Stock Market Update

The stock market is poised for a modestly higher open. Currently, the S&P 500 futures are up 11 points and are trading 0.1% above fair value, the Nasdaq 100 futures are up 25 points and are trading 0.1% above fair value, and the Dow Jones Industrial Average futures are up 58 points and are trading 0.1% above fair value.

Seeing a little bit of carryover momentum from Friday, yet the market is also waiting hopefully for headlines out of today's U.S.-China trade talks in London, which are expected to produce some agreements on relaxing export controls.

Separately, Bloomberg reports that the Senate could release its version of the reconciliation bill soon, with an aim of getting the final bill passed by July 4.

Apple (AAPL) is holding its Worldwide Developers Conference today, an event that will draw plenty of interest and coverage. Other corporate items of note this morning include Qualcomm (QCOM) acquiring Alphawave Semi and Warner Bros. Discovery (WBD) announcing a plan to split into two publicly traded companies.

In U.S. corporate news:

• Apple (AAPL 205.15, +1.23, +0.6%): hosting its Worldwide Developers Conference today
• Meta (META 698.71, +1.15, +0.1%) in discussions to invest $10 bln in Scale AI, according to Bloomberg
• Moelis (MC 58.60, -0.46, -0.8%): Ken Moelis will soon step down as CEO of Moelis, according to The Wall Street Journal
• Qualcomm (QCOM 150.71, +1.47, +1.0%): to acquire Alphawave Semi with an implied enterprise value of ~$2.4 billion
• UnitedHealth (UNH 305.16, +1.95, +0.6%) aiming to exit Latin America in $1 bln deal, according to Reuters
• Warner Bros. Discovery (WBD 10.76, +0.94, +9.6%): announces plans to separate the company into two publicly traded companies

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region started the week on a higher note, cheered by the positive economic implications of the U.S. jobs report and today's meeting in London between the top U.S. and China trade officials, who are expected to focus on export controls. Japan's Nikkei +0.9%; Hong Kong's Hang Seng +1.6%; China's Shanghai Composite +0.4%; India's Sensex +0.3%; South Korea's Kospi +1.6%; and Australia's All Ordinaries closed for holiday.
  • In economic data:
    • China's May CPI -0.2% m/m (last 0.1%) and -0.1% yr/yr (expected -0.2%; last -0.1%); May PPI -3.3% yr/yr (expected -3.1%; last -2.7%); May Trade Surplus CNY743.56B (expected CNY710.0B; last CNY689.99B); Exports 4.8% yr/yr (expected 5.0%; last 8.1%) and imports -3.4% yr/yr (expected -0.9%; last -0.2%)
    • Japan's Q1 GDP 0.0% (expected -0.2%; last 0.6%); GDP Price Index 3.3% (expected 3.2%; last 2.9%); May Bank Lending 2.4% yr/yr (expected 2.3%; last 2.3%); May Economy Watchers Current Index 44.4 (expected 43.8; last 42.6)
  • In news:
    • There were clear signs of the U.S.-China trade standoff in China's May trade balance report. While China's overall exports were up 4.8% yr/yr, its exports to the U.S. were down 34.4%, according to Bloomberg.
    • China also posted another decline in PPI (-3.3% yr/yr) that was the weakest since July 2023.
    • Trade negotiations continue with other countries. Reportedly, progress is being made between the U.S. and India, as U.S. negotiators are extending their stay. Japan still isn't satisfied with the U.S.'s position, but progress is being made, according to lead negotiator Ryosei Akazawa, and South Korea is angling to strike a deal as soon as possible.
• Major European indices are mostly lower, yet overall losses remain modest in scope. STOXX Europe 600 -0.2%; Germany's DAX -0.5%; U.K.'s FTSE 100 -0.2% ; France's CAC 40 -0.2%; Italy's FTSE MIB -0.3%; Spain's IBEX 35 +0.1%.
  • In economic news:
    • There was no economic data of note
  • In news:
    • Comments from several ECB officials, including ECB President Lagarde, make it sound as if the ECB has reached the end of its rate cut cycle.
    • Participants are waiting anxiously for developments out of the U.S.-China trade talks in London.
    • NVIDIA's (NVDA) Jensen Huang said he is going to invest in the U.K., which he described as being in a Goldilocks moment for AI.
    • Qualcomm (QCOM) is acquiring Alphawave IP Group, valuing the company at ~$2.4 billion.
    • Several European markets are closed in observance of Pentecost, so trading volumes are on the lighter side.