Stock Market Update

The S&P 500 futures currently trade 28 points below fair value. 

Equity indices in the Asia-Pacific region ended Wednesday on a mostly higher note with Japan's Nikkei (+1.5%) and South Korea's Kospi (+0.7%) hitting fresh records. Stock exchanges in Beijing and Shenzhen announced that margin ratios will be increased to 100% from 80%. China's trade surplus for December was a bit smaller than expected, but that was owed to imports growing much faster than expected. Export growth also exceeded estimates, though exports to the U.S. were down about 30% yr/yr.

• In economic data:
  • China's December trade surplus $114.10 bln (expected surplus of $114.30 bln; last surplus of $111.68 bln). December Imports 5.7% yr/yr (expected 0.9%; last 1.9%) and Exports 6.6% yr/yr (expected 3.0%; last 5.9%)
  • Japan's January Reuters Tankan Index 7 (last 10) and December Machine Tool Orders 10.6% yr/yr (expected 14.2%; last 16.8%)
  • South Korea's December Import Price Index 0.3% yr/yr (last 1.9%) and Export Price Index 5.5% yr/yr (last 6.8%). December Unemployment Rate 4.0% (last 2.7%)
  • India's December WPI Inflation 0.83% yr/yr (expected 0.30%; last -0.32%)
  • Australia's November Building Approvals 15.2% m/m, as expected (last -6.1%); 20.2% yr/yr, as expected (last -1.8%). November Private House Approvals 1.3% m/m, as expected (last -1.3%)
  • New Zealand's November Building Consents 2.8% m/m (last -0.7%)

---Equity Markets---

• Japan's Nikkei: +1.5%
• Hong Kong's Hang Seng: +0.6%
• China's Shanghai Composite: -0.3%
• India's Sensex: -0.3%
• South Korea's Kospi: +0.7%
• Australia's ASX All Ordinaries: +0.2%

Major European indices trade near their flat lines. European Central Bank policymakers De Guindos and Kazaks said that policy is in a good place with respect to inflation. The Bank of France expects domestic Q4 growth of just 0.2%. Bank of France Governor Villeroy de Galhau warned that France should not exceed a 5% deficit to GDP ratio in 2026. BP acknowledged that it will record a writedown of $4-5 bln in Q4 due to weak performance of its renewables energy unit.

• No data today

---Equity Markets---

• STOXX Europe 600: +0.1%
• Germany's DAX: -0.4%
• U.K.'s FTSE 100: +0.3%
• France's CAC 40: UNCH
• Italy's FTSE MIB: +0.4%
• Spain's IBEX 35: +0.5%