Stock Market Update

The S&P 500 futures are down 29 points and are trading 0.6% below fair value, the Nasdaq 100 futures are down 128 points and are trading 0.7% below fair value, and the Dow Jones Industrial Average futures are down 210 points and are trading 0.6% below fair value.

There's a negative bias in early action on the first trading day of the holiday-shortened week. Pre-open losses in the mega cap space have contributed to the downside bias. The vibe may shift, though, following this morning's economic releases.

The ISM Manufacturing Index for August will be released at 10:00 ET, along with Construction Spending for July. The final S&P Global US Manufacturing PMI for August is released at 9:45 ET. 

The 10-yr note yield is unchanged from Friday at 3.91% and the 2-yr note yield is unchanged at 3.93%.

In corporate news:

• Apple (AAPL 227.68, -1.32, -0.6%): aiming to use organic light emitting diode displays on iPhones in 2025, according to Nikkei
• Tesla (TSLA 216.19, +2.08, +1.0%): aiming to introduce robotaxi at Warner Brothers (WBD) studio, according to Bloomberg
• Intel (INTC 21.80, -0.24, -1.1%): CEO Pat Gelsinger will present cost cutting plan to board of directors later this month, according to WSJ
• Southwest Airlines (LUV 29.76, +0.84, +2.9%): upgraded to Outperform from In Line at Evercore ISI
• Boeing (BA 167.37, -6.37, -3.7%): downgraded to Underweight from Equal Weight at Wells Fargo
• Bank of America (BAC 40.60, -0.15, -0.4%): upgraded to Buy from Hold at Deutsche Bank
• Wells Fargo (WFC 58.62, +0.15, +0.3%): upgraded to Buy from Hold at Deutsche Bank

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region ended Tuesday on a mostly lower note. Japan's Nikkei: UNCH, Hong Kong's Hang Seng: -0.2%, China's Shanghai Composite: -0.3%, India's Sensex: UNCH, South Korea's Kospi: -0.6%, Australia's ASX All Ordinaries: -0.1%.
  • In economic data:
    • South Korea's August CPI 0.4% m/m (expected 0.3%; last 0.3%); 2.0% yr/yr, as expected (last 2.6%)
    • Australia's Q2 Current Account deficit AUD10.7 bln (expected deficit of AUD4.5 bln; last deficit of AUD6.3 bln)
    • New Zealand's Q2 Terms of Trade Index 2.1% qtr/qtr (expected 2.6%; last 5.1%). Q2 Import Prices 3.1% qtr/qtr (expected 0.5%; last -5.1%) and Export Prices 5.2% qtr/qtr (expected 2.8%; last -0.3%)
  • In news:
    • South Korea's inflation returned to the Bank of Korea's 2.0% target, according to the August CPI report.
    • Bank of Japan Governor Ueda reportedly said in a document submitted to the government that more rate hikes are likely if prices and the economy evolve in line with expectations.
    • Some Japanese companies are delaying or cancelling their bond issuance plans ahead of the September policy meeting at the BoJ.
    • China will initiate an anti-dumping investigation into seed oil imports from Canada after Canada implemented a tariff on Chinese electric vehicle imports.
• Major European indices trade in the red. STOXX Europe 600: -0.4%, Germany's DAX: -0.2%, U.K.'s FTSE 100: -0.5%, France's CAC 40: -0.2%, Italy's FTSE MIB: -0.6%, Spain's IBEX 35: -0.6%.
  • In economic data:
    • France's July budget deficit EUR156.8 bln (last deficit of EUR103.5 bln)
    • Spain's August Unemployment Change 21,900 (expected 34,500; last -10,800)
    • Swiss August CPI 0.0% m/m (expected 0.1%; last -0.2%); 1.1% yr/yr (expected 1.2%; last 1.3%). Q2 GDP 0.7% qtr/qtr (expected 0.5%; last 0.5%); 1.8% yr/yr (last 0.6%)
  • In news:
    • France's Finance Minister Le Maire warned that the country's budget deficit ratio to GDP could exceed 5.5%.
    • Volkswagen is planning to close some factories in Germany due to high energy prices and rising competition from China.
    • Sweden's Riksbank is on track for another three rate cuts this year, according to Governor Thedeen.