Markets Mostly Flat, Discretionary Stocks Find Pressure

Charles Schwab: On the Market

Posted: 9/7/2017 4:15 PM ET

Markets Mostly Flat, Discretionary Stocks Find Pressure

U.S. stocks closed mostly flat as Dow member Walt Disney and Comcast announced warnings in regard to financial numbers this quarter and after the European Central Bank kept its monetary policy stance unchanged. The U.S. dollar touched on two-year lows and Treasury yields dropped. The potential destruction arising from Hurricane Irma added to the skittishness of the markets. Jobless claims jumped in the aftermath of Hurricane Harvey and Q2 productivity was revised higher. Crude oil and gold both rose.

The Dow Jones Industrial Average (DJIA) declined 23 points (0.1%) to 21,785, the S&P 500 Index was nearly unchanged at 2,465, and the Nasdaq Composite increased 5 points (0.1%) to 6,398. In moderate volume, 787 million shares were traded on the NYSE and 2.0 billion shares changed hands on the Nasdaq. WTI crude oil ticked $0.07 lower to $49.09 per barrel and wholesale gasoline lost $0.01 to $1.66 per gallon. Elsewhere, the Bloomberg gold spot price was $14.62 higher at $1,348.84 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—was 0.8% lower at 91.55.

Shares of GoPro Inc. (GPRO $10) jumped after the wearable action camera maker announced that it expects revenue and gross margin for Q3 to be at the high end of its previously reported guidance, citing strong demand for its GoPro products.

RH (RH $72), the furniture company formerly known as Restoration Hardware, reported a Q2 loss of $0.28 per share, or earnings-per-share (EPS) of $0.65 ex-items, versus the FactSet estimate calling for EPS of $0.47, as revenues grew 14.0% year-over-year (y/y) to $619 million, compared to the forecasted $606 million. Q2 same-store sales rose 7.0% y/y, above the projected 5.8% increase. RH boosted its full-year EPS outlook after issuing Q3 profit guidance that easily beat expectations. Shares surged over 45%.

Dow member Walt Disney Co. (DIS $97) was under solid pressure after the company noted at the Bank of America Merrill Lynch 2017 Media, Communications and Entertainment Conference that its full-year EPS will be roughly in line with the last year's $5.72, versus the Street's expectation of $5.89.

At the same conference, Comcast Corp. (CMCSA $38) said Hurricane Harvey and competition has resulted in a loss of some video subscribers that will hit its financial numbers this quarter.

Eli Lilly and Co. (LLY $82) announced steps to streamline its operations to focus better on developing new medicines and improve its cost structure, including the reduction of its workforce by 3,500 positions. Shares finished higher.

Cabela's Inc. (CAB $61) rallied after a subsidiary of Synovus Financial Corp. (SNV $41) received regulatory approval to acquire certain assets and assume certain liabilities of World's Foremost Bank, a subsidiary of the camping, hunting and fishing gear chain.

Jobless claims boosted by Hurricane Harvey, Q2 productivity revised higher

Weekly initial jobless claims (chart) surged by 62,000 to 298,000 last week, well above the Bloomberg forecast of 245,000, with the prior week’s figure being unrevised at 236,000. The jump is being mostly attributed to the impact of Hurricane Harvey. The four-week moving average rose by 13,500 to 250,250, while continuing claims declined 5,000 to 1,940,000, south of estimates of 1,945,000.

Final Q2 nonfarm productivity (chart) was revised to a 1.5% rate of growth on an annualized basis, from the preliminary estimate of a 0.9% increase, and versus expectations of a 1.3% rise. Q1 productivity was unrevised at a 0.1% gain. Unit labor costs were adjusted to a 0.2% gain, from the initial report of a 0.6% increase, and versus the forecast calling for a 0.3% rise. Q1 labor costs were revised lower to a 4.8% increase.

Treasuries rose, as the yield on the 2-year note fell 4 basis points (bps) to 1.27%, while the yields on the 10-year note and the 30-year bond dropped 6 bps to 2.05% and 2.66%, respectively. Bond yields and the U.S. dollar were back under pressure after yesterday's modest rebound, with the former falling back to lows not seen since November and the latter trading at more than a two-year low. Geopolitical and domestic political uncertainties are lingering, while the markets are grappling with global monetary policy uncertainty as Fed rate hike expectations slip and the European Central Bank (ECB) left its monetary policy stance unchanged but noted that currency volatility needs to be monitored. Also, the markets are eyeing Hurricane Irma, which is tracking toward Florida on the heels of last week's Hurricane Harvey that damaged the Texas Gulf and disrupted the oil & gas markets.

Schwab's Chief Fixed Income Strategist Kathy Jones notes in her article, What's the Bigger Risk: Bond Market Bubble or Complacency?, we think bond yields are likely to rise from current levels as the economy continues to improve and the Federal Reserve tightens policy, but we don’t see a bubble in the market. Read more on the Fixed Income page at www.schwab.com, and for analysis of investing styles, see Schwab's Chief Investment Strategist Liz Ann Sonders' latest article, Radioactive II: Could the Tide Finally Be Turning for Active vs. Passive?, on the Markets & Economy page. Follow Kathy and Liz Ann on Twitter: @kathyjones and @lizannsonders.

Tomorrow, the U.S. economic calendar will deliver a read on wholesale inventories for July, expected to have increased 0.4% m/m, matching the rise seen in June, while in the final hour of trading, consumer credit will be reported and is expected to have expanded by $15.0 billion during July.

Europe mostly higher as ECB holds policy steady, Asia mixed amid China data

European equity markets traded mostly higher, despite the reaction in the currency markets after the ECB expectedly left its monetary policy stance unchanged. The euro jumped to highs not seen in over two years versus the U.S. dollar and bond yields in the region were lower to pressure financials and hamstring Italian and Spanish stocks. The markets scrutinized the customary press conference from ECB President Mario Draghi that followed the decision. He noted that the recent volatility in the currency markets is a source of uncertainty which requires monitoring for its impact on price stability, while reiterating that substantial policy accommodation is still needed. The ECB lowered its inflation outlooks for 2018 and 2019, while raising this year's GDP growth forecast and leaving its guidance for economic output in to following two years unchanged. As expected, he did not offer much on the timing of removing stimulus measures, noting that autumn may be when the groundwork for the process is detailed. The markets are anticipating next month's meeting to be the one when we get the ECB's plans for paring its stimulus measures. The euro's recent rally has been reported to be causing concern at the central bank and the markets appear to be surprised that Draghi did not offer more in terms stemming the euro's jump.

The British pound also gained ground on the greenback. In other economic news, German industrial production came in flat month-over-month in July, after falling 1.1% in June, and versus projections of a 0.5% gain. Eurozone Q2 GDP was revised higher to a 2.3% y/y pace, from the preliminary estimate of a 2.2% increase. For a look at global stock investing, see Schwab's Chief Global Investment Strategist Jeffrey Kleintop's, CFA, latest article, U.S. vs international: what do earnings tell us about what may be ahead?, on the Markets & Economy page at www.schwab.com, and his video with Vice President of Trading and Derivatives, Randy Frederick, Is An Optimistic Outlook for Global Equities Warranted?, on the Insights & Ideas page. Follow Jeff and Randy on Twitter: @jeffreykleintop and @randyafrederick.

Stocks in Asia finished mixed following yesterday's modest rebound in the U.S., aided by news that President Trump supported a package that included a short-term debt ceiling extension that appeared to ease political concerns somewhat. Market participants traded with some caution ahead of today's monetary policy decision from the ECB and with China expected to report trade and inflation data later this week. Japanese equities rose, with the yen paring a recent run, while South Korean stocks snapped a recent losing streak. Tensions toward North Korea had pressured the Korean markets but no new developments in the past couple days seems to be cooling concerns. Schwab's Jeffrey Kleintop, CFA, notes in his article, Missiles and Markets: An investor guide to geopolitical risks investors should avoid overreacting to geopolitical developments and stick to their long-term financial plans. Read more on the International Investing page at www.schwab.com. Shares trading in mainland China and Hong Kong traded lower. Australian securities finished flat after softer-than-expected reads on retail sales and the trade surplus, while Indian equities were little changed.

The international economic docket for tomorrow will include trade data, Q2 GDP and bank lending figures from Japan, home loans from Australia, trade data and labor costs from Germany and industrial and manufacturing production from the U.K. and France.

Stocks Continue Rise to New Highs

Charles Schwab: On the Market

Posted: 12/8/2016 4:15 PM ET

Stocks Continue Rise to New Highs

U.S. stocks continued to add to weekly gains as the major domestic indexes joined a global equity advance following a mixed monetary policy decision from the European Central Bank. Treasury yields extended gains, the U.S. dollar and crude oil prices also moved higher and gold declined. On the equity front, financials were stand-out winners, while Lululemon Athletica rallied on an upbeat earnings report.

The Dow Jones Industrial Average (DJIA) advanced 65 points (0.3%) to 19,615, the S&P 500 Index gained 5 points (0.2%) to 2,246 and the Nasdaq Composite added 24 points (0.4%) to 5,417. In moderately-heavy volume, 975 million shares were traded on the NYSE and 2.2 billion shares changed hands on the Nasdaq. WTI crude oil added $1.07 to $50.84 per barrel and wholesale gasoline was $0.01 lower at $1.50 per gallon. Elsewhere, the Bloomberg gold spot price declined $3.02 to $1,170.97 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—increased 0.8% to 101.08.

Lululemon Athletica Inc. (LULU $69) reported 3Q earnings-per-share (EPS) ex-items of $0.47, above the $0.43 FactSet estimate, as revenues rose 13.0% year-over-year (y/y) to $544 million, topping the expected $541 million. 3Q same-store sales grew 7.0% y/y, exceeding the expected gain of 5.2%. The yoga apparel company issued 4Q guidance that was a bit shy of estimates, while offering a stronger-than-expected full-year EPS outlook. Separately, the company announced a $100 million share repurchase plan. Shares surged.

Costco Wholesale Corp. (COST $158) posted fiscal 1Q profits ex-items of $1.17 per share, below the forecasted $1.19, as revenues rose 3.2% y/y to $28.1 billion, versus the projected $28.3 billion. COST achieved a 1.0% y/y increase in 1Q same-store sales, compared to the expected 1.2% gain. Shares finished solidly higher despite the results, as the company noted that traffic seemed to have hit a trough and come back a little, pointing out that "It certainly seems like it's back on the mend."

Dow member Chevron Corp. (CVX $115) announced that its 2017 capital expenditures budget is expected to be $19.8 billion, down at least 15.0% versus 2016. CVX closed higher. For more on the energy sector in the wake of the OPEC production cut last month, see our article, Are Things Finally Looking Up for the Oil Industry?, at www.schwab.com/insights, and follow Schwab on Twitter: @schwabresearch.

H&R Block Inc. (HRB $23) announced a fiscal 2Q loss of $0.67 per share, compared to the expected shortfall of $0.68, with revenues rising 2.3% y/y to $131 million, above the forecasted $127 million. Shares declined amid concerns about the potential impact on demand for the company's tax prep services of President-elect Donald Trump's potential tax reforms.

Jobless claims decline

Weekly initial jobless claims (chart) fell by 10,000 to 258,000 last week, above the Bloomberg forecast calling for a decline to 255,000, as the prior week figure was unrevised at 268,000. The four-week moving average rose by 1,000 to 252,500, while continuing claims fell by 79,000 to 2,005,000, south of the estimated level of 2,048,000.

For our latest look at employment, see Schwab's Chief Investment Strategist Liz Ann Sonders' latest article, Welcome to the Working Week: An Update on Jobs. Liz Ann also offers her latest article, You've Got to Earn It: Valuations Aided by Improving "E," where she points out that economic and earnings momentum has picked up—and not just post-election, with the latter expected to grow by more than 12% in 2017. She concludes that valuations are reasonable considering inflation; but that also represents a risk factor next year. Read both these articles at www.schwab.com/marketinsight and follow Liz Ann on Twitter: @lizannsonders.

Treasuries were lower with the yield on the 2-year note ticking 1 basis point (bp) higher to 1.10%, the yield on the 10-year note gaining 5 bps to 2.39%, and the 30-year bond rate advancing 7 bps to 3.09%.

With bond yields having spiked since the surprise presidential election and amid elevated December rate hike expectations, which have been bolstered by some mostly stronger-than-expected economic data, see Schwab's Chief Fixed Income Strategist, Kathy Jones' latest article, Bond Market Outlook: Higher Rates and Known Unknowns at www.schwab.com/onbonds. Kathy notes the prospect of fiscal stimulus and tax reform under the new administration is driving bond yields higher, and we believe the upward trend is likely to continue into 2017. However, there are many "known unknowns" about policy that could affect the outlook for investors. We suggest investors take a cautious approach to the bond market, focusing on high quality domestic bonds and keeping the average portfolio duration in the short to intermediate term until there is more clarity.

Be sure to check out Kathy's video with Schwab's Vice President of Trading and Derivatives, Randy Frederick titled How Will Expected December Interest Rate Hike Affect Markets in 2017?, at www.schwab.com/insights. Follow Kathy and Randy on Twitter: @kathyjones and @randyafrederick.

Releases for the U.S. economic calendar tomorrow will consist of wholesale inventories, expected to have declined 0.4% m/m during October after rising 0.1% in September, and the preliminary University of Michigan Consumer Sentiment Index for December, projected to move higher to 94.5 from the 93.8 registered for November's final read.

Europe higher in choppy action following ECB decision, Asia joins global market rally

European equities finished higher after a bout of choppiness in the wake of the monetary policy decision from the European Central Bank (ECB), which expectedly decided to leave its benchmark interest rate unchanged and extend its asset purchase program by about nine months. Briefly following the decision, the euro rallied and stocks moved to the downside as the ECB announced that during the nine-month extension, asset purchases will be lowered to a monthly pace of 60 billion euros from the current pace of 80 billion euros.

However, the knee-jerk reaction reversed, with the euro falling and stocks extending a winning streak to four sessions. The ECB noted that if its outlooks for inflation—"a sustained adjustment in the path of inflation consistent with its inflation aim"—and the economy become less favorable it intends to increase the asset purchase program in terms of size and/or duration. Also, the ECB eased the restrictions on the types of assets it can purchase as it will be allowed to buy bonds with a yield below the deposit rate, which was previously a minimum eligibility requirement. The central bank issued updated economic projections, saying it expects the economic expansion to proceed at a moderate but firming pace, leaving its outlook for real GDP growth broadly unchanged from its September forecasts. Basic materials and financials showed strength following the decision, with bond yields in the region moving higher.

Amid the choppiness in the markets and the likelihood of continued global volatility, Schwab's Chief Global Investment Strategist Jeffrey Kleintop, CFA, reminds investors, Three Reasons Why Now is Not the Time to Retreat from Global Diversification and why Your portfolio may be less diversified than you think. Follow Jeff on Twitter: @jeffreykleintop. Italian stocks continued to rebound from the failed Italian referendum over the weekend that exacerbated political uncertainty in the region as it was the first step of several that could pave the way for an Italian exit from the European Union (EU). Schwab's Director of International Research, Michelle Gibley, CFA, discusses the uncertain political front in the region in her latest article, Europe Votes: Could More Countries Reject the EU? Read all these articles at www.schwab.com/oninternational. The British pound finished lower versus the U.S. dollar.

Stocks in Asia finished mostly higher following strong rallies in the U.S. and Europe yesterday, bolstered by speculation ahead of today's European Central Bank decision which yielded an extension of its asset purchase program. Japanese equities gained ground despite some strength in the yen and a disappointing revision to the nation's 3Q GDP growth. Japan's economic output grew at a 1.3% annualized quarter-over-quarter pace, revised down from the preliminary estimate of a 2.2% rate of expansion, and compared to expectations of a 2.3% gain. The negative revision was led by decreases in capital spending and private inventories. Australian securities advanced with weakness in oil & gas issues on yesterday's extension of losses for crude oil prices being more than offset by strength in financials and basic materials stocks.

Stocks in India rallied to rebound from yesterday's decline that followed the Reserve Bank of India's unexpected decision to not cut its benchmark interest rates. South Korean equities jumped to extend a winning streak to three sessions. Stocks in Hong Kong rose as the markets continue to adjust to this week's start of the exchange trading link between Hong Kong and Shenzhen. Chinese markets also digested a relatively favorable November trade report, which showed exports snapped a seven-month losing streak and imports grew much more than expected. Securities trading in Shanghai finished lower. In the wake of the China data, Schwab's Jeffrey Kleintop, CFA, offers his latest article, Happy Unrecession: The Alice in Wonderland economy, noting that while volatility may lie ahead for stocks, a prolonged bear market and recession seem unlikely for 2017. Read more at www.schwab.com/oninternational.

Tomorrow, the international economic docket will yield the BSI All Industry Index from Japan, CPI, PPI and foreign direct investment from China and home loans from Australia. Reports from across the pond are expected to include trade data and labor costs from Germany, industrial and manufacturing production from France and trade data and construction output from the U.K.

Bulls Grab Third Win for Week

Charles Schwab: On the Market

Posted: 12/7/2016 4:15 PM ET

Bulls Grab Third Win for Week

U.S. stocks finished with solid gains, joining an advance for most global equity markets ahead of tomorrow's highly anticipated monetary policy decision from the European Central Bank. Some limited domestic economic reports showed mostly in line job openings data, a smaller-than-expected increase in consumer credit and a modest decline in weekly mortgage applications. Treasuries and gold were higher, while the U.S. dollar and crude oil prices moved lower. In equity news, Western Digital and Dave & Buster's rallied on upbeat reports and MasterCard boosted its dividend and share buyback plan.

The Dow Jones Industrial Average (DJIA) advanced 298 points (1.5%) to 19,550, the S&P 500 Index gained 29 points (1.3%) to 2,241 and the Nasdaq Composite added 61 points (1.1%) to 5,394. In moderately-heavy volume, 1.0 billion shares were traded on the NYSE and 2.1 billion shares changed hands on the Nasdaq. WTI crude oil fell $1.16 to $49.77 per barrel and wholesale gasoline was $0.03 lower at $1.51 per gallon. Elsewhere, the Bloomberg gold spot price traded $3.37 higher to $1,173.22 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—declined 0.3% to 100.17.

Western Digital Corp. (WDC $69) raised its fiscal 2Q earnings-per-share (EPS) and revenue guidance, with the storage technology company noting continued strong acceptance from customers and a favorable mix of its broad product portfolio, which enabled solid execution in a favorable market. Separately, WDC announced a renewed cross license agreement with Samsung Electronics Co. Ltd. (SSNLF $1,250). Shares of WDC finished solidly higher.

Mastercard Inc. (MA $105) announced that its board increased its quarterly dividend by 16.0% to $0.22 per share, as well as approved a new share repurchasing program of up to $4.0 billion of its Class A common stock. MA gained ground.

Dave & Buster's Entertainment Inc. (PLAY $57) jumped nearly 20% after the company posted 3Q EPS of $0.25, above the FactSet estimate of $0.14, with revenues rising 19.0% year-over-year (y/y) to $229 million, north of the projected $217 million. The gaming and dining chain said its strength was broad-based as it experienced momentum across the country and throughout the quarter. 3Q same-store sales grew 5.9% y/y, versus the forecasted 2.3% increase. PLAY raised its full-year earnings and revenue guidance.

Job openings roughly in line

The Labor Department's Job Openings and Labor Turnover Survey (JOLTS), a measure of unmet demand for labor, dipped to a level of 5.53 million jobs available to be filled in October, from September's upwardly revised 5.63 million level, roughly in line with the Bloomberg forecast of 5.50 million. The hiring and separation rates remained at 3.5% and 3.4%, respectively.

For our latest look at employment, see Schwab's Chief Investment Strategist Liz Ann Sonders' article, Welcome to the Working Week: An Update on Jobs. Liz Ann also offers her latest article, You've Got to Earn It: Valuations Aided by Improving "E," where she points out that economic and earnings momentum has picked up—and not just post-election, with the latter expected to grow by more than 12% in 2017. She concludes that valuations are reasonable considering inflation; but that also represents a risk factor next year. Read both these articles at www.schwab.com/marketinsight and follow Liz Ann on Twitter: @lizannsonders.

Consumer credit, released in the final hour of trading, showed consumer borrowing expanded by $16.0 billion during October, below the $18.7 billion forecast of economists polled by Bloomberg, while September's figure was adjusted upward to an increase of $21.8 billion from the originally reported $19.3 billion. Non-revolving debt, which includes student loans and loans for vehicles and mobile homes, rose $13.7 billion, while revolving debt, which includes credit cards, rose by $2.3 billion.

The MBA Mortgage Application Index declined 0.7% last week, following the previous week's 9.4% fall. The dip came as the Refinance Index decreased 0.7%, while the Purchase Index ticked 0.4% higher. The average 30-year mortgage rate rose 4 basis points (bps) to 4.27%.

Treasuries gained ground, with the yield on the 2-year note dipping 2 bps to 1.10%, while the yields on the 10-year note and the 30-year bond declined 5 bps to 2.34% and 3.03%, respectively.

With bond yields having spiked since the surprise presidential election and amid elevated December rate hike expectations, which have been bolstered by some mostly stronger-than-expected economic data, see Schwab's Chief Fixed Income Strategist, Kathy Jones' latest article, Bond Market Outlook: Higher Rates and Known Unknowns at www.schwab.com/onbonds. Kathy notes the prospect of fiscal stimulus and tax reform under the new administration is driving bond yields higher, and we believe the upward trend is likely to continue into 2017. However, there are many “known unknowns” about policy that could affect the outlook for investors. Trade tariffs and/or a stronger dollar could slow growth and cool inflation, tempering the rise in bond yields. We suggest investors take a cautious approach to the bond market, focusing on high quality domestic bonds and keeping the average portfolio duration in the short to intermediate term until there is more clarity.

Be sure to check out Kathy's video with Schwab's Vice President of Trading and Derivatives, Randy Frederick titled How Will Expected December Interest Rate Hike Affect Markets in 2017?, at www.schwab.com/insights. Follow Kathy, Randy and Schwab on Twitter: @kathyjones, @randyafrederick and @schwabresearch.

Tomorrow, the U.S. economic calendar will be light as weekly initial jobless claims will be the lone major release, which are expected to have declined to a level of 255,000 from the previous week's read of 268,000.

Europe extends rally ahead of ECB decision, Asia mostly higher despite data

European equities finished higher as basic materials stocks helped the markets extend a three-day rally, with optimism growing ahead of tomorrow's monetary policy decision from the European Central Bank that the central bank will extend its asset purchase program. Financials were also standout winners as flared-up Italian banking concerns cooled on talk of support for the sector. Festering banking sector concerns were exacerbated as of late after the failed Italian referendum over the weekend that was the first step of several that could pave the way for an Italian exit from the European Union (EU), as discussed by Schwab's Director of International Research, Michelle Gibley, CFA, in her latest article, Europe Votes: Could More Countries Reject the EU?, at www.schwab.com/oninternational. In economic news, German industrial production rose by a smaller amount than expected in October, while U.K. industrial and manufacturing output both unexpectedly declined for October.

Schwab's Chief Global Investment Strategist Jeffrey Kleintop, CFA, offers his latest article, Happy Unrecession: The Alice in Wonderland economy, noting that while volatility may lie ahead for stocks, a prolonged bear market and recession seem unlikely for 2017. Read more at www.schwab.com/oninternational. Follow Jeff on Twitter: @jeffreykleintop. The euro was higher and the British pound lost ground versus the U.S. dollar, while bond yields in the region were lower.

Stocks in Asia finished mostly higher, with the global markets continuing a post U.S.-election rally, despite a surprise monetary policy decision in India, some disappointing Australian economic data, and caution likely prevailing ahead of tomorrow's monetary policy decision from the ECB. Japanese equities rose, with the yen holding onto recent weakness. Stocks trading in mainland China and Hong Kong advanced, with the markets continued to embrace the honeymoon period of the exchange trading link between Hong Kong and Shenzhen, while shrugging off flared up uncertainty regarding trade relations with the U.S. For analysis of the impact on the global markets of the U.S. election, see Schwab's Jeffrey Kleintop's, CFA, latest article, President Trump and Global Trade: How Will Campaign Promises Play Out?, at www.schwab.com/oninternational.

Australian securities gained ground despite a report showing the nation's 3Q GDP contracted by 0.5% quarter-over-quarter, after expanding 0.6% in 2Q, and compared to the 0.1% dip that was forecasted. Y/Y, the nation's 3Q GDP grew at 1.8%, versus the 2.2% forecasted expansion, and following the 3.1% growth posted in 2Q. The disappointing GDP data may have sparked some optimism that the Reserve Bank of Australia may need to bolster stimulus measures after yesterday's decision to keep its stance in place. South Korean equities ticked higher despite some continued political turmoil. However, Indian stocks fell after the Reserve Bank of India unexpectedly left its benchmark interest rates unchanged, compared to forecasts of a 25 bps cut.

In addition to the aforementioned ECB decision, the international economic docket for tomorrow will deliver trade data, 3Q GDP and bank lending from Japan, local car sales from India, the trade balance for Australia, house price data from the U.K. and non-farm payrolls from France.