Stock Market Update

The S&P 500 futures currently trade 47 points below fair value. 

Equity indices in the Asia-Pacific region ended Thursday on a lower note with South Korea's Kospi (-3.9%) pulling back from its blistering start to 2026. Precious metals had a volatile night, contributing to overall caution among investors. There was some speculation that Japan's Prime Minister Takaichi might not live up to her pledge to cut taxes on food due to worries about the fiscal impact. Expectations for a near-term reserve requirement ratio cut from the People's Bank of China are on the low side, though the potential for a cut in the second quarter remains alive.

• In economic data:
  • Australia's December trade surplus AUD3.373 bln (expected surplus of AUD3.420 bln; last surplus of AUD2.597 bln). December Imports -0.8% m/m (last -0.2%) and Exports 1.0% m/m (last -4.0%)
  • Singapore's December Retail Sales -5.4% m/m (last -0.2%); 2.7% yr/yr (last 6.2%)

---Equity Markets---

• Japan's Nikkei: -0.9%
• Hong Kong's Hang Seng: +0.1%
• China's Shanghai Composite: -0.6%
• India's Sensex: -0.6%
• South Korea's Kospi: -3.9%
• Australia's ASX All Ordinaries: -0.5%

Major European indices trade in the red. Military contractor Rheinmetall has been pressured by weak guidance while shipper Maersk announced that some corporate positions will be cut and confirmed resumption of transit through the Red Sea. The Bank of England voted 5-4 to keep its bank rate at 3.75%, which was expected. The European Central Bank will release its own policy statement at 8:15 ET, but it too is expected to keep policy steady. There has been some speculation that European Central Bank President Lagarde could try to talk down the euro after the single currency reached its highest level against the dollar since mid-2021.

• In economic data:
  • Eurozone's December Retail Sales -0.5% m/m (expected -0.2%; last 0.1%); 1.3% yr/yr (expected 1.6%; last 2.4%)
  • Germany's December Factory Orders 7.8% m/m (expected -1.8%; last 5.7%)
  • U.K.'s January S&P Global Construction PMI 46.4 (expected 42.2; last 40.1)
  • France's December Industrial Production -0.7% m/m (expected 0.2%; last 0.1%)
  • Italy's December Retail Sales -0.8% m/m (expected -0.4%; last 0.5%); 0.9% yr/yr (last 1.3%)

---Equity Markets---

• STOXX Europe 600: -0.4%
• Germany's DAX: -1.2%
• U.K.'s FTSE 100: -0.7%
• France's CAC 40: -0.4%
• Italy's FTSE MIB: -1.2%
• Spain's IBEX 35: -1.8%