Stock Market Update

Equity futures point to a higher opening this morning following an eventful day for the stock market that saw the S&P 500 and Nasdaq Composite notch fresh record highs. Stocks opened to broad losses after another hotter inflation reading, though a rebound in mega-cap and semiconductor stocks largely outweighed the losses at the index level. However, breadth was weaker, and the DJIA finished slightly lower for the day.

The Dow is set to open higher this morning, which is due in part to a sharp premarket gain from Cisco (CSCO 117.40, +15.53, +15.2%) after an impressive beat-and-raise earnings report.

Elsewhere, Cerebras Systems (CBRS) adds to the AI enthusiasm after pricing its IPO at $185 per share, well above the revised $150-$160 dollar range.

On the geopolitical front, the summit between President Trump and Chinese President Xi has yet to deliver any surprises, with both leaders agreeing the Strait of Hormuz should remain a free waterway.

The market has a full slate of economic data on the calendar this morning, which includes weekly initial jobless claims data (Briefing.com consensus 208K) and the Retail Sales report for April (Briefing.com consensus 0.4%).

In corporate news:

• Biogen (BIIB 216.70, +12.17, +6.0%) trades higher in the premarket after announcing compelling topline results from the Phase 2 CELIA study evaluating diranersen - the first study to show reduction in tau pathology and cognitive benefit in patients with early Alzheimer's Disease.
• Cisco (CSCO 117.40, +15.53, +15.2%) beat EPS expectations by $0.03, beat revenue expectations, and guided Q4 EPS and revenues well above consensus.
• NVIDIA (NVDA 230.10, +4.27, +1.9%) H200 chip sales were approved by the U.S. government for ten Chinese companies.

Reviewing overnight developments: 

Equity indices in the Asia-Pacific region had a mixed showing on Thursday with Japan's Nikkei (-1.0%) hitting a fresh record before reversing while South Korea's Kospi (+1.8%) finished at a fresh record high. Japan's Nikkei: -1.0%, Hong Kong's Hang Seng: UNCH, China's Shanghai Composite: -1.5%, India's Sensex: +1.1%, South Korea's Kospi: +1.8%, Australia's ASX All Ordinaries: +0.1%.

In news:

• The U.S. delegation led by President Trump met with Chinese leadership today.
• Today's discussions were reportedly pleasant with the two sides aiming to build a constructive relationship of strategic stability.
• Japan sold 30-yr JGBs to solid demand and a Bank of Japan policymaker said that a rate hike should happen as quickly as possible.
• South Korea's President Lee requested a bilateral currency swap line with the U.S. Treasury.

In economic data:

• China's April New Loans -CNY10.0 bln (expected CNY320.0 bln; last CNY2.99 trln), April Outstanding Loan Growth 5.6% yr/yr (expected 5.8%; last 5.8%), and April Total Social Financing CNY620.0 bln (expected CNY1.50 trln; last CNY5.23 trln)
• Japan's April M2 Money Stock 2.3% yr/yr (expected 1.9%; last 2.0%)
• India's April WPI Inflation 8.30% yr/yr (expected 4.40%; last 3.88%)

Major European indices trade in positive territory while several smaller markets are closed for Ascension Day. STOXX Europe 600: +0.7%, Germany's DAX: +1.6%, U.K.'s FTSE 100: +0.5%, France's CAC 40: +1.0%, Italy's FTSE MIB: +1.1%, Spain's IBEX 35: +1.0%.

In news:

• Reports from the U.K. indicate that Prime Minister Starmer could face an imminent leadership challenge.
• It is unclear if Chancellor Reeves would maintain her post in the event of a leadership change.
• European Central Bank policymaker Kazaks said that the full impact of the Iran war on inflation is not visible yet and that the situation is a bit worse than the ECB's baseline scenario.

In economic data:

• U.K.'s Q1 GDP 0.6% qtr/qtr, as expected (last 0.2%); 1.1% yr/yr (expected 0.8%; last 1.0%). March GDP 0.3% m/m (expected -0.1%; last 0.4%), March Industrial Production -0.2% m/m, as expected (last 0.3%); 0.0% yr/yr (expected 0.2%; last -0.5%). March Manufacturing Production 1.2% m/m (expected -0.1%; last -0.2%); 1.2% yr/yr (expected 0.0%; last -0.8%). March trade deficit GBP27.22 bln (expected deficit of GBP19.80 bln; last deficit of GBP22.80 bln). Q1 Business Investment 0.7% qtr/qtr (expected 1.1%; last -2.9%); -1.8% yr/yr (last 1.8%)
• Spain's April CPI 0.4% m/m, as expected (last 1.2%); 3.2% yr/yr, as expected (last 3.4%). April Core CPI 2.8% yr/yr, as expected (last 2.9%)