Stock Market Update

The S&P 500 futures are down 12 points and are trading 0.2% below fair value, the Nasdaq 100 futures are down 63 points and are trading 0.3% below fair value, and the Dow Jones Industrial Average futures are down 179 points and are trading 0.5% below fair value.

Contracts linked to the S&P 500, Nasdaq 100, and Dow industrials are lower after solid gains in the equity market this week. 

There was some hope for de-escalation in the trade war with China amid indications that China could implement tariff exemptions on medical equipment and certain industrial chemicals, similar to what was offered during President Trump's first term.

The 10-yr yield is three basis points lower at 4.28% and the 2-yr yield is unchanged at 3.79%.

In corporate news:

• Alphabet (GOOG 168.82, +7.35, +4.6%): beats by $0.80, beats on revs, Google Advertising revenue up 8.5%, Google Cloud revenue up 28.1%; Authorizes repurchase up to additional $70.0 bln of Class A and Class C shares, increases quarterly dividend by 5%; Could see variability in cloud revenue growth, depending on capacity deployments each quarter
• T-Mobile (TMUS 247.33, -14.85, -5.7%): beats by $0.11, beats on revs
• Gilead Sciences (GILD 102.00, -4.15, -3.9%): beats by $0.03, misses on revs; reaffirms FY25 EPS guidance
• Intel (INTC 19.92, -1.57, 7.4%): beats by $0.12, beats on revs; guides Q2 EPS below consensus, revs below consensus; Applying streamlining approach across the company
• Eastman Chemical (EMN 79.00, -1.82, -2.3%): beats by $0.02, misses on revs; guides Q2 EPS below consensus

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region had a mostly higher finish to the week while markets in Australia and New Zealand were closed for holidays. Japan's Nikkei: +1.9% (+2.8% for the week), Hong Kong's Hang Seng: +0.3% (+2.7% for the week), China's Shanghai Composite: -0.1% (+0.6% for the week), India's Sensex: -0.7% (+0.8% for the week), South Korea's Kospi: +1.0% (+2.5% for the week), Australia's ASX All Ordinaries: HOLIDAY (+1.9% for the week).
  • In economic data:
    • Japan's April Tokyo CPI 3.5% yr/yr (last 2.9%). April Tokyo Core CPI 3.4% yr/yr (expected 3.2%; last 2.4%)
    • Singapore's Q1 URA Property Index 0.8% qtr/qtr (expected 0.6%; last 2.3%). March Industrial Production -3.6% m/m (expected 0.6%; last -2.9%); 5.8% yr/yr (expected 8.1%; last 0.9%)
  • In news:
    • China indicated some willingness to implement tariff exemptions on medical equipment and certain industrial chemicals, similar to what was offered during President Trump's first term.
    • People's Bank of China Governor Pan confirmed that the PBoC will maintain moderately loose policy.
    • China's National People's Congress Standing Committee will meet early next week.
    • Japan's Economy Minister Akazawa repeated that an extra budget is not being planned right now.
    • South Korea will hold technical trade talks with U.S. officials on May 15-16.
• Major European indices are looking for a higher finish to the week. STOXX Europe 600: +0.2% (+2.6% week-to-date), Germany's DAX: +0.7% (+4.8% week-to-date), U.K.'s FTSE 100: +0.1% (+1.7% week-to-date), France's CAC 40: +0.4% (+3.4% week-to-date), Italy's FTSE MIB: +0.9% (+3.2% week-to-date), Spain's IBEX 35: +1.1% (+3.1% week-to-date).
  • In economic data:
    • U.K.'s March Retail Sales 0.4% m/m (expected -0.3%; last 0.7%); 2.6% yr/yr (expected 1.8%; last 2.2%). March Core Retail Sales 0.5% m/m (expected -0.4%; last 0.7%); 3.3% yr/yr (expected 2.2%; last 1.8%). April GfK Consumer Confidence -23 (expected -21; last -19)
    • France's April Business Survey 99 (expected 96; last 96)
  • In news:
    • Companies like French aerospace supplier Safran provided support, reporting strong revenue and expressing confidence in meeting targets, albeit caveated with "excluding any tariff impact," highlighting ongoing business uncertainty.
    • However, conflicting signals persist, as Chinese officials denied Thursday that formal talks were underway, leaving investors wary.
    • While central bank commentary was limited today, policy analyst Pieter Cleppe noted the opportunity for the EU to potentially scrap burdensome green regulations as part of trade negotiations amid U.S. pressure on non-tariff barriers.