Stock Market Update

The S&P 500 futures currently trade six points above fair value. 

Equity indices in the Asia-Pacific region ended the week on a mostly lower note, though Japan's Nikkei (-0.9%) and Hong Kong's Hang Seng (-1.1%) hit fresh 52-week highs before reversing. Expectations for an October rate hike from the Bank of Japan continued increasing and there was speculation that the BoJ could announce a surprise rate hike next week to get ahead of political uncertainty associated with the expected resignation of Prime Minister Ishiba. The Reserve Bank of New Zealand expects a 0.3% contraction in New Zealand's Q2 GDP. Thailand's acting prime minister warned that hostilities with Cambodia are leading toward war.

• In economic data:
  • Japan's July Tokyo CPI 2.9% yr/yr (last 3.1%) and Tokyo Core CPI 2.9% yr/yr (expected 3.0%; last 3.1%). June Corporate Services Price Index 3.2% yr/yr, as expected (last 3.4%). May Leading Index 104.8 (expected 105.3; last 104.2) and Coincident Indicator 0.0% m/m (expected -0.1%; last 0.2%)
  • Singapore's Q2 URA Property Index 1.0% qtr/qtr (expected 0.5%; last 0.8%). June Industrial Production 0.0% m/m (expected -1.5%; last 1.0%); 8.0% yr/yr (expected 7.1%; last 3.6%)

---Equity Markets---

• Japan's Nikkei: -0.9% (+4.1% for the week)
• Hong Kong's Hang Seng: -1.1% (+2.3% for the week)
• China's Shanghai Composite: -0.3% (+1.7% for the week)
• India's Sensex: -0.9% (-0.4% for the week)
• South Korea's Kospi: +0.2% (+0.3% for the week)
• Australia's ASX All Ordinaries: -0.5% (-0.8% for the week)

Major European indices are on track for a lower finish to the week. The European Central Bank did not announce a rate cut yesterday and there is growing speculation that no additional cuts will be made before Q4. The European Central Bank's latest survey of professional forecasters trimmed its harmonized inflation forecast for 2025 and 2026 by 20 basis points. The growth forecast for 2025 was increased to 1.1% from 0.9% while the outlook for 2026 was cut to 1.1% from 1.2%. Volkswagen and Puma reduced their guidance due to the expected impact of U.S. tariffs.

• In economic data:
  • Eurozone's June M3 Money Supply 3.3% yr/yr (expected 3.7%; last 3.9%) and June Private Sector Loans 2.2% yr/yr (expected 1.9%; last 2.0%)
  • Germany's July ifo Business Climate Index 88.6 (expected 89.0; last 88.4). July Current Assessment 86.5 (expected 86.7; last 86.2) and July Business Expectations 90.7 (expected 91.1; last 90.6)
  • U.K.'s June Retail Sales 0.9% m/m (expected 1.2%; last -2.8%); 1.7% yr/yr (expected 1.8%; last -1.1%). June Core Retail Sales 0.6% m/m (expected 1.2%; last -2.9%); 1.8% yr/yr (expected 2.0%; last -1.2%)
  • France's July Consumer Confidence 89 (expected 88; last 88)
  • Italy's July Business Confidence 87.8 (expected 87.7; last 87.3) and July Consumer Confidence 97.2 (expected 96.0; last 96.1)

---Equity Markets---

• STOXX Europe 600: -0.6% (+0.3% week-to-date)
• Germany's DAX: -0.9% (-0.8% week-to-date)
• U.K.'s FTSE 100: -0.5% (+1.3% week-to-date)
• France's CAC 40: -0.2% (-0.3% week-to-date)
• Italy's FTSE MIB: +0.4% (+1.0% week-to-date)
• Spain's IBEX 35: -0.8% (+1.5% week-to-date)