Stock Market Update

The S&P 500 futures currently trade 15 points below fair value.

Equity indices in the Asia-Pacific region came under selling pressure Thursday, mirroring the weakness seen in the U.S. market on Wednesday that was led by the mega-cap stocks and technology sector. Markets in Japan and South Korea saw weakness in the tech stocks act as a primary drag, while regional weakness was also an offshoot of concerns about stubbornly high oil prices and the USTR proposal to increase tariffs due to forced labor. Japan and South Korea were also digesting chatter about potential intervention to support weakening currencies. BOJ Governor Ueda, in a speech, spoke of inflation risks, which in turn increased speculation that the central bank will increase its policy rate this month.

• In economic data:
  • Australia's April Trade Balance A$1.791 bln (expected (A$1.230 bln; last A$-1.024 bln); Exports 7.2% m/m (last -2.5%) and Imports 0.8% (last 12.2%)
  • Hong Kong's May CPI 0.2% m/m (expected 0.3%; last 0.3%) and 0.6% yr/yr (expected 0.8%; last 0.6%); May Unemployment Rate 3.0% (expected 3.0%; last 3.0%)

---Equity Markets---

• Japan's Nikkei: -1.4%
• Hong Kong's Hang Seng: -1.5%
• China's Shanghai Composite: -0.6%
• India's Sensex: flat
• South Korea's KOSPI: -1.8%
• Australia's All Ordinaries: -1.1%

Major European bourses have traded in mixed fashion on Thursday, handcuffed somewhat by the ongoing conflict between the U.S. and Iran that has kept oil prices and inflation risks elevated. Markets are also feeling some carryover selling pressure within the technology space, as investors look to take some money off the table following a big run. Not much in the way of notable economic news to move the market. Construction PMI readings for May were improved from last month but still below 50.0, which is the demarcation line between expansion and contraction.

• In economic data:
  • Eurozone's May HCOB Construction PMI 43.7 (last 41.7); April Retail Sales -0.4% m/m (expected -0.3%; last 0.8%) and 1.0% yr/yr (expected 0.3%; last 2.1%)
  • Germany's May HCOB Construction PMI 42.4 (last 42.1)
  • France's May HCOB Construction PMI 39.6 (last 38.1)
  • Italy's May HCOB Construction PMI 49.4 (last 44.8)
  • U.K.'s May S&P Global Construction PMI 38.2 (expected 40.4; last 39.7)
  • Spain's April Industrial Production 2.0% yr/yr (expected 2.0%; last 1.9%)

---Equity Markets---

• STOXX Europe 600: +0.3%
• Germany's DAX Index: +0.6%
• U.K.'s FTSE 100: -0.1%
• France's CAC 40: +1.2%
• Italy's FTSE MIB: +0.1%
• Spain's IBEX 35: +0.8%