Stock Market Update

The stock market is on track for a modestly higher start with futures on the S&P 500 trading 13 points above fair value.

Equity futures reflect some guarded optimism after the night went by without an additional escalation in the Israel-Iran conflict, though participants will remain on the lookout for potential changes to the fluid situation.

The market is also anticipating the outcome of the Federal Reserve's two-day policy meeting, which will conclude with a policy announcement at 14:00 ET, followed by Fed Chairman Powell's press conference. However, the market has no expectations for a rate cut announcement today.

The market will receive a a couple economic reports at 8:30 ET, including May Housing Starts (Briefing.com consensus 1.356 mln; prior 1.361 mln) and Building Permits (Briefing.com consensus 1.411 mln; prior 1.412 mln) and the latest Initial Claims (Briefing.com consensus 253,000; prior 248,000) and Continuing Claims (prior 1.956 mln). The continuing claims component will be in focus, since last week's reading was the highest since early 2021.

Treasuries are on course for a modestly higher start with the 10-yr yield down two basis points at 4.37%.

In U.S. corporate news:

• Nucor (NUE 125.00, +2.80, +2.3%): company issued above-consensus EPS guidance for Q2.
• Steel Dynamics (STLD 132.00, -1.16, -0.9%): company issued below-consensus EPS guidance for Q2.
• GMS (GMS 76.00, +2.76, +3.8%): company beat Q4 expectations.
• Marvell (MRVL 72.31, +2.32, +3.3%): company made optimistic comments about its expected data center growth rate.

Reviewing overnight developments:

• Asian markets ended mixed. Japan's Nikkei +0.9%, Hong Kong's Hang Seng -1.1%, China's Shanghai Composite UNCH
  • In economic data:
    • Japan's June Reuters Tankan Index 6 (last 8). May trade deficit JPY637.6 bln (expected deficit of JPY893.0 bln; last deficit of JPY115.6 bln). May Imports -7.7% yr/yr (expected -6.7%; last -2.2%) and Exports -1.7% yr/yr (expected -3.8%; last 2.0%). April Core Machinery Orders -9.1% m/m (expected -9.3%; last 13.0%); 6.6% yr/yr (expected 4.0%; last 8.4%)
    • Australia's May MI Leading Index -0.1% m/m (last 0.0%)
    • New Zealand's Q2 Westpac Consumer Sentiment 91.2 (last 89.2). Q1 Current Account deficit NZD2.32 bln (expected deficit of NZD2.19 bln; last deficit of NZD6.80 bln)
  • In news:
    • Japan's Prime Minister Ishiba said that he will seek a trade deal with the U.S. "until the final minute," adding that auto imports are a big point of disagreement.
    • Australia's Prime Minister Albanese will begin negotiations on a security and defense partnership with the EU and he expects to meet with President Trump soon.
• Major European indices trade in the red. Germany's DAX -0.6%, U.K.'s FTSE -0.1%, France's CAC -0.4%
  • In economic data:
    • Eurozone's May CPI 0.0% m/m, as expected (last 0.6%); 1.9% yr/yr, as expected (last 2.2%). May Core CPI 0.0% m/m, as expected (last 0.1%); 2.3% yr/yr, as expected (last 2.7%). April Current Account surplus EUR19.8 bln (expected surplus of EUR40.4 bln; last surplus of EUR50.9 bln)
    • U.K.'s May CPI 0.2% m/m, as expected (last 1.2%); 3.4% yr/yr (expected 3.3%; last 3.5%). May Core CPI 0.2% m/m, as expected (last 1.4%); 3.5% yr/yr, as expected (last 3.8%). May RPI 0.2% m/m (last 1.7%); 4.3% yr/yr (expected 4.2%; last 4.5%). May House Price Index 3.5% yr/yr (expected 5.6%; last 6.4%)
  • In news:
    • European Central Bank policymaker Panetta lamented the presence of risks to the policy outlook that are difficult to quantify.
    • Sweden's Riksbank lowered its policy rate by 25 basis points to 2.00%.
    • The Bank of England will announce its latest policy decision tomorrow, though a rate cut is not expected.