Stock Market Update

The S&P 500 futures currently trade 10 points above fair value.

Equity indices in the Asia-Pacific region had a strong showing on Thursday with Japan's Nikkei (+5.7%) reaching a fresh record after returning from this week's holidays. Berkshire Hathaway has built voting stakes in two of Japan's five trading houses. Japan's officials indicated that they do not agree with the IMF's "rule" that limits the number of interventions in a six-month period. On a related note, top Japanese officials, including Prime Minister Takaichi, are expected to speak with Treasury Secretary Bessent next week. Indonesia is setting up a plan to stabilize its bond market.

• In economic data:
  • Japan's April Monetary Base -11.3% yr/yr (expected -10.5%; last -11.6%) o Australia's March trade deficit AUD1.84 bln (expected surplus of AUD4.38 bln; last surplus of AUD5.026 bln). March Imports 14.1% m/m (last -2.7%) and Exports -2.7% m/m (last 4.2%)

---Equity Markets---

• Japan's Nikkei: +5.7%
• Hong Kong's Hang Seng: +1.6%
• China's Shanghai Composite: +0.5%
• India's Sensex: -0.2%
• South Korea's Kospi: +1.4%
• Australia's ASX All Ordinaries: +1.0%

Major European indices trade with modest losses while U.K.'s FTSE (-0.6%) lags. Today's local elections are expected to be a setback for the Labour government, which has been steadily losing support since taking power in mid-2024. Germany reported strong Factory Orders growth for March (5.0%), fueling hopes for some improvement in the country's struggling manufacturing sector. Airbus received an order for 150 aircraft from AirAsia. Norges Bank unexpectedly increased its policy rate to 4.25% from 4.00% due to inflation while Riksbank left its policy rate at 1.75% but indicated readiness to act.

• In economic data:
  • Eurozone's March Retail Sales -0.1% m/m (expected -0.3%: last -0.3%); 1.2% yr/yr (expected 1.0%; last 1.3%). April Construction PMI 41.7 (last 44.6)
  • Germany's March Factory Orders 5.0% m/m (expected 1.0%; last 1.4%)
  • U.K.'s April Construction PMI 39.7 (expected 45.8; last 45.6)
  • France's March trade deficit EUR6.9 bln (expected deficit of EUR6.7 bln; last deficit of EUR5.5 bln) and March Current Account deficit EUR8.20 bln (last deficit of EUR1.50 bln)
  • Swiss April Unemployment Rate 3.0%, as expected (last 3.0%)

---Equity Markets---

• STOXX Europe 600: -0.2%
• Germany's DAX: -0.1%
• U.K.'s FTSE 100: -0.6%
• France's CAC 40: +0.1%
• Italy's FTSE MIB: -0.1%
• Spain's IBEX 35: +0.3%