Stock Market Update

The S&P 500 futures are down two points and are trading fractionally below fair value, the Nasdaq 100 futures are up 29 points and are trading 0.2% above fair value, and the Dow Jones Industrial Average futures are down 72 points and are trading 0.2% below fair value.

Stock futures are mixed and little changed this morning. Contracts linked to the Nasdaq 100 are higher thanks to premarket gains in some mega cap names. Treasury yields are higher, acting as a limiting factor for equities in early trading. The 10-yr note yield is up five basis points to 4.26% and the 2-yr note yield is up four basis points to 4.72%.

Today's economic data is limited to the June NY Fed Empire State Manufacturing Index at 8:30 ET. 

In corporate news:

• Apple's (AAPL 214.04, +1.55, +0.7%): introduction of artificial intelligence features will stretch into next year, according to Bloomberg
• Autodesk (ADSK 235.54, +9.67, +4.3%): Starboard Value purchased $500 mln stake in Autodesk (ADSK), according to WSJ
• Tesla (TSLA 178.25, +0.20, +0.1%): halted Cybertruck deliveries because of wiper problem, according to Electrek 
• Southwest (LUV 28.38, 0.00, 0.0%): flight came within 400 feet of ocean. Regulators are investigating (BA), according to Bloomberg 
• Wells Fargo (WFC 57.16, -0.24, -0.4%): is renegotiating startup deal after incorrectly forecasting revenue, according to WSJ 
• Best Buy (BBY 90.47, +3.26, +3.7%): upgraded to Buy from Neutral at UBS
• Walt Disney (DIS 100.70, +0.73, +0.7%):  "Inside Out 2" generated $155 mln at US box office this weekend; Deadpool & Wolverine will be released in China next month, according to Bloomberg 
• Taiwan Semiconductor Manufacturing Co (TSM 178.21, +5.70, +3.3%): planning price increase for 3nm products, according to TrendForce
• Steel Dynamics (STLD 118.29, -2.40, -2.0%): sees Q2 EPS below consensus

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region began the week on a mostly lower note while markets in Singapore and India were closed for holidays. Japan's Nikkei: -1.8%, Hong Kong's Hang Seng: UNCH, China's Shanghai Composite: -0.6%, India's Sensex: HOLIDAY, South Korea's Kospi: -0.5%, Australia's ASX All Ordinaries: -0.5%.
  • In economic data:
    • China's May Industrial Production 5.6% yr/yr (expected 6.2%; last 6.7%), Retail Sales 3.7% yr/yr (expected 3.0%; last 2.3%), and Fixed Asset Investment 4.0% yr/yr (expected 4.2%; last 4.2%). May Unemployment Rate 5.0%, as expected (last 5.0%) and May House Prices -3.9% yr/yr (last -3.1%)
    • Japan's April Core Machinery Orders -2.9% m/m, as expected (last 2.9%); 0.7% yr/yr (expected -0.1%; last 2.7%)
    • Australia's May job advertisements -2.1% m/m (last -2.3%)
  • In news:
    • Bank of Japan Governor Ueda acknowledged that a July rate hike is a possibility and that the central bank is likely to reduce its purchases by a "considerable volume" at the upcoming meeting.
    • House prices in 67 out of 70 Chinese cities decreased in May.
    • China and Australia agreed to enhance their free trade agreement.
    • The People's Bank of China left its medium-term lending facility rate at 2.50%.
• Major European indices are mixed. STOXX Europe 600: -0.1%, Germany's DAX: +0.1%, U.K.'s FTSE 100: UNCH, France's CAC 40: +0.4%, Italy's FTSE MIB: +0.5%, Spain's IBEX 35: -0.4%.
  • In economic data:
    • Eurozone's Q1 Labor Cost Index 5.1% yr/yr (expected 4.9%; last 3.4%) and wages 5.3% yr/yr (last 3.2%)
    • Italy's May CPI 0.2% m/m, as expected (last 0.1%); 0.8% yr/yr, as expected (last 0.8%)
    • Spain's April trade deficit EUR4.70 bln (last deficit of EUR2.00 bln)
  • In news:
    • Pre-election polls from France suggest that Marine Le Pen's National Rally is on track to receive about 35% of the vote while President Macron's party is expected to come in third place with about 19% of the vote.
    • The European Central Bank has reportedly not discussed activating the transmission protection instrument, which is aimed at preventing bond spreads from widening significantly.
    • European Central Bank policymaker Vucic said that inflation must improve to allow for a rate cut in September.