Stock Market Update

The S&P 500 futures are down nine points and are trading 0.2% below fair value, the Nasdaq 100 futures are down 25 points and are trading 0.2% below fair value, and the Dow Jones Industrial Average futures are down 15 points and are trading 0.1% below fair value.

There's a negative bias in early trading on this quarterly options expiration day, which will result in above-average trading volume. The major indices are sitting on solid gains this week, contributing to a burgeoning sense that the market is due for a pullback.

Treasury yields are slightly lower this morning. The 10-yr note yield is down two basis points to 4.23% and the 2-yr note yield is down three basis points to 4.70%.

The economic calendar today features:

• 9:45 ET: Flash June S&P Global U.S. Manufacturing PMI (prior 51.3) and flash June S&P Global U.S. Services PMI (prior 54.8)
• 10:00 ET: May Existing Home Sales (Briefing.com consensus 4.10 mln; prior 4.14 mln) and May Leading Indicators (Briefing.com consensus -0.3%; prior -0.6%)
• 10:30 ET: Weekly natural gas inventories (prior +75 bcf)

In corporate news:

• Delta Air Lines (DAL 49.67, +0.06, +0.1%): increases quarterly cash dividend 50% to $0.15/share from $0.10/share
• Sarepta Therapeutics (SRPT 168.72, +45.22, +36.1%): announces expanded FDA approval of ELEVIDYS to Duchenne Muscular Dystrophy patients
• Smith & Wesson Brands (SWBI 15.86, -0.54, -3.3%): beats by $0.10 (two ests), beats on revs (two ests); increases dividend
• CarMax (KMX 73.00, +1.64, +2.3%): beats by $0.02, reports revs in-line
• Boeing (BA 176.18, -0.12, -0.1%): getting close to a deal to purchase back Spirit AeroSystems (SPR), according to Reuters
• Amazon (AMZN 186.06, -0.04, -0.02%): planning to charge $5-10/month for revamped Alexa/AI service, according to Reuters
• Citigroup (C 60.63, +0.01, +0.02%): Regulators not satisfied with Citigroup's (C) "living will" plan, according to FT

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region ended the week on a mostly lower note. Japan's Nikkei: -0.1% (-0.6% for the week), Hong Kong's Hang Seng: -1.7% (+0.5% for the week), China's Shanghai Composite: -0.2% (-1.1% for the week), India's Sensex: -0.4% (+0.3% for the week), South Korea's Kospi: -0.8% (+0.9% for the week), Australia's ASX All Ordinaries: +0.4% (+0.8% for the week).
  • In economic data:
    • Japan's May National CPI 0.5% m/m (last 0.4%); 2.8% yr/yr (last 2.5%). May National Core CPI 2.5% yr/yr (expected 2.6%; last 2.2%). Flash June Manufacturing PMI 50.1 (expected 50.6; last 50.4) and flash Services PMI 49.8 (last 53.8)
    • South Korea's May PPI 0.1% m/m (last 0.3%); 2.3% yr/yr (last 1.9%)
    • India's flash June Manufacturing PMI 58.5 (last 57.5) and flash Services PMI 60.4 (expected 60.0; last 60.2)
    • Hong Kong's May CPI -0.2% m/m (last -0.7%); 1.2% yr/yr (expected 1.3%; last 1.1%)
    • Australia's flash June Manufacturing PMI 47.5 (last 49.7) and flash Services PMI 50.6 (last 52.5)
  • In news:
    • Japan's CPI and core CPI growth accelerated on a yr/yr basis in May, but core CPI growth was a touch below expectations.
    • Flash Manufacturing PMI readings from the region showed a deceleration in the pace of growth in Japan while Australia's reading fell deeper into contraction.
    • Australian respondents blamed high rates and weak economic conditions for the poor showing.
    • Japan's Services PMI fell into contraction (actual 49.8; prior 53.8).
    • China's Housing Ministry urged local governments to speed up purchases of unsold homes.
    • The Japanese government will consider raising the minimum wage next week.
    • Bank Indonesia left its policy rate at 6.25%, as expected.
• Major European indices are on track for a lower finish to the week. STOXX Europe 600: -0.6% (+0.9% week-to-date), Germany's DAX: -0.3% (+1.0% week-to-date), U.K.'s FTSE 100: -0.5% (+1.0% week-to-date), France's CAC 40: -0.5% (+1.8% week-to-date), Italy's FTSE MIB: -0.9% (+2.2% week-to-date), Spain's IBEX 35: -1.0% (+0.5% week-to-date).
  • In economic data:
    • Eurozone's flash June Manufacturing PMI 45.6 (expected 48.0; last 47.3) and flash Services PMI 52.6 (expected 53.5; last 53.2)
    • U.K.'s May Retail Sales 2.9% m/m (expected 1.6%; last -1.8%); 1.3% yr/yr (expected -0.9%; last -2.3%). May Core Retail Sales 2.9% m/m (expected 1.3%; last -1.4%); 1.2% yr/yr (expected -0.8%; last -2.5%). May Public Sector Net Borrowing GBP14.10 bln (expected GBP14.50 bln; last GBP17.52 bln). Flash June Manufacturing PMI 51.4 (expected 51.3; last 51.2) and flash Services PMI 51.2 (expected 53.0; last 52.9)
    • Germany's flash June Manufacturing PMI 43.4 (expected 46.4; last 45.4) and flash Services PMI 53.5 (expected 54.4; last 54.2)
    • France's June Business Survey 99 (expected 100; last 99). Flash June Manufacturing PMI 45.3 (expected 46.8; last 46.4) and flash Services PMI 48.8 (expected 50.0; last 49.3)
  • In news:
    • Flash Manufacturing and Services PMI readings from France and Germany disappointed while the U.K.'s Manufacturing PMI showed slightly higher than expected growth.
    • The weak results fueled some speculation that the European Central Bank could announce another rate cut sooner rather than later.
    • French Finance Minister Le Maire said that the promise to reduce public spending should not be underestimated.