Stock Market Update

Equity futures point to a higher opening this morning as stocks look to add to their recent gains that saw the major averages close at record highs on Friday, marking the ninth consecutive winning week for the S&P 500.

The premarket gains come despite a request from President Trump to amend the deal with Iran, as he has asked for stronger language around Iran's nuclear material. President Trump's request started another round of negotiations, which could last several more days, according to Axios.

Crude oil is currently up $3.04 (+3.5%) to $90.41 per barrel, and Treasuries are modestly higher across the curve. Still, the premarket strength in the stock market indicates that the market does not expect the latest developments to push back expectations for a peace agreement in the near-term.

Futures are also getting a boost from NVIDIA (NVDA 215.99, +4.85, +2.3%), which trades higher in the premarket after announcing the company will expand into personal computer processors.

In corporate news:

• Dell (DELL 425.50, +4.59, +1.1%) introduced a redesigned XPS 13 laptop to compete with Apple (AAPL 309.52, -2.54, -0.8%), according to Bloomberg.
• NVIDIA (NVDA 215.99, +4.85, +2.3%) announced at Taiwan's Computex conference that the company will produce main processors for personal computers.
• Taylor Morrison Home (TMHC 71.75, +13.25, +22.7%) is set to be acquired by Berkshire Hathaway (BRK.B 473.39, -1.09, -0.2%) for $72.50 per share.

Reviewing overnight developments:

Equity indices in the Asia-Pacific region began the week on a mixed note with Japan's Nikkei (+0.9%) and South Korea's Kospi (+3.7%) setting fresh record highs. Japan's Nikkei: +0.9%, Hong Kong's Hang Seng: +0.9%, China's Shanghai Composite: -0.3%, India's Sensex: -0.7%, South Korea's Kospi: +3.7%, Australia's ASX All Ordinaries: +0.1%.

In news:

• Japan reported much weaker than expected capital spending for Q1, fueling speculation that Q1 GDP reading will be revised down, though the market continues expecting a rate hike from the Bank of Japan in the near future.
• China's official PMI readings for May essentially reflected a standstill in activity while Australia's Manufacturing PMI expanded for the second consecutive month and Japan's reading expanded for the fifth month in a row.

In economic data:

• China's May Manufacturing PMI 50.0 (expected 50.2; last 50.3) and Non-Manufacturing PMI 50.1 (expected 49.5; last 49.4). RatingDog Manufacturing PMI 51.8 (expected 51.4; last 52.2)
• Japan's Q1 Capital Spending 0.0% qtr/qtr (expected 4.1%; last 6.5%). May Manufacturing PMI 54.5, as expected (last 55.1)
• South Korea's May trade surplus $26.95 bln (expected surplus of $24.30 bln; last surplus of $23.76 bln). May Imports 20.8% yr/yr (expected 21.5%; last 16.7%) and Exports 53.2% yr/yr (expected 48.4%; last 48.0%). May Manufacturing PMI 54.8 (last 53.6)
• Australia's May Manufacturing PMI 50.7 (expected 50.2; last 51.3). May MI Inflation Gauge -0.3% m/m (last 0.6%) and May ANZ Job Advertisements 1.8% m/m (last -0.6%). May Commodity Prices 16.8% yr/yr (last 15.1%)
• India's May Manufacturing PMI 55.0 (expected 54.3; last 54.7)

Major European indices trade on a mostly lower note while Germany's DAX (+0.3%) outperforms with technology stocks contributing to the outperformance. STOXX Europe 600: -0.2%, Germany's DAX: +0.3%, U.K.'s FTSE 100: -0.2%, France's CAC 40: UNCH, Italy's FTSE MIB: -0.1%, Spain's IBEX 35: -0.3%.

In news:

• Final May Manufacturing PMI readings from the region showed minimal expansion in Germany's reading (50.1) while the U.K.'s reading (53.9) recorded a four-year high.
• European Central Bank policymaker Schnabel lamented high energy prices while policymaker Pereira repeated that the central bank should act sooner rather than later, contributing to speculation that a rate hike will be announced this month.

In economic data:

• Eurozone's May Manufacturing PMI 51.6 (expected 51.4; last 52.2). April Unemployment Rate 6.3% (expected 6.2%; last 6.3%). April Private Sector Loans 3.0% yr/yr, as expected (last 3.0%), and loans to nonfinancials 3.4% yr/yr (expected 3.1%; last 3.2%)
• Germany's April Retail Sales -0.3% m/m (expected -0.4%; last -0.3%); -0.3% yr/yr (last 2.7%). May Manufacturing PMI 50.1 (expected 49.9; last 51.4)
• U.K.'s May Nationwide HPI -0.6% m/m (expected -0.1%; last 0.4%); 1.7% yr/yr (last 3.0%). May Manufacturing PMI 53.9 (expected 53.7; last 53.7)
• France's May Manufacturing PMI 49.7 (expected 48.9; last 52.8)
• Italy's May Manufacturing PMI 52.9 (expected 52.0; last 52.1)
• Spain's May Manufacturing PMI 51.2 (expected 53.7; last 51.7)
• Swiss Q1 GDP 0.7% qtr/qtr (expected 0.5%; last 0.2%); 0.5% yr/yr (last 1.0%). April Retail Sales 1.6% yr/yr (expected 0.2%; last 1.3%). May Manufacturing PMI 57.3 (expected 54.0; last 54.5)