Stock Market Update

Equity futures point to a flattish opening amid a relatively quiet morning for the stock market. There are no economic data releases on the calendar, and this week's slate of earnings releases is just a fraction of the previous several weeks.

Q2 earnings season has largely exceeded expectations, with strong results (particularly across some mega-cap tech names) contributing to the most recent run to record highs. Last week was especially productive for equities, with the major averages all finishing with weekly gains of 3% or wider and the S&P 500 and DJIA notching record highs throughout the week.

This week's primary catalyst comes in the form of the July Consumer Price Index Wednesday morning, with a soft July employment report last week increasing the market's expectations that the Fed may leave rates unchanged at the next meeting.

Additionally, investors will continue to monitor developments on the geopolitical front. President Trump said in an interview that he plans to take a "low-key" approach to Iran, favoring increased economic pressure over additional military strikes, according to Axios.

In corporate news:

• Apple (AAPL 309.95, -3.38, -1.1%) has tested memory chips from China's CXMT, according to The Wall Street Journal.
• Hewlett Packard Enterprise (HPE 56.30, +3.08, +5.8%) was upgraded to Overweight from Equal Weight at Morgan Stanley, with a price target of $69.
• Taiwan Semiconductor Manufacturing (TSM 420.10, +0.06, +0.0%) reported July revenues rose 45% year-over-year.

Reviewing overnight developments:

Equity indices in the Asia-Pacific region began the week on a mostly higher note. Japan's Nikkei: +2.1%, Hong Kong's Hang Seng: +1.1%, China's Shanghai Composite: +0.7%, India's Sensex: +0.1%, South Korea's Kospi: +0.7%, Australia's ASX All Ordinaries: -0.2%.

In news:

• China's CPI deflated again in July, causing a deceleration in the year-over-year rate to just 0.5% from 1.0% in June.
• The Bank of Japan's latest summary of opinions showed overall hawkishness in sentiment among policymakers.
• Japanese investors sold the second-largest monthly amount of Australian bonds in June as rising JGB rates prompted repatriation of foreign investments.
• The Reserve Bank of Australia will meet overnight but a rate hike is not expected at this time.

In economic data:

• China's July CPI -0.1% m/m (expected 0.2%; last -0.3%); 0.5% yr/yr (expected 0.8%; last 1.0%). July PPI 3.5% yr/yr (expected 3.9%; last 4.1%)
• Japan's June Current Account surplus JPY1.40 trln (expected surplus of JPY2.50 trln; last surplus of JPY3.06 trln). July Bank Lending 5.4% yr/yr (expected 5.7%; last 5.7%). July Economy Watchers Current Index 45.7 (expected 44.6; last 44.0)

Major European indices trade just above their flat lines while the U.K.'s FTSE (-0.3%) lags with homebuilders and other consumer names among the laggards. STOXX Europe 600: +0.1%, Germany's DAX: +0.2%, U.K.'s FTSE 100: -0.3%, France's CAC 40: +0.1%, Italy's FTSE MIB: +0.3%, Spain's IBEX 35: +0.2%.

In news:

• Vistry Group is down more than 5% after it was reported that Allianz reduced credit limits on new trading agreements for suppliers of Vistry.
• Distiller Diageo outperforms after cutting its dividend and announcing a cost-savings plan.

In economic data:

• Eurozone's August Sentix Investor Confidence 0.9 (expected -0.7; last -3.1)