Stock Market Update

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

Equity indices in the Asia-Pacific region ended Tuesday on a lower note. South Korea's President Lee met with President Trump yesterday, confirming that South Korean companies will invest $150 bln into the U.S. as part of a trade deal. President Trump threatened to impose a 200% tariff on imports from China if China does not accelerate exports of rare-earth magnets. The latest policy minutes from the Reserve Bank of Australia showed an agreement that policy is still somewhat restrictive and that the pace of cuts will be determined by incoming data and the balance of global risks.

• In economic data:
  • Japan's July Corporate Services Price Index 2.9% yr/yr (expected 3.2%; last 3.2%). June BoJ Core CPI 2.0% yr/yr (expected 2.4%; last 2.3%)
  • South Korea's August Consumer Confidence 111.4 (last 143.0)
  • Singapore's July Industrial Production 8.2% m/m (expected 1.1%; last -0.8%) o Hong Kong's July trade deficit HKD34.1 bln (last deficit of HKD58.9 bln). July Imports 16.5% m/m (last 11.1%) and Exports 14.3% m/m (last 11.9%)

---Equity Markets---

• Japan's Nikkei: -1.0%
• Hong Kong's Hang Seng: -1.2%
• China's Shanghai Composite: -0.4%
• India's Sensex: -1.0%
• South Korea's Kospi: -1.0%
• Australia's ASX All Ordinaries: -0.4%

Major European indices trade in the red with France's CAC (-1.4%) showing relative weakness after Finance Minister Lombard cautioned that the IMF could intervene if Prime Minister Bayrou's minority government does not survive a confidence vote in two weeks. Continued weakness in British gilts has lifted the 30-yr yield into the 5.60% area with the April high (5.642%) not far above. The selling comes amid growing worries about the country's fiscal standing leading into the Autumn budget.

• In economic data:
  • France's August Consumer Confidence 87 (expected 90; last 88)

---Equity Markets---

• STOXX Europe 600: -0.5%
• Germany's DAX: -0.2%
• U.K.'s FTSE 100: -0.4%
• France's CAC 40: -1.4%
• Italy's FTSE MIB: -1.0%
• Spain's IBEX 35: -0.6%