Stock Market Update

The S&P 500 futures are down nine and are trading 0.2% below fair value, the Nasdaq 100 futures are down 28 points and are trading 0.1% below fair value, and the Dow Jones Industrial Average futures are down 43 points and are trading 0.1% below fair value.

There's a slightly negative bias in early trading, but stock futures are mostly flat. The major indices are sitting on solid gains for the week heading into the session. 

Participants receive more market-moving data today in the form of July Housing Starts and Building Permits at 8:30 ET, followed by the preliminary August University of Michigan Consumer Sentiment survey at 10:00 ET.

Treasury yields are lower in front of the reports. The 10-yr note yield is down six basis points to 3.87% and the 2-yr note yield is down six basis points to 4.04%.

Elsewhere, commodity futures are trading lower. WTI crude oil futures are down 2.7% to $74.90/bbl, natural gas futures are down 1.3% to $2.17/mmbtu, and copper futures are down 0.9% to $4.11/lbs.

In corporate news:

• Applied Materials (AMAT 207.11, -4.72, -2.2%): beats by $0.09, beats on revs; guides Q4 EPS in-line, revs in-line
• Estee Lauder (EL 93.59, -1.55, -1.6%): downgraded to Neutral from Buy at Bank of America
• Amcor (AMCR 10.47, -0.38, -3.5%): beats by $0.01, misses on revs; guides FY25 EPS in-line
• Coherent (COHR 73.50, +2.22, +3.1%): beats by $0.01, beats on revs; guides Q1 EPS in-line, revs in-line
• Microchip Technology (MCHP 83.37, +2.07, +2.6%): upgraded to Overweight from Neutral at Piper Sandler

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region ended Friday on a higher note, following form with the positive bias seen in the U.S. market on Thursday when pleasing initial claims and retail sales data calmed hard-landing concerns. Japan's Nikkei: +3.6% (+8.5% for the week), Hong Kong's Hang Seng: +1.9% (+2.0% for the week), China's Shanghai Composite: +0.1% (+0.6% for the week), India's Sensex: +1.7% (+0.9% for the week), South Korea's Kospi:+2.0% (+4.2% for the week), Australia's ASX All Ordinaries: +1.3% (+2.5% for the week).
  • In economic data:
    • Japan's foreign investment in Japanese stocks JPY521.9B (last -JPY643.7B); June Tertiary Industry Activity Index -1.3% m/m (expected 0.3%; last 0.6%)
    • South Korea's July exports 13.9% yr/yr (last 13.9%) and imports 10.5% yr/yr (last 10.5%)
    • Hong Kong's Q2 GDP 0.4% qtr/qtr (expected 0.4%; last 2.3%) and 3.3% yr/yr (last 3.3%); July unemployment rate 3.0% (last 3.0%)
    • New Zealand's July Business NZ PMI 44.0 (last 41.1); Q2 PPI input 1.4% qtr/qtr (expected 0.5%; last 0.7%) and Q2 PPI output 1.1% qtr/qtr (expected 0.6%; last 0.9%)
  • In news:
    • Japan's Nikkei (+3.6%) was a standout, surging on the back of a strong showing from semiconductor components. Friday's rally by the Nikkei resulted in the best weekly showing since April 2020.
    • Australia's All Ordinaries (+1.3%) came along for the equity market ride despite RBA Governor Bullock pouring cold water on the idea of a near-term rate cut.
    • PBOC Governor Pan said China will gradually shift away from quantitative targets and place a greater emphasis on the use of price-based tools like interest rates, according to Xinhua.
    • Thailand's Parliament elected Paetongtarn Shinawatra to be prime minister. At 37, she will be the youngest prime minster ever elected in Thailand.
• Major European indices are mostly higher with modest gains, drafting off the upside momentum seen Thursday in the U.S. market. STOXX Europe 600: +0.3%, Germany's DAX: +0.6%, U.K.'s FTSE 100: -0.5%, France's CAC 40: +0.2%, Italy's FTSE MIB: +2.0%, Spain's IBEX 35: +0.3%.
  • In economic data:
    • Eurozone's June Trade Balance EUR22.3 bln (expected EUR13.3 bln; last EUR14.0 bln)
    • U.K.'s July Retail Sales 0.5% m/m (expected 0.6%; last -0.9%) and 1.4% yr/yr (expected 1.4%; last -0.3%)
    • Switzerland's Q2 Industrial Production 7.3% yr/yr (expected -2.9%; last -2.0%)
  • In news:
    • It has been a fairly quiet day of news for European markets.
    • On the economic front, the U.K. saw a nice rebound in retail sales in July while the eurozone registered a larger than expected trade surplus in June.
    • In the corporate sector, German company Bayer has enjoyed a double-digit percentage gain following the news that the 3rd U.S. Circuit Court of Appeals ruled in its favor in the Roundup case.
    • EUR/USD +0.2% to 1.0991.