Stock Market Update

Equity futures are slightly higher this morning, with the S&P 500 futures currently trading seven points above fair value. 

Total housing starts increased 4.6% month-over-month in June to a seasonally adjusted annual rate of 1.321 million units (Briefing.com consensus: 1.300 million). That is the good news. The bad news is that single-unit starts declined 4.6% month-over-month. Total building permits increased 0.2% month-over-month to a seasonally adjusted annual rate of 1.397 million units (Briefing.com consensus: 1.383 million). That is the good news. The bad news is that single-unit permits declined 3.7% month-over-month.

The key takeaway from the report is that there wasn't any strength in single-unit starts and permits, which is where the strength needs to be to help curtail the affordability constraints in an existing home market that is still relatively light on available inventory for sale

Equity indices in the Asia-Pacific region ended the week on a mixed note with Japan's Nikkei (-0.2%) underperforming ahead of a weekend election that could result in the ruling LDP losing its majority, which would force the party to form a coalition government with parties that are looking to cut the consumption tax. Japan's Prime Minister Ishiba met with U.S. Treasury Secretary Bessent today. There is a growing likelihood of a rate cut from the Reserve Bank of Australia after yesterday's jobs report for June included a rising unemployment rate.

• In economic data:
  • Japan's June National CPI 0.1% m/m (last 0.3%); 3.3% yr/yr (last 3.5%). June National Core CPI 3.3% yr/yr (expected 3.4%; last 3.7%)
  • New Zealand's June Credit Card Spending 0.9% yr/yr (last 2.0%)

---Equity Markets---

• Japan's Nikkei: -0.2% (+0.6% for the week)
• Hong Kong's Hang Seng: +1.3% (+2.8% for the week)
• China's Shanghai Composite: +0.5% (+0.7% for the week)
• India's Sensex: -0.6% (-0.9% for the week)
• South Korea's Kospi: -0.1% (+0.4% for the week)
• Australia's ASX All Ordinaries: +1.3% (+2.1% for the week)

Major European indices are on course for a flat finish to the week while Italy's MIB (+0.4%) outperforms with banks and defense contractors showing strength. The EU is proposing a removal of a 10% import duty on U.S. vehicles if President Trump lowers the 25% tariff on EU auto imports below 20%. Appliance maker Electrolux reported strong results thanks in part to price hikes in the U.S. due to tariffs, but the company noted that some of its competitors are choosing to absorb the cost of higher tariffs.

• In economic data:
  • Eurozone's May Current Account surplus EUR32.3 bln (expected surplus of EUR34.8 bln; last surplus of EUR18.6 bln). May Construction Output -1.68% m/m (last 4.29%)
  • Germany's June PPI 0.1% m/m, as expected (last -0.2%); -1.3% yr/yr, as expected (last -1.2%)

---Equity Markets---

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