Stock Market Update

The S&P 500 futures currently trade 38 points below fair value.

Equity indices in the Asia-Pacific region ended the week on a mostly lower note while South Korea's Kospi (+0.1%) bucked the trend, inching up to a fresh record high. South Korea's trade officials met with their U.S. counterparts in Washington yesterday, but talks will continue into today. Japan sold 2-yr JGBs to good demand with yield dipping after the auction. Japan's Tokyo CPI decelerated to 1.5% yr/yr in January, representing the first below-target (2.0%) reading since October 2024. The CEO of Indonesia's IDX exchange resigned after this week's volatility that followed MSCI's flagging of Indonesia's stocks for a potential downgrade. Fitch affirmed South Korea's AA- rating with a Stable outlook.

• In economic data:
  • Japan's January Tokyo CPI 1.5% yr/yr (last 2.0%) and January Tokyo Core CPI 2.0% yr/yr (expected 2.2%; last 2.3%). December Retail Sales -0.9% yr/yr (expected 0.7%; last 1.1%) and December Industrial Production -0.1% m/m (expected -0.4%; last -2.7%). December jobs/applications ratio 1.19 (expected 1.18; last 1.18) and December Unemployment Rate 2.6%, as expected (last 2.6%). December Housing Starts -1.3% yr/yr (expected -4.5%; last -8.5%) and Construction Orders 20.2% yr/yr (last 9.5%)
  • South Korea's December Retail Sales 0.9% m/m (last -3.3%). December Industrial Production 1.7% m/m (expected 0.5%; last 0.6%); -0.3% yr/yr (expected -2.1%; last -1.4%)
  • Hong Kong's Q4 GDP 1.0% qtr/qtr (last 0.7%); 3.8% yr/yr (last 3.8%)
  • Australia's Q4 PPI 0.8% qtr/qtr (expected 1.1%; last 1.0%); 3.5% yr/yr (last 3.5%). December Private Sector Credit 0.8% m/m (expected 0.6%; last 0.6%) and Housing Credit 0.7% m/m (last 0.6%)
  • Singapore's December Bank Lending SGD886.1 bln (last SGD873.1 bln)

---Equity Markets---

• Japan's Nikkei: -0.1%
• Hong Kong's Hang Seng: -2.1%
• China's Shanghai Composite: -1.0%
• India's Sensex: -0.4% 
• South Korea's Kospi: +0.1% 
• Australia's ASX All Ordinaries: -0.8%

Major European indices trade in the green with banks contributing to the strength. Appliance manufacturer Electrolux reported strong results for Q4 with help from cost reductions and strong cash flow. Adidas reported record revenue for 2025. Germany's flash CPI for January will be released at 8:00 ET and it is expected to show no month-over-month change with the year-over-year rate accelerating to 2.0% from 1.8% in December.

• In economic data:
  • Eurozone's Q4 GDP 0.3% qtr/qtr (expected 0.2%; last 0.3%); 1.3% yr/yr (expected 1.2%; last 1.4%). December Unemployment Rate 6.2% (expected 6.3%; last 6.3%)
  • Germany's December Import Price Index -0.1% m/m (expected -0.4%; last 0.5%); -2.3% yr/yr (expected -2.6%; last -1.9%). January Unemployment Change 0 (expected 4,000; last 3,000) and January Unemployment Rate 6.3%, as expected (last 6.3%). Q4 GDP 0.3% qtr/qtr (expected 0.2%; last 0.0%); 0.4% yr/yr (expected 0.3%; last 0.3%)
  • U.K.'s December Mortgage Approvals 61,010 (expected 65,000; last 64,070) and Mortgage Lending GBP4.60 bln (expected GBP4.50 bln; last GBP4.59 bln). December Net Lending to Individuals GBP6.10 bln, as expected (last GBP6.60 bln)
  • France's Q4 GDP 0.2% qtr/qtr, as expected (last 0.5%); 1.1% yr/yr (expected 1.2%; last 0.9%). December PPI 0.2% m/m (last 2.8%); -2.0% yr/yr (last -1.5%). Q4 nonfarm payrolls -0.1% qtr/qtr (last 0.0%)
  • Italy's Q4 GDP 0.3% qtr/qtr (expected 0.2%; last 0.1%); 0.8% yr/yr (expected 0.5%; last 0.6%). December Unemployment Rate 5.6% (expected 5.8%; last 5.6%). December PPI -0.7% m/m (last 1.0%); -1.4% yr/yr (last -0.2%)
  • Spain's January CPI -0.4% m/m (expected -0.3%; last 0.3%); 2.4% yr/yr, as expected (last 2.9%). January Core CPI 2.6% yr/yr (last 2.6%). Q4 GDP 0.8% qtr/qtr (expected 0.6%; last 0.6%); 2.6% yr/yr (expected 2.7%; last 2.8%). November Current Account surplus EUR210 mln (last surplus of EUR7.18 bln)
  • Swiss January KOF Leading Indicators 102.5 (expected 103.1; last 103.6)

---Equity Markets---

• STOXX Europe 600: +0.6% 
• Germany's DAX: +0.8% 
• U.K.'s FTSE 100: +0.3%
• France's CAC 40: +0.6%
• Italy's FTSE MIB: +0.8% 
• Spain's IBEX 35: +1.6%