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• S&P futures up 0.4% after US equities put in another mixed performance on Tuesday. Asian markets mostly lower overnight. China closed for holiday again. European markets stronger with Italy a standout (Italian bonds also bouncing). Germany closed. Treasuries weaker across the curve. Dollar better on yen cross, little changed vs euro, sterling. Gold down 0.2%. WTI crude slightly stronger.
• Italy in focus again today with reports that while government will stick to 2.4% deficit target for 2019, it will bring the number down to 2.2% in 2020 and 2.0% in 2021. Ruling populist coalition had previously said the 2.4% level would be the target for the next three years. These media reports suggesting the Italian budget won’t be as bad as originally feared. More discussion in press about US push to ratchet up the pressure on China. Kudlow recently flagged possibility of new trade talks in December.
Not much corporate news. Lot of discussion about how Amazon wage hike could force other companies to follow given very tight labor market for low-wage workers. JC Penny named Jill Soltau, who most recently headed up JOANN Stores, as its new CEO. Shares of Temper Pedic boosted by report that Mattress Firm could file for bankruptcy as soon as this week. WSJ said oil companies under pressure to boost spending and pad reserves. Honda investing in GM autonomous vehicle division.
• ADP September employment report showed growth of 230K vs consensus for 184K gain and August’s upwardly revised 168K rise (was a 163K). Release noted broad growth among businesses in all size categories, with some notable strength in professional/business services and construction (which together accounted for nearly half of September’s job growth). Focus now shifts to Friday’s nonfarm payrolls report for September, which is expected to see growth of 184K (vs August’s 201K rise), with the unemployment rate ticking down to 3.8% from 3.9% and average hourly earnings rising 0.3% m/m (vs prior month’s 0.4% monthly increase).
  
• Reuters citing multiple sources familiar with the plan, reported Saudi Arabia and Russia struck a private deal in September to boost oil output through the end of the year to dampen prices. Added that they informed US of their intentions before a meeting in Algiers with other producers.  
• WSJ discussed high bar for Q3 earnings season, where the Street is looking for 19%+ growth in S&P 500 EPS following ~25% growth in both Q1 and Q2. Noted market well aware of the tailwinds from tax reform and strong economy, pointing to the 7%+ rally in Q3. Also highlighted higher input costs (labor, raw materials), stronger dollar and trade tensions. Noted that while none of these are likely to put much of a dent in overall results, they could provide some disappoint at the margin.
• Japan services PMI drops to two-year low to 50.2 vs 52..5 prior month
• Investor’s Intelligence said bulls increased to 61.8% in week-ended 2-Oct from 60.6% in prior week. Once again marked most bulls since January (when they hit 66.7%, the most since early 1986) and eighth straight reading above 55%.

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Occasionally, an earnings report date could change, or could be incorrect. We rely on various sources including Street Account, Factset, and Bloomberg to compile this report.    

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