Stock Market Update

The S&P 500 futures currently trade 16 points above fair value. 

Equity indices in the Asia-Pacific region finished mostly higher Tuesday, with South Korea's Kospi continuing its wild swings on the volatility of its leading semiconductor components, Samsung Electronics and SK Hynix. Today's move featured upside volatility as the Kospi surged 6.2%. Notably, South Korean President Lee remarked that the stock market is "quite unstable." That move and that comment precede a BOK rate decision on Thursday that is expected to produce a rate hike to help quell inflation. Elsewhere, China had a data dump that featured stronger-than-expected retail sales and industrial production for June.

• In economic data:
  • China's June Retail Sales 1.0% yr/yr (-0.1% expected; prior -0.6%); June Industrial Production 5.3% yr/yr (4.7% expected; prior 4.5%); June Fixed Asset Investment -5.7% yr/yr (-5.0% expected; prior -4.1%); Q2 GDP 0.9% qtr/qtr (0.9% expected; prior 1.3%) and 4.7% year-to-date (4.5% expected; prior 5.0%); June House Prices -3.3% yr/yr (prior -3.5%); June Unemployment Rate 5.0% (5.1% expected; prior 5.1%); June New Loans CNY1610.0 bln (CNY1950.0 bln expected; prior CNY520.0 bln)
  • Japan's July Reuters Tankan Index 13 (prior 13); May Core Machinery Orders -12.4% m/m (-4.2% expected; prior 8.7%) and -1.9% yr/yr (12.9% expected; prior 15.6%); May Tertiary Industry Activity Index -1.4 (prior -11.1)
  • South Korea's June Imports 30.0% yr/yr (30.1% expected; prior 20.7%) and Exports 70.7% yr/yr (70.9% expected; prior 53.4%); June Unemployment Rate 2.7% (prior 2.8%)

---Equity Markets---

• Japan's Nikkei: +1.5%
• Hong Kong's Hang Seng: +1.4%
• China's Shanghai Composite: -0.3%
• India's Sensex: +0.2%
• South Korea's Kospi: +6.2%
• Australia's ASX All Ordinaries: +0.4%

Major European indices are mostly lower, taking stock of increased hostilities between the U.S. and Iran that have led to the restoration of the U.S. blockade of Iranian vessels and supply worries that have pushed up oil prices. Brent crude futures are up 1.1% to $85.67/bbl, feeding inflation worries that are driving up sovereign bond yields that have acted as a headwind for stocks. Conversely, ASML (ASML) made it clear with its Q3 and full-year guidance that AI and the demand for semiconductors are acting as a big tailwind for its business.

• In economic data:
  • Eurozone's May Industrial Production -0.2% m/m (0.3% expected; prior 0.3%) and -1.2% yr/yr (-0.5% expected; prior 0.4%)
  • Spain's June CPI 0.6% m/m (0.6% expected; prior 0.1%) and 3.2% yr/yr (3.2% expected; prior 3.2%) and core CPI 2.9% yr/yr (2.9% expected; prior 3.0%)

---Equity Markets---

• STOXX Europe 600: +0.2%
• Germany's DAX: -0.5%
• U.K.'s FTSE 100: -0.1%
• France's CAC 40: +0.1%
• Italy's FTSE MIB: -0.4%
• Spain's IBEX 35: -0.5%