Stock Market Update

The S&P 500 futures currently trade 40 points above fair value. 

Equity indices in the Asia-Pacific region had a mostly higher showing on Tuesday with South Korea's Kospi (+8.2%) reclaiming the bulk of its loss from Monday. China reported strong trade figures for May with above-consensus import and export growth. China's government has pushed for increased local bond issuance this month, according to China Securities Journal. There has been some increased focus on the role of growing margin debt in South Korea's chip-fueled rally. Bank Indonesia unexpectedly raised its policy rate by 25 basis points to 5.50%.

• In economic data:
  • China's May trade surplus $105.43 bln (expected $92.10 bln; last $84.80 bln). May Imports 27.4% yr/yr (expected 25.0%; last 25.3%) and Exports 19.4% yr/yr (expected 15.0%; last 14.1%)
  • Japan's May Machine Tool Orders 37.4% yr/yr (last 45.1%)
  • South Korea's Q1 GDP 1.7% qtr/qtr, as expected (last -0.1%); 3.6% yr/yr, as expected (last 1.6%)
  • Australia's June Westpac Consumer Sentiment -2.9% (last 3.5%). May NAB Business Confidence -14 (last -23) and Business Survey 3 (last 3)
  • New Zealand's Q1 Manufacturing Sales Volume 3.6% qtr/qtr (last -0.5%)

---Equity Markets---

• Japan's Nikkei: +2.2%
• Hong Kong's Hang Seng: -0.4%
• China's Shanghai Composite: +1.3%
• India's Sensex: +0.5%
• South Korea's Kospi: +8.2%
• Australia's ASX All Ordinaries: -0.4%

Major European indices are mostly higher while the U.K.'s FTSE (-0.4%) lags with HSBC and Standard Chartered contributing to the weakness. The Confederation of British Industry lowered its domestic growth forecast for 2026 to 1.1% from 1.3% while the outlook for 2027 was reduced to 0.9% from 1.5%. The market remains confident that the European Central Bank will announce a 25-basis point hike on Thursday.

• In economic data:
  • Germany's April trade surplus EUR14.5 bln (expected surplus of EUR15.4 bln; last surplus of EUR14.7 bln). April Imports 1.2% m/m (last 4.5%) and Exports 0.9% m/m (last 0.3%). April Industrial Production 0.4% m/m, as expected (last -0.1%); -0.5% yr/yr (last -3.5%)

---Equity Markets---

• STOXX Europe 600: +0.4%
• Germany's DAX: +0.5%
• U.K.'s FTSE 100: -0.4%
• France's CAC 40: +0.9%
• Italy's FTSE MIB: +1.9%
• Spain's IBEX 35: +1.0%