Stock Market Update

The S&P 500 futures currently trade 17 points below fair value. 

Equity indices in the Asia-Pacific region had a mostly lower showing on Tuesday with South Korea's Kospi (-2.3%) hitting another record before reversing while Japan's Nikkei (+0.5%) settled at a fresh record high. South Korea's policy chief said that a dividend should be paid to citizens from taxes on AI profits. The Bank of Japan's Summary of Opinions from the April meeting showed that most policymakers remain open to a hike, but the timing of the next increase has become more uncertain. Alphabet will sell yen-denominated bonds with different tenors in multiple tranches. Treasury Secretary Bessent met with top Japanese officials today, repeating that excess volatility in currency markets is undesirable.

• In economic data:
  • Japan's March Household Spending -1.3% m/m (expected 0.6%; last 1.5%); -2.9% yr/yr (expected -1.4%; last -1.8%). March Leading Index 114.5 (expected 114.4; last 113.2) and Coincident Indicator 0.3% m/m (last -1.7%)
  • Australia's April NAB Business Survey 3 (last 6) and NAB Business Confidence -24 (last -29)
  • India's April CPI 3.48% yr/yr (expected 3.80%; last 3.40%)

---Equity Markets---

• Japan's Nikkei: +0.5%
• Hong Kong's Hang Seng: -0.2%
• China's Shanghai Composite: -0.3%
• India's Sensex: -1.9%
• South Korea's Kospi: -2.3%
• Australia's ASX All Ordinaries: -0.4%

Major European indices trade in the red with the U.K.'s FTSE (-0.3%) staying a bit ahead of other markets. British Prime Minister Starmer has repeated that he has no intention to quit even though more than 81 Labour MPs and six cabinet ministers have made public calls for his resignation. Gilts underperformed in overnight trade, sending the 10-yr yield toward 5.35%, a level not seen since July 2008, amid speculation about looser fiscal policy after an eventual leadership change. European Central Bank policymaker Nagel repeated that the base scenario calls for two rate hikes from the central bank.

• In economic data:
  • Eurozone's May ZEW Economic Sentiment -9.1 (expected -21.6; last -20.4)
  • Germany's April CPI 0.6% m/m, as expected (last 1.1%); 2.9% yr/yr, as expected (last 2.7%). May ZEW Economic Sentiment -10.2 (expected -19.2; last -17.2) and ZEW Current Conditions -77.8 (expected -77.5; last -73.7)
  • Italy's March Industrial Production 0.7% m/m (expected 0.2%; last 0.2%); 1.5% yr/yr (last 0.4%)
  • Swiss April PPI 0.8% m/m (expected 0.4%; last 0.2%); -2.0% yr/yr (last -2.7%)

---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: -0.7%
• Spain's IBEX 35: -0.9%