Stock Market Update

The S&P 500 futures currently trade 45 points below fair value. 

Equity indices in the Asia-Pacific region finished the week on a lower note with South Korea's Kospi (-5.5%) deepening its reversal from a record high while the won weakened to a 17-year low against the dollar. South Korea's President Lee will visit France during the G-7 summit between June 15 and 17. The Reserve Bank of India left its policy rate at 5.25%, as expected, and announced that foreign institutional investors will be exempt from capital gains taxes on sales or transfer of government securities. Indonesia will be exempt from some U.S. tariffs, according to its Economic Ministry.

• In economic data:
  • Japan's April Household Spending 1.6% m/m (expected 0.8%; last -1.3%); -0.5% yr/yr (expected -1.5%; last -2.9%). April Overall Wage Income 3.5% yr/yr (expected 3.1%; last 3.1%), and Overtime Pay 4.2% yr/yr (expected 3.2%; last 3.1%). April Leading Index 115.9 (expected 114.4; last 114.0) and Coincident Indicator 1.1% m/m (expected -1.7%; last 0.3%)
  • South Korea's April Current Account surplus $28.29 bln (last surplus of $37.93 bln)
  • Singapore's April Retail Sales 0.3% m/m (last 3.4%); 5.4% yr/yr (last 4.6%)
  • India's Q4 GDP 7.8% (expected 7.2%; last 7.8%)

---Equity Markets---

• Japan's Nikkei: -1.3%
• Hong Kong's Hang Seng: -1.2% 
• China's Shanghai Composite: -0.7% 
• India's Sensex: -0.2% 
• South Korea's Kospi: -5.5% 
• Australia's ASX All Ordinaries: -0.7%

Major European indices are on track for a higher finish to the week. Eurozone's Q1 GDP was revised down to -0.2% from +0.1%, reflecting the first contraction since 2021. France's transportation minister said that there should be no concerns about jet fuel or gasoline supply levels during the summer. The market is all but certain that the European Central Bank will announce a 25-basis point rate hike on Thursday with another hike expected later this year. Ukraine's president sent a letter to Russia's leader, proposing a bilateral meeting to end the war.

• In economic data:
  • Eurozone's Q1 GDP -0.2% qtr/qtr (expected 0.1%; last 0.1%); 0.3% yr/yr (expected 0.8%; last 1.2%). Q1 Employment Change 0.1% qtr/qtr, as expected (last 0.2%); 0.5% yr/yr, as expected (last 0.7%)
  • U.K.'s May Halifax House Price Index -0.1% m/m (expected 0.0%; last -0.1%); 0.5% yr/yr (expected 1.0%; last 0.4%)
  • France's April Industrial Production 0.1% m/m (expected -0.2%; last 1.4%). April trade deficit EUR5.6 bln (expected deficit of EUR6.2 bln; last deficit of EUR6.4 bln) and April Current Account deficit EUR200 mln (last deficit of EUR900 mln)
  • Italy's April Retail Sales 0.0% m/m (expected 0.4%; last 0.8%); 1.6% yr/yr (last 3.8%)

---Equity Markets---

• STOXX Europe 600: +0.1% 
• Germany's DAX: unch 
• U.K.'s FTSE 100: +0.4% 
• France's CAC 40: +0.3%
• Italy's FTSE MIB: -0.2% 
• Spain's IBEX 35: +0.9%