Rise and shine everyone.

Looks like earnings season is starting to leave its mark. US Equity Futures are mixed this morning with the SPX and NDX trading higher, while the Dow and the Russell are trading lower.

Google delivered great earnings on the back of their cloud services but, AMD not so much. AMD’s guidance was lackluster and the stock is down over -8% on the news. This is obviously dragging Nvidia down somewhat as well.

Eli Lilly is down over -7%, after the company reported disappointing revenues of Zepbound (one of the obesity drugs) and lowered guidance substantially to $13.02-$13.52 vs. prior guidance of $16.10-$16.60 and consensus of $13.47.

Caterpillar is also down nearly -3%, after delivering a double miss. The numbers don’t look good. Total Machines:

• Asia/Pacific -9% y/y

• EAME -20% - Latin America flat %

• North America -9%

• World -10% y/y

A few other notable earnings were - First Solar and Chipotle lower after reporting misses; Reddit and Snapchat higher after reporting solid beats.

In the world of macro today, the big news is GDP Growth numbers. We get the US numbers later at 8:30 am ET. But, the standout was Germany, reporting positive QoQ Flash GDP growth of 0.2% vs. -0.1% est. YoY GDP growth still remains negative at -0.2%. Consequently, the EA quarterly GDP growth came in higher at 0.4%, while YoY improved to 0.9%, both beating estimates.

It is also Budget Day in the UK.

On the earnings front, we’ve got Microsoft, Meta, and Starbucks reporting after market close.

BoJ - Brief Preview

We get the BoJ rate decision tomorrow early morning in Asia (late night in the US). We expect the rates to be held steady.

With the LDP losing the majority, we’re likely to see some political uncertainty in Japan. Some of the support has shifted to the more liberal CDPJ party. The LDP needs to form a new coalition, and even then, falls short of controlling the legislative agenda.

The issue for markets is likely a less hawkish stance on economic policy, and therefore, a weaker Yen – a reaction that we saw immediately after the results. We’d be keen to hear what the BoJ Governor has to say about how this may shape Central Bank policy and whether they are considering hikes to defend a weaker Yen.

Note: This meeting will also be accompanied by the BoJ’s Outlook on the Economy and Inflation.

Chart of the Day

According to Polymarket, the divergence between Trump and Harris continue to widen, with Trump in the lead.

Calendars

(news taken from Reuters, FT, Bloomberg; Calendar from Trading Economics)