Stock Market Update

Equity futures are mostly lower this morning after a tough session for the major averages yesterday that saw considerable losses in mega-cap and tech names. 

The Fed's Jackson Hole symposium kicks off today, with the market eagerly anticipating Fed Chair Powell's Friday speech in hopes that it will spur confidence in a friendlier rate environment. 

Fed Governor Lisa Cook responded to demands for her resignation after accusations of mortgage fraud by saying she has no intentions of resigning, according to CNBC.

Kansas City Fed President Jeffrey Schmid (voting FOMC member) said in a CNBC interview that Lisa Cook will handle matters as she needs to and suggested that mortgage applications should be more simplified. When asked about a September rate cut, Schmid reiterated that there is a lot of data that will come out between now and then, though he stated that it is fair to say he is not in a hurry to cut interest rates. 

On the trade front, the U.S. and EU issued a joint statement on a United States-European Union framework. The European Union intends to eliminate tariffs on all U.S. industrial goods and to provide preferential market access, and in turn, the U.S. will commit to applying the higher of either the U.S. Most Favored Nation tariff rate or a tariff rate of 15%.

Today's economic data features the weekly jobless claims report at 8:30 ET, with initial claims expected to see a modest increase. The market will also receive the August Philadelphia Fed Index at 8:30 ET, followed by the preliminary August S&P Global U.S. Manufacturing and Services PMI at 9:45 ET, Existing Home Sales for July at 10:00 ET, and July Leading Indicators at 10:00 ET.

This morning's slate of earnings reports was light, though it featured Walmart (WMT 100.00, -2.57, -2.2%), which trades lower in the pre-market after an EPS miss. 

In corporate news:

• Boeing (BA 228.88, +3.26, +1.4%) is in serious discussions to sell up to 500 aircraft to China. 
• Dayforce (DAY 68.14, +0.74, +1.1%) has entered into a definitive agreement to be acquired by Thoma Bravo for $70 per share. 
• Meta Platforms (META 744.15, -3.57, -0.5%) freezes hiring in AI positions after a several-month-long talent acquisition conquest, according to The Wall Street Journal. 
• Walmart (WMT 100.00, -2.57, -2.2%) missed EPS expectations by $0.05, reported revenues in-line, and saw U.S. comparable sales (excluding fuel) increase 4.6%. The company guided Q3 EPS above consensus and reaffirmed FY26 EPS guidance. 

Reviewing overnight developments:

Equity indices in the Asia-Pacific region ended Thursday on a mixed note. Japan's Nikkei: -0.7%, Hong Kong's Hang Seng: -0.2%, China's Shanghai Composite: +0.1%, India's Sensex: +0.2%, South Korea's Kospi: +0.4%, Australia's ASX All Ordinaries: +1.2%.

In news:

• Flash PMI readings for August showed the second consecutive month of contracting activity in Japan's manufacturing sector while activity in India and Australia accelerated.
• China is considering using yuan-backed stablecoins for settling cross-border trade.
• South Korea's exports through the first 20 days of August were up 7.6% yr/yr with chip exports jumping 29.5%.

In economic data:

• Japan's August flash Manufacturing PMI 49.9 (expected 49.2; last 48.9) and August flash Services PMI 52.7 (last 53.6)
• South Korea's July PPI 0.4% m/m (last 0.1%); 0.5% yr/yr (last 0.5%)
• India's August flash Manufacturing PMI 59.8 (expected 59.1; last 59.1) and flash Services PMI 65.6 (expected 60.3; last 60.5)
• Hong Kong's July CPI 0.6% m/m (last 0.0%); 1.0% yr/yr (expected 0.8%; last 1.4%)
• Australia's August flash Manufacturing PMI 52.9 (last 51.3) and August flash Services PMI 55.1 (last 54.1). MI Inflation Expectations 3.9% (last 4.7%)
• New Zealand's July trade deficit NZD578 mln (expected surplus of NZD70 mln; last surplus of NZD203 mln). July Credit Card Spending 1.4% yr/yr (last 0.9%)

Major European indices trade in the red. STOXX Europe 600: -0.3%, Germany's DAX: -0.2%, U.K.'s FTSE 100: -0.2%, France's CAC 40: -0.6%, Italy's FTSE MIB: -0.1%, Spain's IBEX 35: -0.7%.

In news:

• Flash August Manufacturing and Services PMI readings were mostly ahead of expectations with readings from Germany and France essentially showing a standstill in both sectors.
• The Manufacturing PMI reading for the eurozone (50.5) came in above 50.0, indicating the first expansion in activity in over three years.
• BMW and Mercedes may work together on engine development.
• Defense contractor Rheinmetall has been boosted by indications that European nations will be responsible for the bulk of security guarantees provided to Ukraine.

In economic data:

• Eurozone's August flash Manufacturing PMI 50.5 (expected 49.5; last 49.8) and flash Services PMI 50.7 (expected 50.8; last 51.0)
• Germany's August flash Manufacturing PMI 49.9 (expected 48.8; last 49.1) and flash Services PMI 50.1 (expected 50.4; last 50.6)
• U.K.'s June Public Sector Net Borrowing GBP1.05 bln (expected GBP2.10 bln; last GBP22.56 bln). August flash Manufacturing PMI 47.3 (expected 48.2; last 48.0) and flash Services PMI 53.6 (expected 51.8; last 51.8). August CBI Industrial Trends Orders -33 (expected -28; last -30)
• France's August flash Manufacturing PMI 49.9 (expected 48.2; last 48.2) and flash Services PMI 49.7 (expected 48.5; last 48.5)
• Swiss July trade surplus CHF4.59 bln (expected surplus of CHF5.15 bln; last surplus of CHF5.73 bln)