked meaningful news drivers.
The BOJ policy decision sits on the near horizon with an Oct. 30-31 meeting date. This decision will follow hot on the heels of the Oct. 29-30 FOMC meeting.
Major European indices aren't showing a lot of vigor to start the new week, although the positive mood surrounding U.S-China trade talks has been a supportive factor on the margin. STOXX Europe 600 -0.1%, Germany's DAX +0.4%, U.K.'s FTSE 100 -0.04%, France's CAC 40 +0.1%, Italy's FTSE MIB +0.1%, Spain's IBEX 35 unch.
In economic data:
Germany's September Import Price Index +0.6% m/m (expected +0.2%; last -0.6%); -2.5% yr/yr (expected -2.9%; last -2.7%)
In news:
The EU has reportedly agreed to extend the Brexit deadline to January 31, with an opening for the UK to leave earlier if lawmakers there approve the withdrawal plan in the interim.
Parliament due to vote today on the issue of holding a general election on December 12.
S&P affirmed the UK rating at AA with a Negative outlook.
HSBC disappointed with its quarterly report and French luxury goods giant LVMH has approached Tiffany & Co. with a reported $14.5 billion takeover offer.
