Stock Market Update

The S&P 500 futures are up two points and are trading fractionally above fair value, the Nasdaq 100 futures are up five points and are trading fractionally above fair value, and the Dow Jones Industrial Average futures are down 14 points and are trading fractionally below fair value.

Stock futures are little changed as investors wait on the July Consumer Price Index at 8:30 ET. Yesterday's rally in the stock market followed the July Producer Price Index, which showed disinflation in total and core PPI. Treasury yields are unchanged from yesterday ahead of the report. The 10-yr note yield is at 3.83% and the 2-yr note yield sits at 3.93%. 

Other data today include the weekly MBA Mortgage Applications Index, which increased 16.8% as rates fell. The weekly EIA Crude Oil Inventories will be released at 10:30 ET.

In corporate news:

• Alphabet (GOOG 163.79, -2.14, -1.3%): Justice Department considers breaking up Google following court ruling, according to Bloomberg
• Kellanova (K 80.14, +5.61, +7.5%): Mars confirmed it will acquire Kellanova for $83.50/share in cash
• UBS (UBS 30.15, +0.90, +3.1%):  beats by $0.05; beats on revs; provides outlook; says it agreed to sell Credit Suisse's US mortgage servicing business
• Southwest Airlines (LUV 25.80, +0.38, +1.5%): Elliott Investment Management to launch proxy fight, according to WSJ
• Cardinal Health (CAH 108.01, +5.43, +5.3%): beats by $0.10, beats on revs; guides FY25 EPS above consensus

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region ended the midweek session on a mostly higher note. Japan's Nikkei: +0.6%, Hong Kong's Hang Seng: -0.4%, China's Shanghai Composite: -0.6%, India's Sensex: +0.2%, South Korea's Kospi: +0.9%, Australia's ASX All Ordinaries: +0.4%.
  • In economic data:
    • Japan's August Reuters Tankan Index 10 (last 11)
    • South Korea's July Unemployment Rate 2.5% (last 2.8%)
    • India's July WPI Inflation 2.04% yr/yr (expected 2.39%; last 3.36%) and July trade deficit $23.50 bln (last deficit of $20.98 bln)
  • In news:
    • Japan's Prime Minister Kishida said that he will not run in his party's leadership election in September.
    • China conducted a special 20-yr bond auction, which priced at a record low yield.
    • The Reserve Bank of New Zealand unexpectedly lowered its official cash rate by 25 bps to 5.25%, acknowledging that a 50-basis point cut was considered.
• Major European indices trade in the green. STOXX Europe 600: +0.2%, Germany's DAX: +0.4%, U.K.'s FTSE 100: +0.2%, France's CAC 40: +0.3%, Italy's FTSE MIB: +0.7%, Spain's IBEX 35: UNCH.
  • In economic data:
    • Eurozone's flash Q2 GDP 0.3% qtr/qtr, as expected (last 0.3%); 0.6% yr/yr, as expected (last 0.4%). Q2 Employment Change 0.2% qtr/qtr, as expected (last 0.3%); 0.8% yr/yr (last 1.0%). June Industrial Production -0.1% m/m (expected 0.4%; last -0.9%); -3.9% yr/yr (expected -2.9%; last -3.3%)
    • U.K.'s July CPI -0.2% m/m (last 0.1%); 2.2% yr/yr (expected 2.3%; last 2.0%). July Core CPI 0.1% m/m (last 0.2%); 3.3% yr/yr (expected 3.4%; last 3.5%). July Input PPI -0.1% m/m (expected -0.3%; last -0.4%) and Output PPI 0.0% m/m (expected 0.1%; last -0.7%). July House Price Index 2.7% yr/yr (expected 2.6%; last 2.2%)
    • France's July CPI 0.2% m/m (expected 0.1%; last 0.1%); 2.3% yr/yr, as expected (last 2.2%)
  • In news:
    • The U.K. reported cooler than expected inflation for July, giving some renewed hope that the Bank of England will announce another rate cut soon.
    • Travel company TUI noted a strong start to winter bookings for all markets.
    • UBS reported strong results for Q2.