Stock Market Update

The S&P 500 futures currently trade 15 points below fair value.

Equity indices in the Asia-Pacific region were mixed on Monday, taking in the news that President Trump sent letters to Mexico and the EU indicating their tariff rates will jump to 30% starting August 1 if better trade terms cannot be worked out before then. China's trade data for June was another focal point, as it was better than expected on the export side, with activity picking up after the U.S. and China committed to a less onerous tariff/trade framework. China's imports also rose for the first time this year. New loan activity in June was also better than expected. NVIDIA CEO Jensen Huang, ahead of his trip to China, tried to temper concerns about China's military using NVIDIA's chips, according to CNBC. Press reports suggest Japan's LDP ruling coalition could lose its majority following the July 20 Upper House elections. There are also press reports highlighting the possibility that the BOJ could raise its FY25 inflation forecast when it meets July 30-31. 

• In economic data:
  • China's June exports 5.8% yr/yr (expected 5.0%; last 4.8%) and June imports 1.1% yr/yr (expected 1.3%; last -3.4%); June new loans CNY2240.0B (expected CNY 1960.0B; last CNY620.0B)
  • Japan's May core machinery orders -0.6% m/m (expected -1.4%; last -9.1%); May industrial production -0.1% m/m (expected 0.5%; last -1.1%) and capacity utilization 2.0% (last 1.3%)
  • India's June WPI inflation -0.13% yr/yr (expected 0.52%; last 0.39%); June CPI 2.10% yr/yr (expected 2.50%; last 2.82%)
  • Singapore's Q2 GDP 5.6% qtr/qtr (expected 0.7%; last -0.5%) and 4.3% yr/yr (expected 3.5%; last 4.1%)

---Equity Markets---

• Japan's Nikkei: -0.3%
• Hong Kong's Hang Seng: +0.3%
• China's Shanghai Composite: +0.3%
• India's Sensex: -0.3%
• South Korea's Kospi: +0.8%
• Australia's ASX All Ordinaries: -0.1%

Major European indices are mostly lower after President Trump sent a letter to the EU announcing a 30% tariff rate starting August 1 if better trade terms cannot be worked out before then. Losses are relatively contained, as participants cling to the notion that this high tariff rate will be reduced via negotiations; however, Germany's DAX (-1.0%) is a notable underperformer given its export-led economy. European attention has also turned to President Trump's tease that he will be making a significant announcement today with respect to Russia. Reports suggest the president could make offensive-minded weapons made by the U.S. available to Ukraine.

• In economic data:
  • Switzerland's June PPI -0.1% m/m (expected 0.2%; last -0.5%) and -0.7% yr/yr (last -0.7%)

---Equity Markets---

• STOXX Europe 600: -0.3%
• Germany's DAX: -0.9%
• U.K.'s FTSE 100: +0.2%
• France's CAC 40: -0.4%
• Italy's FTSE MIB: -0.1%
• Spain's IBEX 35: -0.2%