Stock Market Update

The S&P 500 futures currently trade 50 points below fair value.

Equity indices in the Asia-Pacific region ended the week on a lower note with South Korea's Kospi (-3.9%) deepening Thursday's reversal from its best level in nearly four years. Toyko Electron fell sharply after lowering its guidance and warning of sluggish demand. China's Caixin Manufacturing PMI (49.5) dipped below 50.0 in the reading for July, joining the official reading in contractionary territory. Japan's Labor Ministry Council expects that the average minimum wage will increase by 6%.

• In economic data:
  • China's July Caixin Manufacturing PMI 49.5 (expected 50.2; last 50.4)
  • Japan's July Manufacturing PMI 48.9 (expected 48.8; last 50.1). June jobs/applications ratio 1.22 (expected 1.25; last 1.24) and June Unemployment Rate 2.5%, as expected (last 2.5%)
  • South Korea's July Manufacturing PMI 48.0 (last 48.7). July trade surplus $6.61 bln (expected surplus of $5.36 bln; last surplus of $9.08 bln). July Imports 0.7% yr/yr (expected 2.0%; last 3.3%) and Exports 5.9% yr/yr (expected 4.6%; last 4.3%)
  • India's July Manufacturing PMI 59.1 (expected 59.2; last 58.4)
  • Australia's July Manufacturing PMI 51.3 (last 51.6). Q2 PPI 0.7% qtr/qtr (expected 0.9%; last 0.9%); 3.4% yr/yr (last 3.7%). July Commodity Prices -9.0% yr/yr (last -8.7%)
  • New Zealand's June Building Consents -6.4% m/m (last 10.3%)

---Equity Markets---

• Japan's Nikkei: -0.7% (-1.6% for the week)
• Hong Kong's Hang Seng: -1.1% (-3.5% for the week)
• China's Shanghai Composite: -0.4% (-0.9% for the week) 
• India's Sensex: -0.7% (-1.1% for the week) 
• South Korea's Kospi: -3.9% (-2.4% for the week)
• Australia's ASX All Ordinaries: -0.9% (-0.2% for the week)

Major European indices trade in the red while Switzerland's market is closed for a holiday. International Consolidated Airlines reported strong results for Q2 while AXA missed expectations. Bayer raised its outlook while Daimler Truck lowered its guidance for the year. Drugmakers are seeing pressure after President Trump sent letters to major manufacturers, requesting that they lower prices charged in the U.S.

• In economic data:
  • Eurozone's July Manufacturing PMI 49.8, as expected (last 49.5). July CPI 0.0% m/m (last 0.3%); 2.0% yr/yr (expected 1.9%; last 2.0%). July Core CPI -0.2% m/m (last 0.4%); 2.3% yr/yr, as expected (last 2.3%)
  • Germany's July Manufacturing PMI 49.1 (expected 49.2; last 49.2)
  • U.K.'s July Nationwide HPI 0.6% m/m (expected 0.5%; last -0.9%); 2.4% yr/yr (expected 2.1%; last 2.1%). July Manufacturing PMI 48.0 (expected 48.2; last 47.7)
  • France's July Manufacturing PMI 48.2 (expected 48.4; last 48.1)
  • Italy's July Manufacturing PMI 49.8 (expected 48.7; last 48.4). June Retail Sales 0.6% m/m (expected 0.3%; last -0.4%); 1.0% yr/yr (last 1.4%)
  • Spain's July Manufacturing PMI 51.9 (expected 51.7; last 51.4)

---Equity Markets---

• STOXX Europe 600: -1.4% (-1.9% week-to-date)
• Germany's DAX: -2.0% (-2.5% week-to-date)
• U.K.'s FTSE 100: -0.6% (-0.4% week-to-date)
• France's CAC 40: -2.3% (-3.0% week-to-date)
• Italy's FTSE MIB: -2.0% (-1.3% week-to-date)
• Spain's IBEX 35: -1.3% (-0.1% week-to-date)