Stock Market Update

The S&P 500 futures are up 17 points and are trading 0.4% above fair value, the Nasdaq 100 futures are up 81 points and are trading 0.4% above fair value, and the Dow Jones Industrial Average futures are up 20 points and are trading fractionally above fair value.

Contracts tied to the S&P 500 and Nasdaq 100 are higher, while Dow futures trail somewhat due to a pre-open decline in shares of Home Depot (HD). HD reported better-than-expected earnings, but issued below-consensus FY25 EPS guidance. 

Market participants are in wait-and-see mode in front of this week's influential economic data, including the July Producer Price Index (PPI) at 8:30 ET. Treasury yields are lower in front of the report. The 10-yr note yield is down three basis points to 3.89% and the 2-yr note yield is down three basis points to 3.99%.

In corporate news:

• Home Depot (HD 337.40, -8.41, -2.4%): beats by $0.14, beats on revs; guides FY25 EPS below consensus, revs above consensus
• General Motors (GM 42.76, -0.23, -0.5%): aiming to eliminate jobs in China amid plan for larger structural changes, according to Bloomberg
• Tencent Music (TME 12.05, -1.08, -8.2%): misses by RMB0.03, reports revs in-line
• Sea Limited (SE 66.22, -0.70, -1.1%): misses by $0.20, beats on revs
• Dell (DELL 96.89, +1.62, +1.7%): upgraded to Equal Weight from Underweight at Barclays
• JetBlue Airways (JBLU 4.65, -0.15, -3.1): prices offering of $400 mln of 2.50% convertible senior notes due 2029

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region ended Tuesday on a mostly higher note with Japan's Nikkei (+3.5%) returning to levels seen before last Monday's plunge. Japan's Nikkei: +3.5%, Hong Kong's Hang Seng: +0.4%, China's Shanghai Composite: +0.3%, India's Sensex: -0.9%, South Korea's Kospi: +0.1%, Australia's ASX All Ordinaries: +0.2%.
  • In economic data:
    • China's July New Loans CNY260.0 bln (expected CNY1.28 trln; last CNY2.13 trln) and total social financing CNY770.0 bln (expected CNY1.10 trln; last CNY3.30 trln). July Outstanding Loan Growth 8.7% yr/yr (expected 8.8%; last 8.8%)
    • Japan's July PPI 0.3% m/m (last 0.2%); 3.0% yr/yr, as expected (last 2.9%). July Machine Tool Orders 8.4% yr/yr (last 9.7%)
    • South Korea's July Import Price Index 9.8% yr/yr (last 9.6%) and Export Price Index 12.9% yr/yr (lats 12.1%)
    • Singapore's Q2 GDP 0.4% qtr/qtr, as expected (last 0.4%); 2.9% yr/yr, as expected (last 3.0%)
    • Australia's August Westpac Consumer Sentiment 2.8% (expected 0.5%; last -1.1%). Q2 Wage Price Index 0.8% qtr/qtr (expected 0.9%; last 0.9%); 4.1% yr/yr (last 4.1%)
    • New Zealand's June Visitor Arrivals -0.2% m/m (last 4.0%)
  • In news:
    • Japan's PPI increased 3.0% yr/yr in July representing the fastest growth rate in a year.
    • Japan will hold a special session of parliament next Friday to discuss the Bank of Japan's rate hike.
• Major European indices trade in the red. STOXX Europe 600: -0.2%, Germany's DAX: UNCH, U.K.'s FTSE 100: -0.2%, France's CAC 40: -0.3%, Italy's FTSE MIB: -0.3%, Spain's IBEX 35: +0.3%.
  • In economic data:
    • Eurozone's August ZEW Economic Sentiment 17.9 (expected 35.4; last 43.7)
    • Germany's August ZEW Economic Sentiment 19.2 (expected 32.6; last 41.8) and ZEW Current Conditions -77.3 (last -68.9)
    • U.K.'s June Average Earnings Index + Bonus 4.5% yr/yr (last 5.7%). July Claimant Count change 135,000 (expected 14,500; last 36,200). June three-month employment change 97,000 (last 19,000), and June Unemployment Rate 4.2% (expected 4.5%; last 4.4%)
    • Spain's July CPI -0.5% m/m, as expected (last 0.4%); 2.8% yr/yr, as expected (last 3.4%). July Core CPI 2.8% yr/yr, as expected (last 3.0%)
  • In news:
    • The U.K. reported an unexpected decrease in the unemployment rate for June, calling additional rate cuts into question.
    • Grocery store inflation in the U.K. accelerated for the first time since March 2023.
    • Germany's Economy Minister Habeck said that rate cuts from the European Central Bank will help the construction industry.
    • Economists from Germany's ZEW noted that economic expectations remain pressured by high uncertainty.