Stock Market Update

Equity futures are slightly higher this morning amid a fresh wave of earnings reports as the markets await the release of Housing Starts and Building Permits data at 8:30 ET and the Preliminary University of Michigan Consumer Sentiment release at 10:00 ET.

Yesterday's trade saw the market encouraged by an increase in retail sales and a decrease in initial jobless claims, which helped boost the S&P 500 and Nasdaq Composite to fresh record highs.

Tariff headlines have been sparse over the past few days, though Reuters reports that Chinese officials have said that a return to a tariff war with the U.S. is not necessary following successful discussions. 

Fed Governor Waller (voting FOMC member) stated in a speech after yesterday's close that he believes the Fed can cut rates at the July meeting and expects inflation to remain in check.

The House voted to 308-122 to pass the GENIUS act, a bill that addresses cryptocurrency rules and regulations.

In corporate news:

• 3M (MMM 162.99, +3.95, +2.5%): beat Q2 expectations and issued above-consensus EPS guidance for FY25.
• American Express (AXP 320.01, +4.66, +1.5%): beat Q2 EPS expectations and reaffirmed its guidance for FY25.
• Autoliv (ALV 115.00, -1.78, -1.5%): beat Q2 expectations.
• Charles Schwab (SCHW 94.50, +1.40, +1.5%): beat Q2 expectations.
• Regions Financial (RF 24.86, +0.35, +1.4%): beat Q2 expectations.
• Netflix (NFLX 1254.00, -20.17, -1.6%): beat Q2 EPS expectations and issued above-consensus guidance for Q3 and FY25. KGI Securities downgraded the stock to Neutral from Outperform with a $1350 target.

Reviewing overnight developments:

• Asian markets ended mostly higher. Japan's Nikkei -0.2%, Hong Kong's Hang Seng +1.3%, China's Shanghai Composite +0.5% 
  • In economic data:
    • Japan's June National CPI 0.1% m/m (last 0.3%); 3.3% yr/yr (last 3.5%). June National Core CPI 3.3% yr/yr (expected 3.4%; last 3.7%)
    • New Zealand's June Credit Card Spending 0.9% yr/yr (last 2.0%)
  • In news:
    • A weekend election in Japan could result in the ruling LDP losing its majority, which would force the party to form a coalition government with parties that are looking to cut the consumption tax
    • Japan's Prime Minister Ishiba met with U.S. Treasury Secretary Bessent today
    • There is a growing likelihood of a rate cut from the Reserve Bank of Australia after yesterday's jobs report for June included a rising unemployment rate
• Major European indices are little changed. Germany's DAX -0.2%, U.K.'s FTSE UNCH, France's CAC UNCH
  • In economic data:
    • Eurozone's May Current Account surplus EUR32.3 bln (expected surplus of EUR34.8 bln; last surplus of EUR18.6 bln). May Construction Output -1.68% m/m (last 4.29%)
    • Germany's June PPI 0.1% m/m, as expected (last -0.2%); -1.3% yr/yr, as expected (last -1.2%)
  • In news:
    • The EU is proposing a removal of a 10% import duty on U.S. vehicles if President Trump lowers the 25% tariff on EU auto imports below 20%
    • Swedish appliance maker Electrolux reported strong results thanks in part to price hikes in the U.S. due to tariffs, but the company noted that some of its competitors are choosing to absorb the cost of higher tariffs