Stock Market Update

The stock market is on course for a higher start with futures on the S&P 500 trading 24 points above fair value.

The market found some resistance near record territory yesterday, but it is set to make another push higher after S&P 500 futures tagged a fresh record in overnight trade.

Chipmakers are likely to see some early strength after Micron (MU 129.65, +2.40, +1.9%) beat Q3 expectations and issued strong guidance for Q4.

On the news front, The Wall Street Journal reported last evening that President Trump may nominate the next Fed Chair well before Chairman Powell's term ends in May 2026. Separately, President Trump announced that nuclear talks with Iran will begin next week.

The market will receive a big batch of data at 8:30 ET, including May Durable Orders (Briefing.com consensus 6.6%; prior -6.3%), Durable Orders ex-transport (Briefing.com consensus 0.1%; prior 0.2%), third estimate of Q1 GDP (Briefing.com consensus -0.2%; prior -0.2%), weekly Initial Claims (Briefing.com consensus 247,000; prior 245,000), Continuing Claims (prior 1.945 mln), and May advance International Trade in Goods (prior -$87.6 bln), advance Retail Inventories (prior -0.1%), and Advance Wholesale Inventories (prior 0.0%). Later in the day, the Pending Home Sales report for May (Briefing.com consensus 0.4%; prior -6.3%) will be released at 10:00 ET.

Treasuries hold modest gains with the 10-yr yield down two basis points at 4.27%.

In U.S. corporate news:

• Micron (MU 129.65, +2.40, +1.9%): beat Q3 expectations and issued above-consensus guidance for Q4.
• Palantir (PLTR 144.79, +1.89, +1.3%): announced a partnership with The Nuclear Company.
• Steelcase (SCS 10.70, +0.08, +0.8%): beat Q1 expectations and issued below-consensus EPS guidance for Q2.
• Kratos Defense and Security (KTOS 39.36, -2.97, -7.0%): announced a $500 mln stock offering.
• Worthington Steel (WS 30.61, +4.35, +16.6%): beat Q4 expectations.

Reviewing overnight developments:

• Asian markets ended mixed. Japan's Nikkei +1.7%, Hong Kong's Hang Seng -0.6%, China's Shanghai Composite -0.2%
  • In economic data:
    • South Korea's June Manufacturing BSI Index 70 (last 73)
    • Singapore's May Industrial Production -0.4% m/m (expected -2.5%; last 4.9%); 3.9% yr/yr (expected 2.6%; last 5.6%)
    • Hong Kong's May trade deficit HKD27.3 bln (expected deficit of HKD16.0 bln). May Imports 18.9% m/m (last 15.8%) and Exports 15.5% m/m (last 14.7%)
  • In news:
    • South Korea's President Lee warned that the Korean economy is in a desperate situation, adding that bold investment should be made in AI and chips.
    • Japan's top trade negotiator repeated that he cannot accept a 25% tariff on auto exports to the U.S.
• Major European indices trade in the green. Germany's DAX +0.5%, U.K.'s FTSE +0.4%, France's CAC +0.2%
  • In economic data:
    • Germany's July GfK Consumer Climate -20.3 (expected -19.1; last -20.0)
    • U.K.'s June CBI Distributive Trades Survey -46 (expected -24; last -27)
  • In news:
    • Lawmakers in the U.K. are putting together an effort to block Prime Minister Starmer's planned cuts to welfare.
    • European Commission President von der Leyen is expected to face a confidence vote over the handling of the response to the coronavirus pandemic, but she is likely to survive the vote.
    • The French government needs to cut another EUR5 bln from spending to achieve a 5.4% deficit for 2025.