Here is what you need to know.
Japan’s stock market saw its biggest gain in almost 7 years. Japan’s Nikkei surged 7.7%, posting its biggest gain since October 2008. The gain of more than 1,000 points came on the heels of prime minister Shinzo Abe securing three more years at the helm of the Liberal Democratic Party and promises to cut Japan’s corporate tax rate by at least 3.3 percentage points in 2016. According to the Financial Times, today’s rally was a little peculiar given the corporate tax cut has been expected for quite some time. The Japanese yen is weaker by 0.7% at 120.60 per dollar.
Stock markets around the world are higher. Aside from the gains in Japan, Hong Kong’s Hang Seng (+4.1%) led the way in Asia. In Europe, France’s CAC (+2.5%) is the top gainer. S&P 500 futures are higher by 17.00 points at 1982.75.
China is changing the way it reports GDP. China is changing the way its reports its GDP as it pushes for its inclusion in the IMF’s SDR basket. Bloomberg reports, China’s National Bureau of Statistics will “now release its tally of economic output for each quarter, along with a cumulative reading. Formerly, it released quarterly economic growth rates, but didn’t specify the value of GDP for each three-month period on its own.”
A trio of weak UK data was released. Manufacturing production fell 0.8% month-over-month in July, missing the 0.2% increase that economists were forecasting. After the July weakness, manufacturing is down 0.4% for the year. Meanwhile, industrial production data missed, printing 0.4% mum compared to expectations of a 0.1% gain. The trade deficit widened to £11.1 billion from its previous deficit of £8.5 billion. The British pound is lower by 0.2% at 1.5363.
The Bank of Canada meets today. Canada’s central bank is expected the hold its benchmark interest rate at 0.50%, following the 25 basis point cut at its July meeting. Benjamin Tal, deputy chief economist at CIBC World Markets, told the Toronto Sun weak oil prices and the impact of the slowdown of the Chinese economy on commodity prices are expected to be topics of concern. “They definitely will talk about the recovery in the third quarter, but I think that they probably won’t be as optimistic about the fourth quarter,” he said. The Canadian dollar is down 0.2% at 1.3236 ahead of the decision.
The latest Apple event is happening today. Wednesday’s event is the most anticipated Apple event in years. Aside from discussing its new iPhone and software updates, Apple will also be announcing the new products it will roll out over the remainder of the year. An improved Apple TV, resized iPads and Apple Watch updates are all expected to be announced.
United’s CEO is out. Jeff Smisek has resigned as CEO of United Continental Holdings as a result of a “federal corruption investigation” into trying to “influence senior officials at the Port Authority of New York and New Jersey,” according to the New York Times. The Times reports Smisek created a flight from Newark to South Carolina to benefit former Port Authority Chairman David Samson in an attempt to receive lower costs at Newark Airport. Oscar Munoz has been named president and CEO and will retain his position on the company’s board.
Quicksilver has filed for bankruptcy. The surfwear giant has filed for Chapter 11 bankruptcy under US law, providing immediate relief from paying its debts. Bloomberg reports, Howard Marks’ Oaktree Capital will take control of the company and provide $US175 million in financing. Oaktree is already the largest backer of Quicksilver’s rival Billabong, according to BI Australia.
US economic data is light. JOLTs Job Openings will be released at 10 a.m. ET. Treasury will reopen $US21 billion 10-year notes at 1 p.m. ET. The US 10-year yield is up 4 basis points at 2.22% and near a one-month high.
Earnings reports flow. Barnes & Noble, HD Supply Holdings, Hovnanian and Titan Machinery are the notables set to report ahead of the opening bell. Krispy Kreme, Palo Alto Networks and Quicksilver are among the names releasing their quarterly results after markets close.
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