Stock Market Update

The S&P 500 futures trade 20 points below fair value.

Equity indices in the Asia-Pacific region ended the week on a lower note. Japan's top trade negotiator is visiting Washington today and there was speculation that an announcement about a trade agreement could be made shortly after Wall Street closes for the day. Japan reported a sizable batch of data, which included hotter-than-expected Tokyo core CPI (3.6%; expected 3.5%) and above-consensus retail sales growth for April (3.3%; expected 2.9%). Toyota is planning a 10% yr/yr increase to its global output for Q3.

• In economic data:
  • Japan's May Tokyo CPI 3.4% (last 3.4%) and Tokyo Core CPI 3.6% y/yr (expected 3.5%; last 3.4%). April Unemployment Rate 2.5%, as expected (last 2.5%). April Industrial Production -0.9% m/m (expected -1.4%; last 0.2%), April Retail Sales 3.3% yr/yr (expected 2.9%; last 3.1%), April Housing Starts -26.6% yr/yr (expected -18.2%; last 39.1%) and Construction Orders 52.7% yr/yr (last 3.5%)
  • South Korea's April Industrial Production -0.9% m/m (expected 0.5%; last 2.9%); +4.9% yr/yr (expected 4.2%; last 5.3%). April Retail Sales -0.9% m/m (last -1.0%), April Service Sector Output -0.1% m/m (last -0.3%)
  • India's Q4 quarterly GDP 7.4% yr/yr (expected 6.7%; last 6.2%); annual GDP 6.5% (last 8.2%)
  • Australia's April Building Approvals -5.7% m/m (expected 3.1%; last -7.1%); 5.1% yr/yr (last 11.1%). April Private Sector Credit 0.7% m/m (expected 0.5%; last 0.5%), April Housing Credit 0.5% m/m (last 0.4%), and April Retail Sales -0.1% m/m (expected 0.3%; last 0.3%)
  • New Zealand's April Building Consents -15.6% m/m (last 10.7%)

---Equity Markets---

• Japan's Nikkei: -1.2% (+2.2% for the week)
• Hong Kong's Hang Seng: -1.2% (-1.3% for the week)
• China's Shanghai Composite: -0.9% (UNCH for the week)
• India's Sensex: -0.2% (-0.3% for the week)
• South Korea's Kospi: -0.8% (+4.1% for the week)
• Australia's ASX All Ordinaries: +0.3% (+0.9% for the week)

Major European indices trade in the green. Flash May CPI readings from Italy and Spain were slightly cooler-than-expected while Germany's full CPI report will be released at 8:00 ET. European Central Bank policymaker Panetta said that there is reduced room to cut rates, but the macroeconomic outlook remains weak and could be worsened by trade tensions. Bank of England policymaker Taylor spoke in favor of lower rates, saying that downside risks are building.

• In economic data:
  • Eurozone's April Private Sector Loans 1.9% yr/yr (expected 1.8%; last 1.7%)
  • Germany's April Retail Sales -1.1% m/m (expected 0.2%; last 0.9%); 2.3% yr/yr (expected 1.8%; last 1.3%). Flash May CPI 0.1% m/m, as expected (last 0.4%); 2.1% yr/yr (expected 2.0%; last 2.1%)
  • Italy's Q1 GDP 0.3% qtr/qtr, as expected (last 0.2%); 0.7% yr/yr (expected 0.6%; last 0.5%). Flash May CPI 0.0% m/m (expected 0.1%; last 0.1%); 1.7% yr/yr, as expected (last 1.9%). April PPI -2.2% m/m (last -2.4%); 2.6% yr/yr (last 3.9%)
  • Spain's flash May CPI 0.0% m/m (expected 0.1%; last 0.6%); 1.9% yr/yr (expected 2.1%; last 2.2%). May Core CPI 2.1% yr/yr (last 2.4%). March Current Account surplus EUR1.42 bln (last EUR2.31 bln)
  • Swiss May KOF Leading Indicators 98.5 (expected 98.3; last 97.1)

---Equity Markets---

• STOXX Europe 600: +0.3% (+0.7% week-to-date)
• Germany's DAX: +0.5% (+2.0% week-to-date)
• U.K.'s FTSE 100: +0.5% (+0.5% week-to-date)
• France's CAC 40: +0.1% (+0.7% week-to-date)
• Italy's FTSE MIB: +0.5% (-0.1% week-to-date)
• Spain's IBEX 35: +0.2% (+0.4% week-to-date)