Stock Market Update

The stock market is poised for a flat opening with S&P 500 futures trading one point above fair value.

Yesterday’s action saw a slide in tech stocks after Monday’s record-breaking session, which stifled further gains in the S&P 500 despite a strong performance from small and mid-cap stocks.

The market awaits the fate of the large reconciliation bill which passed through the Senate yesterday 51-50, and is now currently being debated in the House.

President Trump has threatened a 35% tariff on Japan if a trade deal is not struck before the imposed July 9 deadline.

The market received the weekly MBA Mortgage Applications Index, which increased by 2.7% from a prior 1.1% rise. The June ADP Employment Change report (Briefing.com consensus 97K; prior 37K) will be released at 8:15 ET.

Treasuries are on track for a lower start with the 10-yr yield rising four basis points to 4.29%.'

In U.S. corporate news:

• Tesla (TSLA 302.42, +1.71, +0.6%): will report sales later today following a Reuters report that China-produced electric vehicles saw their first sales increase in nine months, while sales in Europe have been down.
• Netflix (NFLX 1304.01, +10.01, +0.8%): The Wall Street Journal reports that Netflix is considering partnering with Spotify (SPOT 729.11, +6.76, +0.9%) on several music related projects, such as live concerts and music award shows.
• Centene (CNC 40.25, -16.40, -29.0%): company withdrew its guidance for FY25. UBS downgraded the stock to Neutral from Buy with a $45 target while JPMorgan downgraded shares to Neutral from Overweight with a $48 target.
• Constellation Brands (STZ 165.91, -0.51, -0.3%): missed Q1 expectations and reaffirmed EPS guidance for FY26.
• Greenbrier (GBX 53.10, +6.10, +13.0%): beat Q3 expectations and reaffirmed revenue guidance for FY25.
• Verint Systems (VRNT 20.30, +1.71, +9.2%): Thoma Bravo is in talks to acquire the company, according to Bloomberg

Reviewing overnight developments:

• Asian markets ended mixed. Japan's Nikkei -0.6%, Hong Kong's Hang Seng +0.6%, China's Shanghai Composite -0.1%
  • In economic data:
    • Japan's June Monetary Base -3.3% yr/yr (expected -3.5%; last -3.4%)
    • South Korea's June CPI 0.0% m/m, as expected (last -0.1%); 2.2% yr/yr (expected 2.1%; last 1.9%)
    • Hong Kong's May Retail Sales 2.4% yr/yr (last -2.3%)
    • Australia's June AIG Construction Index -14.9 (last -6.4) and AIG Manufacturing Index -29.3 (last -23.5). May Building Approvals 3.2% m/m (expected 4.2%; last -4.1%); 8.0% yr/yr (last 5.5%). May Retail Sales 0.2% m/m (expected 0.3%; last 0.0%)
  • In news:
    • President Trump expressed doubt that a trade deal with Japan will get done ahead of the July 9 deadline, adding that Japan's tariff may be increased to as much as 35%
    • Secretary of State Rubio will travel to Japan, South Korea, and Malaysia next week
    • There is a growing likelihood of a rate cut from the Reserve Bank of Australia on July 8
• Major European indices trade in the green. Germany's DAX +0.3%, U.K.'s FTSE +0.2%, France's CAC +1.3%
  • In economic data:
    • Eurozone's May Unemployment Rate 6.3% (expected 6.2%; last 6.2%)
    • France's May budget deficit EUR94.0 bln (last deficit of EUR69.3 bln)
    • Italy's May Unemployment Rate 6.5% (expected 6.0%; last 6.1%)
    • Spain's June Unemployment Change -48,900 (expected -69,500; last -57,800)
  • In news:
    • European Central Bank policymaker Centeno said that the central bank is in no hurry to cut rates while policymaker Rehn said that the central bank should be on watch for inflation potentially staying below target in persistent fashion
    • The EU is resisting British Prime Minister Starmer's attempt to rejoin the EU's trading union