Stock Market Update

The S&P 500 futures currently trade 23 points above fair value. 

Equity indices in the Asia-Pacific region ended Tuesday on a mostly higher note. Hyundai, Kia, and SK Hynix had a strong showing after U.S. officials confirmed that South Korea's tariff rate has been reduced to 15%. Consumer confidence in Japan reached its highest level since April 2024 in the November reading. China Securities Journal reported that local Chinese governments are buying stakes in listed companies. Honda indicated plans to reorganize its presence in China amid recent political tension between leaders from Japan and China.

• In economic data:
  • Japan's November Monetary Base -8.5% yr/yr, as expected (last -7.8%) and November Household Confidence 37.5 (expected 36.2; last 35.8)
  • South Korea's November CPI -0.2% m/m (expected -0.3%; last 0.3%); 2.4% yr/yr (last 2.4%)
  • Australia's October Building Approvals -6.4% m/m (expected -4.3%; last 11.1%); -1.8% yr/yr (expected 12.4%; last 14.9%). Q3 Current Account deficit AUD16.6 bln (expected deficit of AUD13.2 bln; last deficit of AUD16.2 bln). Q3 Net Exports Contribution -0.1% qtr/qtr (last 0.1%). October Private House Approvals -2.1% (last 3.2%)
  • New Zealand's Q3 Terms of Trade Index -2.1% qtr/qtr (expected 0.3%; last 4.2%)

---Equity Markets---

• Japan's Nikkei: UNCH
• Hong Kong's Hang Seng: +0.2%
• China's Shanghai Composite: -0.4%
• India's Sensex: -0.6% 
• South Korea's Kospi: +1.9%
• Australia's ASX All Ordinaries: +0.1%

Major European indices trade in the green. British investors have some concerns that the budget plan that was announced last week will not be realized since it would require additional cuts leading into elections expected in 2029. The Bank of England lowered the systematic capital buffer to 13% from 14% after the latest round of bank stress tests. The Countercyclical Capital Buffer was maintained at 2%. European Central Bank policymaker Kocher said that slight inflationary or disinflationary deviations from target should not trigger policy changes, echoing recent comments from officials who also suggested that policy is in a good place.

• In economic data:
  • Eurozone's flash November CPI -0.3% m/m (last 0.2%); 2.2% yr/yr (expected 2.1%; last 2.1%). November Core CPI -0.5% m/m (last 0.3%); 2.4% yr/yr, as expected (last 2.4%). October Unemployment Rate 6.4% (expected 6.3%; last 6.4%)
  • U.K.'s November Nationwide HPI 0.3% m/m (expected 0.0%; last 0.2%); 1.8% yr/yr (expected 1.4%; last 2.4%)
  • France's October government budget balance -EUR136.2 bln (last deficit of EUR155.4 bln)
  • Spain's November Unemployment Change -18,800 (expected -12,400; last 22,100)
  • Italy's October Unemployment Rate 6.0% (expected 6.1%; last 6.2%). October PPI -0.2% m/m (last 0.2%); 0.1% yr/yr (last 1.1%)

---Equity Markets---

• STOXX Europe 600: +0.3%
• Germany's DAX: +0.4%
• U.K.'s FTSE 100: +0.3%
• France's CAC 40: +0.1%
• Italy's FTSE MIB: +0.2%
• Spain's IBEX 35: +0.7%