Stock Market Update

The S&P 500 futures are up 35 points and are trading 0.6% above fair value, the Nasdaq 100 futures are up 190 points and are trading 1.0% above fair value, and the Dow Jones Industrial Average futures are up 50 points and are trading 0.2% above fair value.

There's a positive bias in early trading, supported by pre-open gains in mega cap and semiconductor stocks. President Biden announced his exit from the 2024 presidential race in an X post, adding that he endorses VP Kamala Harris, who will seek the Democratic nomination. The response from the equity and bond markets has been muted so far.

The 10-yr note yield is down two basis points to 4.22% and the 2-yr note yield is up one basis point to 4.52%.

There is no US economic data of note today.

In corporate news:

• Verizon (VZ 40.49, -1.13, -2.7%): reports EPS in-line, revs in-line; reaffirms FY24 EPS guidance
• Truist (TFC 41.67, -0.74, -1.7%): beats by $0.25, beats on revs; guides Q3 revs in-line; guides FY24 revs above consensus
• CrowdStrike (CRWD 296.55, -12.26, -3.4%): 1600 flights were cancelled Saturday amid ongoing effects from global IT outage, according to CNN
• Microsoft (MSFT 440.02, +2.89, +0.7%): is helping its customers through the CrowdStrike outage
• Walt Disney (DIS 95.82, +0.08, +0.1%): Safra Catz, CEO of Oracle, to leave Disney board of directors
• Nvidia (NVDA 120.37, +2.44, +2.1%): aims to introduce artificial intelligence chip for Chinese market, according to Reuters. 

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region began the week on a mostly lower note. Japan's Nikkei: -1.2%, Hong Kong's Hang Seng: +1.3%, China's Shanghai Composite: -0.6%, India's Sensex: -0.1%, South Korea's Kospi: -1.1%, Australia's ASX All Ordinaries: -0.5%.
  • In economic data:
    • Hong Kong' June CPI 0.5% m/m (last -0.2%); 1.5% yr/yr (last 1.2%)
    • New Zealand's June trade surplus $699 mln (expected surplus of $294 mln; last surplus of $54 mln)
  • In news:
    • The People's Bank of China unexpectedly lowered its one-year loan prime rate to 3.35% from 3.45% while the five-year rate was lowered to 3.85% from 3.95%, making for the first cut to these rates since August.
    • Amazon is expected to start selling prescription drugs in Japan later this year.
    • The Bank of Japan's Minutes from the bond market group meeting two weeks ago showed an agreement that the central bank should set and announce the sizes for its bond purchases for the next two years at the upcoming policy meeting.
• Major European indices are starting the week on a solid note, overshadowing weakness among airlines after Ryanair missed quarterly expectations and issued soft guidance. STOXX Europe 600: +1.1%, Germany's DAX: +1.3%, U.K.'s FTSE 100: +0.8%, France's CAC 40: +1.2%, Italy's FTSE MIB: +0.9%, Spain's IBEX 35: +0.6%.
  • No data today
  • In news:
    • European Central Bank policymaker Kazimir said that there is potential for additional easing while policymaker Makhlouf said that there is no need to rush to make policy decisions.
    • The British government will reportedly offer above-inflation pay hikes to teachers and nurses.