Stock Market Update

Equity futures point to a flattish opening this morning after the major averages notched decent gains in yesterday's session following further optimistic developments on the geopolitical front.

Bloomberg reports that while the Strait of Hormuz remains effectively closed to tanker traffic, other aspects of the ceasefire between the U.S. and Iran appear to be holding ahead of discussions this weekend. WTI crude oil is up slightly this morning, trading around the $ 98-per-barrel mark.

The market faces a key test this morning in the form of the March CPI Report (Briefing.com consensus 0.7%), which will be the first real test of whether inflation is broadening beyond energy into the core basket. Analysts are expecting a hotter headline reading due to the recent surge in energy prices, making the core reading (Briefing.com consensus 0.3%), which excludes food and energy, an important gauge of underlying inflation trends and a key determinant of the Fed's policy outlook going forward.

In corporate news:

• Anthropic is mulling artificial intelligence chips, according to Reuters
• Tesla (TSLA 345.50, -0.07, -0.0%) China sales fell 16% in Q1, according to Electrek.
• Taiwan Semiconductor Manufacturing (TSM 373.80, +8.31, +2.3%) reported that March and Q1 revenues both came in above consensus.

Equity indices in the Asia-Pacific region had a solid finish to the week, encouraged by a lack of reports about additional missile strikes in the Middle East. Japan's Nikkei: +1.8%, Hong Kong's Hang Seng: +0.6%, China's Shanghai Composite: +0.5%, India's Sensex: +1.2%, South Korea's Kospi: +1.4%, Australia's ASX All Ordinaries: -0.1%.

In news:

• China's CPI deflated again in March while PPI came in above zero for the first time since late 2022.
• The Bank of Korea left its policy rate at 2.50%, as expected, warning about the risk of higher prices and lower growth resulting from the U.S.-Iran conflict.

In economic data:

• China's March CPI -0.7% m/m (expected -0.2%; last 1.0%); 1.0% yr/yr (expected 1.2%; last 1.3%). March PPI 0.5% m/m (expected 0.4%; last -0.9%)
• Japan's March PPI 0.8% m/m (expected 0.9%; last 0.1%); 2.6% yr/yr (expected 2.4%; last 2.1%). March Bank Lending 4.8% yr/yr (expected 4.4%; last 4.5%)
• Australia's February Building Approvals 29.7% m/m, as expected (last -7.2%); 14.0% yr/yr, as expected (last 15.7%). February Private House Approvals 0.2% m/m, as expected (last 1.1%)
• New Zealand's March Business PMI 53.2 (last 54.8)

Major European indices are seeking a higher finish to the week. STOXX Europe 600: +0.7%, Germany's DAX: +0.9%, U.K.'s FTSE 100: +0.3%, France's CAC 40: +0.6%, Italy's FTSE MIB: +0.7%, Spain's IBEX 35: +0.6%.

In news:

• Germany's economy minister voiced opposition to taxing surplus profits of energy companies but also spoke in favor of measures to offset the impact of high energy prices for consumers.
• Hungary will hold a parliamentary election on Sunday with polls pointing to a tight race.

In economic data:

• Germany's March CPI 1.1% m/m, as expected (last 0.2%); 2.7% yr/yr, as expected (last 1.9%)
• Italy's February Industrial Production 0.1% m/m (expected 0.5%; last -0.6%); 0.5% yr/yr, as expected (last -0.6%)
• Swiss March SECO Consumer Climate -43 (expected -32; last -30)