Stock Market Update

The S&P 500 futures are up 21 points and are trading 0.4% above fair value, the Nasdaq 100 futures are up 85 points and are trading 0.5% above fair value, and the Dow Jones Industrial Average futures are up 111 points and are trading 0.3% above fair value.

There is a modestly positive bias in the futures trade ahead of today's open. It is rooted partly in hope that the U.S and China will strike some de-escalation parameters at this weekend's trade meeting in Switzerland; however, there is also some festering angst about the ultimate outcome after President Trump, in a Truth Social Post said, "80% tariff on China seems right! Up to Scott B."

That post took some wind out of the futures market, which had been trading at higher levels.

There is no economic data today, but lots of Fedspeak, including from Fed Governor Barr, who said he thinks the tariffs could lead to higher inflation and higher unemployment.

Treasuries are mixed. The 2-yr note yield is down two basis points to 3.87%, and the 10-yr note yield is up two basis points to 4.39%. The U.S. Dollar Index is down 0.3% to 100.38.

In corporate news:

• Affirm (AFRM) beats by $0.02, reports revs in-line; guides Q4 revs in-line; announces an online partnership with Costco
• BP (BP) competitors ran the numbers on possible acquisition of the company, according to FT
• Cloudflare (NET) reports EPS in-line, beats on revs; guides Q2 EPS below consensus, revs in-line; reaffirms FY25 EPS guidance, revs guidance
• Coinbase Global (COIN) beats by $0.01, misses on revs; gives Q2 guidance
• Expedia Group (EXPE) beats by $0.05, reports revs in-line, total gross bookings grew 4%; Issues downside Q2 revenue guidance; Seeing weaker-than-expected travel demand in U.S
• Lyft (LYFT) misses by $0.18, misses on revs; provides Q2 guidance; increasing share repurchase program to $750 million
• Pinterest (PINS) misses by $0.03, reports revs in-line; guides Q2 revs above consensus
• The Trade Desk (TTD) beats by $0.08, beats on revs; guides Q2 revs in-line

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region ended the week on a mixed note. Japan's Nikkei: +1.6%, Hong Kong's Hang Seng: +0.4%, China's Shanghai Composite: -0.3%, India's Sensex: -1.1%, South Korea's Kospi: -0.1%, Australia's ASX All Ordinaries: +0.5%.
  • In economic data:
    • China's April trade surplus $96.18 bln (expected surplus of $97.00 bln; last surplus of $102.64 bln). April Imports -0.2% yr/yr (expected -5.9%; last -4.3%) and Exports 8.1% yr/yr (expected 1.9%; last 12.4%)
    • Japan's March Household Spending 0.4% m/m (expected -0.5%; last 3.5%); 2.1% yr/yr (expected 0.2%; last -0.5%). March Overall Wage Income 2.1% yr/yr (expected 2.4%; last 2.7%) and March Overtime Pay -1.1% yr/yr (last 2.4%). March Leading Index 107.7 (expected 107.4; last 107.9) and Coincident Indicator -1.3% m/m (last 0.9%)
    • South Korea's May Current Account surplus $9.14 bln (last surplus of $7.18 bln)
  • In news:
    • China may alter its real estate rules to prevent developers from listing unfinished properties for pre-sale.
    • China's trade surplus for April was a touch smaller than expected as the country rushed to export products ahead of tariffs.
    • A decrease in exports to the U.S. was offset with higher exports to Asia-Pacific and Europe.
    • Westpac now expects the Reserve Bank of New Zealand to make two rate cuts by July.
• Major European indices are seeking a higher finish to the week with some support from optimism over international trade developments, including a new U.S.-U.K. trade deal framework and upcoming U.S.-China talks. STOXX Europe 600: +0.5%, Germany's DAX: +0.6%, U.K.'s FTSE 100: +0.5%, France's CAC 40: +0.7%, Italy's FTSE MIB: +0.8%, Spain's IBEX 35: +0.4%.
  • In economic data:
    • Italy's March Industrial Production 0.1% m/m (expected 0.4%; last -0.9%); -1.8% yr/yr (last -2.6%)
    • Swiss Q2 SECO Consumer Climate -39 (expected -34; last -21)
  • In news:
    • Bank of England Governor Andrew Bailey expressed hope that the U.S.-U.K. accord could serve as a model for improving trade relations with the EU.
    • Strong corporate earnings also contributed to the positive mood, with British Airways owner IAG reporting a swing to profit as CEO Luis Gallego cited "resilient demand for air travel."