Stock Market Update

The S&P 500 futures trade 63 points below fair value.

Equity indices in the Asia-Pacific region began the week on a mostly lower note amid some pressure on overall sentiment after Moody's lowered the U.S. credit rating to Aa1 from Aaa. There is some speculation that the People's Bank of China could lower its loan prime rate tomorrow. Japan's Prime Minister Ishiba repeated that current tariff levels are unacceptable and that he is looking for a "win-win" trade agreement with the U.S. The comments were made ahead of this week's visit to Washington by Japan's top trade negotiator.

• In economic data:
  • China's April Industrial Production 6.1% yr/yr (expected 5.7%; last 7.7%), April Retail Sales 5.1% yr/yr (expected 6.0%; last 5.9%), and April Fixed Asset Investment 4.0% yr/yr (expected 4.4%; last 4.2%). April House Prices -4.0% yr/yr (last -4.5%) and April Unemployment Rate 5.1% (expected 5.2%; last 5.2%)
  • New Zealand's Q1 Input PPI 2.9% qtr/qtr (expected 0.2%; last -0.9%) and Output PPI 2.1% qtr/qtr (expected 0.1%; last -0.1%)

---Equity Markets---

• Japan's Nikkei: -0.7%
• Hong Kong's Hang Seng: -0.1%
• China's Shanghai Composite: UNCH
• India's Sensex: -0.3%
• South Korea's Kospi: -0.9%
• Australia's ASX All Ordinaries: -0.6%

Major European indices are starting the week on a mostly lower note after Moody's downgraded the credit rating of the U.S. on Friday evening. In addition, China reported below-consensus retail sales growth for April (5.1% yr/yr; expected 6.0%), serving as a reminder of weak consumption, which is weighing on European producers of luxury goods. The European Commission lowered its 2025 growth forecast for the eurozone to 0.9% from 1.3% while the outlook for 2026 was cut to 1.4% from 1.6%. European Central Bank policymaker Wunsch said that the ECB may have to cut rates below 2.00%, but also said that he does not expect a 50-basis point cut at this time.

• In economic data:
  • Eurozone's April CPI 0.6% m/m, as expected (last 0.6%); 2.2% yr/yr, as expected (last 2.2%). April Core CPI 1.0% m/m, as expected (last 1.0%); 2.7% yr/yr, as expected (last 2.4%)
  • Spain's March trade deficit EUR5.48 bln (last deficit of EUR3.42 bln)

---Equity Markets---

• STOXX Europe 600: -0.6%
• Germany's DAX: +0.1%
• U.K.'s FTSE 100: -0.6%
• France's CAC 40: -0.7%
• Italy's FTSE MIB: -1.8%
• Spain's IBEX 35: -0.1%