Stock Market Update

The S&P 500 futures currently trade 95 points below fair value.

Equity indices in the Asia-Pacific region had a poor showing on Tuesday with South Korea's Kospi (-10.0%) being decimated while Japan's Nikkei (-3.6%) also fell sharply from its record high. South Korea's top chipmakers are expected to announce their domestic investment plans on Thursday. MSCI is expected to announce its decision about a potential downgrade to Indonesia's market status tomorrow. The Japanese yen edged up off this year's low against the dollar after it was reported that Japan's Finance Minister Katayama held a lengthy phone call with Treasury Secretary Bessent.

• In economic data:
  • Japan's flash June Manufacturing PMI 54.9 (expected 54.5; last 54.5) and flash June Services PMI 51.8 (last 50.0). April BoJ Core CPI 2.7% yr/yr (last 2.8%)
  • South Korea's June Consumer Confidence 106.6 (last 106.1)
  • Australia's flash June Manufacturing PMI 51.2 (last 50.7) and flash June Services PMI 49.9 (last 48.7)
  • Hong Kong's May CPI 0.0% m/m (last -0.1%); 2.0% yr/yr (last 1.7%)
  • Singapore's May CPI 0.7% m/m (last -0.3%); 1.8% yr/yr (expected 2.0%; last 1.8%) and Core CPI 1.4% yr/yr (expected 1.6%; last 1.4%)
  • India's flash June Manufacturing PMI 54.5 (last 55.0) and flash June Services PMI 57.3 (last 59.8)

---Equity Markets---

• Japan's Nikkei: -3.6%
• Hong Kong's Hang Seng: -1.8%
• China's Shanghai Composite: -1.4%
• India's Sensex: -1.2%
• South Korea's Kospi: -10.0%
• Australia's ASX All Ordinaries: -0.5%

Major European indices trade in the red. Flash June PMI readings from the region's major economies were mixed with roughly half of the readings coming in below 50.0, indicating ongoing contraction in activity. European Central Bank Chief Economist Lane said that he expects energy prices to keep inflation firmly above target into the first half of next year. German Chancellor Merz said that pension reforms will be implemented, including a higher retirement age and no early retirement option without reduction of benefits.

• In economic data:
  • Eurozone's flash June Manufacturing PMI 51.3 (expected 51.6; last 51.6) and flash Services PMI 48.9 (expected 48.6; last 47.7)
  • Germany's flash June Manufacturing PMI 50.0 (expected 50.3; last 50.1) and flash Services PMI 46.8 (expected 49.0; last 48.1)
  • U.K.'s flash June Manufacturing PMI 53.1 (expected 53.5; last 53.9) and flash Services PMI 48.7 (expected 50.1; last 49.3). June CBI Distributive Trends Orders -45 (expected -33; last -41)
  • France's June Business Survey 100 (expected 101; last 102). Flash June Manufacturing PMI 50.7 (expected 50.2; last 49.7) and flash Services PMI 47.4 (expected 45.9; last 44.3)
  • Spain's April trade deficit EUR5.20 bln (last deficit of EUR4.40 bln)

---Equity Markets---

• STOXX Europe 600: -0.8%
• Germany's DAX: -1.0%
• U.K.'s FTSE 100: -0.4%
• France's CAC 40: -0.7%
• Italy's FTSE MIB: -1.4%
• Spain's IBEX 35: -0.9%