Stock Market Update

The S&P 500 futures are up 23 points and are trading 0.5% above fair value, the Nasdaq 100 futures are up 119 points and are trading 0.7% above fair value, and the Dow Jones Industrial Average futures are up 146 points and are trading 0.4% above fair value.

There's a positive bias in early trading in front of a busy week. Earnings reporting picks up steam, headlined by Microsoft (MSFT), Meta Platforms (META), Amazon (AMZN), and Apple (AAPL). These names, and other mega cap stocks, are higher in pre-open action, boosting the broader market. 

The early bias is also in response to a drop in Treasury yields. The 10-yr note yield is down five basis points to 4.15% and the 2-yr note yield is down three basis points to 4.36%.

This week's calendar also features a Fed decision on Wednesday. The FOMC is expected to leave rates unchanged and signal a rate cut is likely at the September meeting.  

The economic lineup includes the July Employment Situation report on Friday.

In corporate news:

• McDonald's (MCD 253.70, +1.70, 0.7%): misses by $0.10, misses on revs
• Abbott (ABT 99.50, -5.74, -5.5%): will pay $495 mln in damages related to baby formula case, according to WSJ
• Walt Disney (DIS 90.66, +0.73, +0.8%): Deadpool & Wolverine' earned $205 mln at box office, according to Variety
• Bristol-Myers (BMY 49.87, -0.58, -1.2%): downgraded to Underweight from Equal Weight at Barclays
• 3M (MMM 126.81, -0.18, -0.1%): upgraded to Buy from Hold at Deutsche Bank 

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region began the week on a higher note. Japan's Nikkei: +2.1%, Hong Kong's Hang Seng: +1.3%, China's Shanghai Composite: UNCH, India's Sensex: UNCH, South Korea's Kospi: +1.2%, Australia's ASX All Ordinaries: +0.9%.
  • In economic data:
    • China's June Industrial Profit 3.5% YTD (last 3.4%)
  • In news:
    • There was some renewed uncertainty surrounding this week's policy decision from the Bank of Japan, which could be a rate hike.
    • Japan's Ministry of Finance reportedly wants to see a gradual reduction in bond purchases by the BoJ.
    • The Chinese government launched a program to support the development of small and medium-sized technology firms.
• Major European indices trade on a mostly higher note while France's CAC (-0.4%) underperforms amid weakness in consumer names. STOXX Europe 600: +0.4%, Germany's DAX: +0.2%, U.K.'s FTSE 100: +0.7%, France's CAC 40: -0.4%, Italy's FTSE MIB: +0.1%, Spain's IBEX 35: +0.3%.
  • In economic data:
    • U.K.'s June BoE Consumer Credit GBP1.162 bln (last GBP1.494 bln), June Mortgage Approvals 59,980 (expected 60,000; last 60,130), June Mortgage Lending GBP2.65 bln (last GBP1.26 bln), and June Net Lending to Individuals GBP3.816 bln (expected GBP2.200 bln; last GBP2.800 bln). July CBI Distributive Trades Survey -43 (expected -20; last -24)
    • Italy's June non-EU trade surplus EUR6.04 bln (last EUR5.91 bln)
  • In news:
    • Heineken's results showed weakness in June and July, which has weighed on distiller names.
    • Drugmaker Merck raised its guidance for the year.
    • The Bank of England will meet this week and the market's expectations are leaning toward a rate cut.