Stock Market Update

The S&P 500 futures are up 14 points and are trading 0.3% above fair value, the Nasdaq 100 futures are up 52 points and are trading 0.2% above fair value, and the Dow Jones Industrial Average futures are up 105 points and are trading 0.2% above fair value.

The first day of the third quarter features a positive bias in early trading. Pre-open gains in the mega cap space have contributed to the upside bias. Some speculative buying interest has also contributed to premarket gains after Keith Gill (Roaring Kitty) disclosed a 6.6% passive stake in Chewy (CHWY), which shows a 18% gain ahead of the open.

A jump in market rates hasn't deterred upside early action. The 10-yr note yield is up seven basis points to 4.41% and the 2-yr note yield is up three basis points to 4.75%.

Today's economic calendar features:

• 9:45 ET: Final June S&P Global U.S. Manufacturing PMI (prior 51.7)
• 10:00 ET: June ISM Manufacturing Index (Briefing.com consensus 49.1%; prior 48.7%) and May Construction Spending (Briefing.com consensus 0.1%; prior -0.1%)

In corporate news:

• Amazon (AMZN 195.15, +1.90, +1.0%): aims to spend more than $100 bln over the next 10 years on data centers, according to WSJ
• Boeing (BA 181.30, -0.81, -0.4%): DOJ expects to change Boeing with fraud, according to Bloomberg
• Verizon (VZ 41.44, +0.19, +0.5%): must pay $847 mln for violating 5G patents, according to Bloomberg
• Chewy (CHWY 32.48, +5.22, +18.4%): Keith Gill (Roaring Kitty) dislcosed 6.6% passive stake
• Walgreens (WBA 12.06, -0.03, -0.3%): Boots sale plans stall as Boots executive departs, according to Reuters
• Visa (V 263.30, +0.83, +0.3%), Mastercard (MA 442.50, +1.34, +0.3%): Judge says Visa and Mastercard can withstand larger settlement with merchants, according to Reuters
• Spirit Aerosystems (SPR 34.40, +1.53, +4.7%): to be acquired by Boeing (BA) for $37.25 per share

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region began the week on a mostly higher note while Hong Kong's Hang Seng was closed for a holiday. Japan's Nikkei: +0.1%, Hong Kong's Hang Seng: HOLIDAY, China's Shanghai Composite: +0.9%, India's Sensex: +0.6%, South Korea's Kospi: +0.2%, Australia's ASX All Ordinaries: -0.3%.
  • In economic data:
    • China's June Manufacturing PMI 49.5, as expected (last 49.5) and Non-Manufacturing PMI 50.5 (expected 51.1; last 51.1).
    • Japan's Q1 All Big Industry CAPEX 11.1% qtr/qtr (last 4.0%). Q2 Tankan Lare Manufacturers Index 13 (expected 11; last 11) and Big Manufacturers Index 14 (expected 13; last 10). Large Non-Manufacturers Index 27 (expected 31; last 27). June Manufacturing PMI 50.0 (expected 50.1; last 50.4). June Household Confidence 36.4, as expected (last 36.2)
    • South Krea's June trade surplus $8.00 bln (expected surplus of $5.24 bln; last surplus of $4.86 bln). June Imports -7.5% m/m (expected -2.2%; last -2.0%) and Exports 5.1% yr/yr (expected 6.3%; last 11.7%). June Manufacturing PMI 52.0 (last 51.6) o India's June Manufacturing PMI 58.3 (expected 58.5; last 57.5)
    • Hong Kong's June Manufacturing PMI 51.8 (expected 51.5; last 51.7)
    • Singapore's Q2 URA Property Index 1.1% qtr/qtr (last 1.4%)
    • Australia's June Manufacturing PMI 47.2 (expected 47.5; last 49.7)
  • In news:
    • Australia's Manufacturing PMI remained in contraction for the fifth consecutive month, but the country's 10-yr yield still climbed to its highest level since the end of May.
    • China's Manufacturing PMI remained in contraction while Non-Manufacturing PMI decelerated unexpectedly.
    • Continued demand for Chinese debt briefly drove the country's 10-yr yield to a fresh record low of 2.19%.
    • Large Manufacturers in Japan reported the first decrease in sentiment in 16 quarters with inflation expectations edging higher.
    • South Korea exported a record $13.4 bln worth of chips in June.
• Major European indices trade in the green. STOXX Europe 600: +0.5%, Germany's DAX: +0.3%, U.K.'s FTSE 100: +0.3%, France's CAC 40: +0.4%, Italy's FTSE MIB: +1.5%, Spain's IBEX 35: +1.1%.
  • In economic data:
    • Eurozone's June Manufacturing PMI 45.8 (expected 45.6; last 47.3)
    • Germany's June Manufacturing PMI 43.5 (expected 43.4; last 45.4)
    • U.K.'s June Nationwide HPI 0.2% m/m (expected 0.0%; last 0.4%); 1.5% yr/yr (last 1.3%). June Manufacturing PMI 50.9 (expected 51.4; last 51.2). May Net Lending to Individuals GBP2.70 bln (expected GBP3.30 bln; last GBP3.10 bln)
    • France's June Manufacturing PMI 45.4 (expected 45.3; last 46.4)
    • Italy's June Manufacturing PMI 45.7 (expected 44.3; last 45.6)
    • Spain's June Manufacturing PMI 52.3 (expected 53.1; last 54.0)
    • Swiss May Retail Sales 0.4% yr/yr (expected 2.5%; last 2.2%). June procure.ch PMI 43.9 (last 46.4)
  • In news:
    • The first round of parliamentary elections in France resulted in an expected strong showing for Marine Le Pen's National Rally ahead of next weekend's run-off, though the party looks unlikely to secure absolute majority.
    • Eurozone's Manufacturing PMI remained in contraction in June while Spain reported continued expansion.