Stock Market Update

The S&P 500 futures currently trade 25 points above fair value.

Equity indices in the Asia-Pacific region were mostly higher on Tuesday. Hong Kong's Hang Seng (+1.6%) led the pack, paced by its technology components. The focal point, though, was China's package of economic data that featured better-than-expected Q2 GDP and mixed results for June retail sales, industrial production, and fixed asset investment. Strikingly, the Shanghai Composite (-0.4%) was the lone loser among the major indices, as the Q2 GDP print reportedly tempered the prospect of further fiscal stimulus. In Japan, JGB yields continued their ascent, with the 10-yr reaching its highest levels (1.60%) since October 2008. The 20-yr and 30-yr yields moved to multi-year highs, as market participants expressed their concerns about the LDP possibly losing its ruling coalition in the upper house and ceding such control to opposition parties pushing populist agendas that would lead to more bond issuance. NVIDIA is rallying in pre-market trading after getting approval to resume sales of its H20 AI chip to China.

• In economic data:
  • China's Q2 GDP 1.1% qtr/qtr (expected 0.9%; last 1.2%) and 5.3% YTD (expected 5.1%; last 5.4%); June Industrial Production 6.8% yr/yr (expected 5.6%; last 5.8%); June Retail Sales 4.8% yr/yr (expected 5.2%; last 6.4%); June Fixed Asset Investment 2.8% yr/yr (expected 3.6%; last 3.7%); June Unemployment Rate 5.0% (expected 5.0%; last 5.0%); June House Prices -3.2% yr/yr (last -3.5%)
  • Australia's July Westpac Consumer Sentiment 0.6% (last 0.5%)

---Equity Markets---

• Japan's Nikkei: +0.5%
• Hong Kong's Hang Seng: +1.6%
• China's Shanghai Composite: -0.4%
• India's Sensex: +0.4%
• South Korea's Kospi: +0.4%
• Australia's All Ordinaries: +0.7%

Major European indices are mixed, trading little changed on either side of the unchanged mark. Some hesitation in front of the release of the June CPI report in the U.S., which will drive interest rate and currency markets. Other focal points include reports that the EU is readying countermeasures on the U.S. that will target cars and planes if a deal cannot be struck, Germany seeing a pickup in economic sentiment, and eurozone industrial production being stronger than expected in May. Separately, France's prime minister is advancing a deficit reduction plan that includes tax increases and EUR40 bln of spending cuts that some suggest could spark a government collapse, according to Bloomberg.

• In economic data:
  • Eurozone's May Industrial Production 1.7% m/m (expected 1.1%; last -2.2%) and 3.7% yr/yr (expected 2.9%; last 0.2%); July ZEW Economic Sentiment 36.1 (expected 37.8; last 35.3)
  • Germany's July ZEW Economic Sentiment 52.7 (expected 50.8; last 47.5)
  • Spain's June CPI 0.7% m/m (expected 0.6%; last 0.1%) and 2.3% yr/yr (expected 2.2%; last 2.0%); Core CPI 2.2% (expected 2.2%; last 2.2%)

---Equity Markets---

• STOXX Europe 600: +0.3%
• Germany's DAX: +0.2%
• U.K.'s FTSE 100: +0.2%
• France's CAC 40: +0.1%
• Italy's FTSE MIB: flat
• Spain's IBEX 35: -0.6%