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| | | | | | |  Good morning. Here's what you need to know.
- Asian markets were mixed, despite the release of positive growth figures. Japan's Nikkei was down 0.88%; Hong Kong's Hang Seng was up 0.19%; and Korea's KOSPI was up 0.46%. European markets were all down, but U.S. futures were pointing north.
- Last night, the world's major economies began publishing their October manufacturing PMI reports. Most of the Asian economies showed improvement, with Korea at 50.2 (up from 49.7), China at 51.4 (up from 51.1), Taiwan at 53.0 (up from 52.0), and Indonesia at 50.9 (up from 50.2). Australia jumped to 53.2 from 51.7, showing signs of life after struggling during the emerging market slowdown. We'll continue to get more data throughout the morning, so check out the full scorecard here.
- China's HSBC manufacturing PMI rose to 50.9 in October from 50.2 in September, beating economist expectations of 50.7. "The final HSBC China Manufacturing PMI rose to a seven-month high in October, with the stronger momentum of manufacturing growth translating into the first expansion of employment since March," wrote HSBC's Hongbin Qu. "This in turn should support private consumption growth in the coming months. China is on track for a gradual growth recovery."
- As a prelude to the positive PMI prints in Asia, last night South Korea released its trade figures. Exports soared 7.3% year-over-year, much stronger than the 2.3% expected. "This may be considered as evidence of stronger economic activity at a first sight," wrote Societe Generale's Suktae Oh. "But we prefer to be more cautious on interpretation: it is more likely to represent a return to a normal level after the temporary weakness caused by the summer season and Chuseok holidays."
- Today marks the final day in an unusually busy week of U.S. economic data. At 9:00 a.m. ET, we'll get Markit's U.S. PMI reading. Economists are expecting the index to come in at 51.0 for October. "What happened to the U.S. economy in October is a crucial question, since A) the economy may have already started slowing going into the month and B) we had the government shutdown/debt ceiling crisis," wrote our Joe Weisenthal.
- At 10:00 a.m., the ISM manufacturing survey will be released. Economists estimate that the index dropped to 55.1 in October from 56.2. "We expect the index to pull back slightly in October to 55.2, as the government shutdown, along with fears around the debt ceiling debate, begin to weigh on business confidence and thus new order activity," Wells Fargo's John Silvia wrote clients. "While we still expect industrial output to increase in the current quarter, the upside potential likely has been limited by the fiscal policy uncertainty of the past few weeks. This uncertainty is expected to continue given the short-term nature of the deal to end the federal shutdown."
- This afternoon we'll also see September vehicle sales. Economists are looking for the annualized pace of sales to grow to 15.4 million units, from 15.21 million. "[I]ndustry surveys indicate that increased consumer caution during the government shutdown led to weak sales results in the first half of the month," wrote Morgan Stanley's Ted Wieseman. "Retail demand appears to have improved significantly after the shutdown ended, and fleet sales picked up, but with the weak start only a modest rebound in sales for the month as a whole is expected."
- Oil giant Chevron will report earnings before the opening bell, with analysts expecting an EPS of $2.71. Investors will also be looking at whether the company can echo Exxon's boost in oil and gas production.
- The Royal Bank of Scotland's new chief executive Ross McEwan said the bank will take a huge loss this year, announcing that "£38bn of troublesome assets would be ringfenced inside the bailed out bank," the Guardian's Jill Treanor reports. "In an move that was seen as an attempt to restore the often strained relationships with the government and regulators, McEwan also made clear he wanted to draw a line under lingering concerns about the bank's capital position," according to the report.
- The Euro continues to take a dive today as market-watchers worry that low inflation will spur the ECB to cut interest rates maybe as early as next week, the Wall Street Journal's Michele Maatouk reports. "The single currency dropped 1.1% against the dollar Thursday after data showed that inflation in the euro zone fell to a near four-year low in October. Early Friday, the euro dropped further, fetching $1.3532 from $1.3582 late Thursday in New York." Some analysts say the ECB will cut rates in December, according to the report.
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