Stock Market Update

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

Equity indices in the Asia-Pacific region began the week on a mostly higher note with Japan's Nikkei (+1.4%) and South Korea's Kospi (+2.2%) reaching fresh records. There was some encouragement from news that Iran presented a proposal to restore traffic through the Strait of Hormuz, but it is unclear if the U.S. will accept the offer. South China Morning Post reported that the Chinese government has developed a cheaper all-iron battery for renewable energy storage. Japan's Prime Minister Takaichi said that Japan has secured a stable supply of oil into next year. The Bank of Japan will release its latest policy statement overnight, but a rate hike is not expected at this time.

• In economic data:
  • China's March Industrial Profit 15.5% YTD (last 15.2%)
  • Japan's February Leading Index 113.3 (expected 112.4; last 112.0) and Coincident Indicator -1.8% m/m (expected -1.6%; last 3.4%)
  • Singapore's March Industrial Production 4.7% m/m (last -1.2%); 10.1% yr/yr (last 3.3%)

---Equity Markets---

• Japan's Nikkei: +1.4%
• Hong Kong's Hang Seng: -0.2%
• China's Shanghai Composite: +0.2%
• India's Sensex: +0.8%
• South Korea's Kospi: +2.2%
• Australia's ASX All Ordinaries: -0.2%

Major European indices are starting the week on a higher note with some encouragement from indications that U.S.-Iran negotiations are continuing despite the lack of an in-person meeting over the weekend. Expectations for rate hikes from the European Central Bank and the Bank of England are on the rise due to elevated energy prices. Banks in the U.K. are preparing for higher taxes if Prime Minister Starmer is replaced by someone leaning farther to the left. Standard & Poor's reaffirmed Greece's BBB rating with a Stable outlook while Germany's AAA rating was also affirmed.

• In economic data:
  • Germany's May GfK Consumer Climate -33.3 (expected -30.2; last -28.1)
  • U.K.'s April CBI Distributive Trades Survey -68 (expected -42; last -52)

---Equity Markets---

• STOXX Europe 600: unch
• Germany's DAX: +0.9%
• U.K.'s FTSE 100: -0.3%
• France's CAC 40: +0.1%
• Italy's FTSE MIB: +0.2%
• Spain's IBEX 35: +0.3%