Stock Market Update

The stock market is on track for a modestly lower opening, with S&P 500 futures down 16 points or 0.3% below fair value.

The projected slower opening comes after yesterday's strong showing in which several mega-cap stocks pushed to new all-time highs, and in turn boosted the S&P 500 and NASDAQ Composite to record highs.

The market awaits the final amendments to the large reconciliation bill, as the Senate continues its "vota-a-rama" with a House vote expected on Wednesday. Republicans are considering lowering the debt ceiling to win the support of Senator Rand Paul. Notably, the bill has been stripped of an amendment that sought to bar state regulation of AI for the next ten years.

In other macro related news, Financial Times reports that the Trump administration is considering narrowing trade deals in order to avoid imposing new tariffs on July 9.

Fed Chairman Powell will take part in a discussion at the European Central Bank's conference in Sintra, Portugal at 9:30 ET.

Today's economic data will include the release of the final S&P Global U.S. Manufacturing PMI (prior 52.0) at 9:45 ET, followed by May Construction Spending (Briefing.com consensus -0.2%; prior -0.4%), May job openings (prior 7.391 mln), and June ISM Manufacturing Index (Briefing.com consensus 48.8%; prior 48.5%) at 10:00 ET.

Treasuries are on track for a higher start with the 10-yr yield falling four basis points to 4.19%.

In U.S. corporate news:

• Tesla (TSLA 299.79, -17.87, -5.7%): Reuters reported that sales in Sweden and Denmark were down in June. Separately, President Trump again threatened to pull back subsidies that benefit the company.
• Progress Software (PRGS 61.45, -2.39, -3.7%): company beat Q2 EPS expectations, raised its revenue guidance for the year, and announced the acquisition of Nuclia.

Reviewing overnight developments:

• Asian markets ended mixed. Japan's Nikkei -1.2%, Hong Kong's Hang Seng CLOSED, China's Shanghai Composite +0.4%
  • In economic data:
    • China's June Caixin Manufacturing PMI 50.4 (expected 49.2; last 48.3)
    • Japan's Q2 Tankan Large Manufacturers Index 13 (expected 10; last 12) and Q2 Tankan All Big Industry Capex 11.5% (last 3.1%). June Manufacturing PMI 50.1 (expected 50.4; last 49.4)
    • South Korea's June trade surplus $9.08 bln (expected $8.40 bln; last $6.93 bln). June Imports 3.3% yr/yr (expected 6.9%; last -5.3%) and Exports 4.3% yr/yr (expected 4.7%; last -1.3%). June Manufacturing PMI 48.7 (last 47.7)
    • India's June Manufacturing PMI 58.4, as expected (last 58.4)
    • Singapore's Q2 URA Property Index 0.5% qtr/qtr (last 0.8%)
    • Australia's June Manufacturing PMI 50.6 (expected 51.0; last 51.0)
    • New Zealand's May Building Consents 10.4% m/m (last -14.6%)
  • In news:
    • South Korea exported a record $15 bln worth of chips in June.
    • Japan's top trade negotiator said that the two sides are still not on the same page regarding some elements of a trade deal.
• Major European indices trade in the red. Germany's DAX -0.5%, U.K.'s FTSE -0.3%, France's CAC -0.3%
  • In economic data:
    • Eurozone's flash June CPI 0.3% m/m (last 0.0%); 2.0% yr/yr, as expected (last 1.9%). June Manufacturing PMI 49.5 (expected 49.4; last 49.4)
    • Germany's June Manufacturing PMI 49.0, as expected (last 48.3). June Unemployment Change 11,000 (expected 18,000; last 33,000) and Unemployment Rate 6.3% (expected 6.4%; last 6.3%)
    • U.K.'s June Manufacturing PMI 47.7, as expected (last 46.4). June Nationwide HPI -0.8% m/m (expected -0.2%; last 0.4%); 2.1% yr/yr (expected 3.3%; last 3.5%)
    • France's June Manufacturing PMI 48.1 (expected 47.8; last 49.8)
    • Italy's June Manufacturing PMI 48.4 (expected 49.5; last 49.2)
    • Spain's June Manufacturing PMI 51.4 (expected 50.6; last 50.5)
    • Swiss June Manufacturing PMI 49.6 (expected 44.2; last 42.1). May Retail Sales 0.0% yr/yr (expected 0.8%; last 0.9%)
  • In news:
    • European Central Bank policymaker Simkus said that the central bank is unlikely to make any changes to rates until later in the year while policymaker de Guindos said that the current euro exchange rate is perfectly acceptable.