Stock Market Update

The S&P 500 futures are up 138 points and are trading 2.7% above fair value, the Nasdaq 100 futures are up 449 points and are trading 2.6% above fair value, and the Dow Jones Industrial Average futures are up 1,151 points and are trading 2.9% above fair value.

Contracts linked to the S&P 500, Nasdaq 100, and Dow industrials are sharply higher. Major equity indices rebounded off session lows yesterday and the upside momentum has continued in a buy-the-dip bid due to stocks being oversold on a short-term basis. 

There's also growing optimism around trade policy contributing to the positive bias. Treasury Secretary Scott Bessent said in a CNBC interview that if countries come back with solid proposals, the U.S. could end up  with some good deals, after that "some part of the tariffs" could stay on. He added that tariff negotiations are a result of inbound calls from 70 countries, not stock market reaction.

Treasury yields are higher, acting as support for equities as some safe-haven buying unwinds. The 10-yr yield is up six basis points to4.22% and the 2-yr yield is up seven basis points to 3.80%.

Earlier, the NFIB Small Business Optimism Survey dropped to 97.4 in March from 100.7.

In corporate news:

• Apple (AAPL 184.06, +2.60, +1.4%): consumers are rushing to buy iPhones before tariffs, according to Bloomberg
• Broadcom (AVGO 162.50, +8.36, +5.5%): announces $10 billion share repurchase authorization
• UnitedHealth (UNH 560.50, +35.80, +6.8%), Humana (HUM 292.00, +37.29, +14.6%), CVS (CVS 69.49, +5.64, +8.8%): Private Medicare plans to get large rate boost from Trump administration next year, according to WSJ
• Levi Strauss (LEVI 14.96, +1.46, +10.8%): beats by $0.10, revs in-line; reaffirms FY25 EPS guidance, revs guidance
• Dave & Buster's (PLAY 16.43, +0.24, +1.5%): beats by $0.02, misses on revs, comparable sales of -9.4%; Provides outlook for FY25, including capex of less than $200 mln

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region ended Tuesday on a sharply higher note, rebounding from the recent tariff slide. Japan's Nikkei: +6.0%, Hong Kong's Hang Seng: +1.5%, China's Shanghai Composite: +1.6%, India's Sensex: +1.5%, South Korea's Kospi: +0.3%, Australia's ASX All Ordinaries: +2.4%.
  • In economic data:
    • Japan's February Current Account surplus JPY2.32 trln (expected JPY2.74 trln; last JPY1.95 trln)
    • South Korea's February Current Account surplus $7.18 bln (last $2.94 bln)
    • Australia's April Westpac Consumer Sentiment -6.0% (last 4.0%). March NAB Business Confidence -3 (last -2) and Business Survey 4 (last 4)
    • New Zealand's Q1 NZIER Business Confidence 19% (last 16%)
  • In news:
    • Japan's Nikkei (+6.0%) outperformed amid reports that a Japanese delegation is on the way to Washington to meet with White House officials in order to discuss a trade deal.
    • Meanwhile, reports from China suggest that the country does not intend to back down from the tariff fight.
    • Samsung's preliminary results for Q1 were ahead of expectations.
    • The Reserve Bank of New Zealand confirmed Christian Hawkesby as acting governor ahead of tomorrow's rate decision, which could be a cut.
• Major European indices are recovering some of their recent losses. STOXX Europe 60: +1.6%, Germany's DAX: +1.9%, U.K.'s FTSE 100: +2.2%, France's CAC 40: +1.6%, Italy's FTSE MIB: +1.7%, Spain's IBEX 35: +1.4%.
  • In economic data:
    • France's February trade deficit EUR7.9 bln (expected deficit of EUR5.4 bln; last deficit of EUR6.5 bln). February Current Account deficit EUR1.9 bln (last deficit of EUR1.3 bln)
  • In news:
    • European Commission President von der Leyen reached out to Chinese officials to discuss trade.
    • European Central Bank policymaker Simkus said that another 25-basis point rate cut is needed this month, but he is still unsure about the June meeting.
    • Italy has reportedly lowered its 2025 growth forecast to 0.6% from 1.2%, setting its outlook for 2026 growth between 0.7% and 0.8%.