Stock Market Update

Equity futures are slightly down, with the S&P 500 futures trading six points below fair value.

Initial jobless claims decreasing by 5,000 for the week ending July 5 to 227,000 (Briefing.com consensus: 245,000). Continuing jobless claims for the week ending June 28 increased by 10,000 to 1.965 million, which is the highest level since November 13, 2021.

The key takeaway from the report continues to be that businesses have been slow to let employees go, but that it has become more difficult to find a job after losing one. This dynamic reflects a softening labor market, but not a truly weak labor market.

Equity indices in the Asia-Pacific region ended Thursday on a mostly higher note. Former Bank of Japan policymaker Sakurai now believes that the central bank will refrain from making another rate hike until early 2026 due to the impact of tariffs. Japan reduced its 20-yr JGB auction size to improve demand. Shanghai Securities News speculated that the Chinese government will strengthen its stimulus efforts during the second half of the year. The Bank of Korea left its policy rate at 2.50%, as expected.

• In economic data:
  • Japan's June PPI -0.2% m/m, as expected (last -0.1%); 2.9% yr/yr, as expected (last 3.3%)
  • New Zealand's May Visitor Arrivals -0.9% m/m (last 2.2%)

---Equity Markets---

• Japan's Nikkei: -0.4%
• Hong Kong's Hang Seng: +0.6%
• China's Shanghai Composite: +0.5%
• India's Sensex: -0.4%
• South Korea's Kospi: +1.6%
• Australia's ASX All Ordinaries: +0.6%

Major European indices trade mostly higher with mining names helping keep the U.K.'s FTSE (+1.2%) ahead of other indices thanks to rising commodity prices and growing hopes for new stimulus measures in China. Bank of England Governor Bailey said that ministers should not be able to mandate investment in domestic assets. The Bank of France expects domestic growth of 0.6% in 2025.

• In economic data:
  • Germany's June CPI 0.0% m/m, as expected (last 0.1%); 2.0% yr/yr, as expected (last 2.1%)
  • France's May Current Account deficit EUR3.10 bln (last deficit of EUR6.60 bln)
  • Italy's May Industrial Production -0.7% m/m (expected -0.2%; last 0.9%); -0.9% yr/yr (expected 0.2%; last 0.1%)

---Equity Markets---

• STOXX Europe 600: +0.4%
• Germany's DAX: unch
• U.K.'s FTSE 100: +0.2
• France's CAC 40: +0.3%
• Italy's FTSE MIB: +1.6%
• Spain's IBEX 35: -0.8%