-Fed division: Federal Reserve Governor Daniel Tarullo has added to division at the central bank, saying that he doesn’t currently favor raising rates in 2015, echoing comments from fellow-Governor Lael Brainard on Monday. Though the comments from the two governors put them at odds with Fed Chair Janet Yellen, the market agrees with them as market-based indicators put the chances of a rate rise this year at less than 35 percent.
-Chinese deflation risks: Consumer inflation increased 1.6 percent in September, down from 2 percent in August and below a 1.8 percent median estimate in a Bloomberg survey. China’s producer-price index fell 5.9 percent, extending its streak of negative readings to 43 months. The Shanghai Composite Index ended the session 0.9 percent lower, and the yuan extended yesterday’s drop against the dollar.
-U.K. unemployment: Unemployment in the U.K. has unexpectedly dropped to 5.4 percent, the lowest level since mid-2008. Wage growth excluding bonuses slowed to 2.8 percent from 2.9 percent. With inflation falling into negative territory, real wage growth in the U.K. is the highest it has been since before the financial crisis.
-Democratic candidates debate Wall Street: In yesterday’s Democratic candidate debate leading contenders Bernie Sanders and Hillary Clinton clashed over who had the tougher plan to rein in Wall Street, with Sanders promising more taxes for the rich and Clinton proposing jail terms for executives, if needed.
-Coming up: Retail sales data for the U.S. will be released at 8:30 a.m. ET, with strong September auto sales data leading to expectations of 0.2 percent headline growth. Excluding auto and gas, retail sales are expected to rise 0.3 percent. Following from JPMorgan results after the bell yesterday, Bank of America reports at 7:00 a.m. ET and Wells Fargo reports at 8:00 a.m. ET
-Earnings season: Several corporate giants including Wells Fargo (WFC), Bank of America (BAC), Delta (DAL) and BlackRock (BLK) will post earnings before the opening bell. Netflix (NFLX, Tech30) is reporting after markets close this afternoon. Shares in Intel (INTC, Tech30) and JP Morgan (JPM) look set to dip at the open after the firms reported earnings on Tuesday afternoon. Intel reported that third quarter sales were essentially unchanged compared to the same period last year, and earnings declined by about 6%. But the results still beat Wall Street expectations. Meanwhile, JP Morgan results showed revenue slipped by 6% as it was hit by a double whammy last quarter: the Federal Reserve kept interest rates low and chaos slammed the financial markets.
-Market overview: U.S. stock futures are holding steady, while stock markets in Europe and Asia move into negative territory. Mike van Dulken, head of research at Accendo Markets, said you can blame the negative market mood on China, which released weak inflation data. The U.S. dollar is weakening a bit, while the Aussie dollar is pushing up versus all major global currencies. Yields on 10-year government bonds are dipping around the world, except in Greece and Portugal where they are inching up. Oil prices are steady around $46.70 per barrel, and gold is rising by about 0.7% to trade around $1,174 per ounce.
-Stock market movers — SanDisk, Micron: SanDisk (SNDK) shares are rising by nearly 10% premarket after Bloomberg reported the chipmaker could be in merger talks with Micron (MU) and Western Digital. Micron’s shares were also up 3% in extended trading.
-Economics: The Bureau of Labor Statistics will post September’s producer price index at 8:30 a.m. ET. Investors watch the index for clues about where inflation is headed. The Census Bureau’s monthly retail sales report also goes out at 8:30 a.m. At 2 p.m., Wall Street will look for the Federal Reserve’s latest «Beige Book.» The report outlines regional economic conditions.
-Daily market recap: Tuesday was a negative day with the Dow Jones industrial average declining by 0.3%, the S&P 500 shedding 0.7% and the Nasdaq losing 0.9%. But investors cheered a big takeover deal between beer brewers Anheuser-Busch InBev (BUD) and SABMiller (SBMRY).