Stock Market Update

The S&P 500 futures currently trade 13 points above fair value. 

Equity indices in the Asia-Pacific region were flat to higher on Tuesday, with South Korea's Kospi (+1.2%) leading on its way to an eleventh consecutive gain that vaulted it further into record territory even though tariff talks with the U.S. remain in a deadlock, per the presidential office. The Kospi is up 51% from its April low. Japan's Nikkei topped 45,000 for the first time ever, coming off yesterday's holiday closure, before backtracking a bit. Today marked the implementation of the reduced 15% tariff rate (from 27.5%) on imports of Japanese vehicles and auto parts to the U.S. Separately, the Bank of Japan meets Friday and is expected to hold its key policy rate at 0.50%. Chinese markets were little changed after officials from the U.S. and China announced that a framework agreement for a TikTok deal has been reached. President Trump and President Xi are expected to talk on Friday.

• In economic data:
  • Japan's July Tertiary Activity Index 1.40 (last 3.90)
  • South Korea's August Export Price Index -1.0% yr/yr (last -4.5%) and Import Price Index -2.2% yr/yr (last -5.9%)
  • Hong Kong's August Unemployment Rate 3.7% (last 3.7%)

---Equity Markets---

• Japan's Nikkei: +0.3%
• Hong Kong's Hang Seng: flat
• China's Shanghai Composite: flat
• India's Sensex: +0.7%
• South Korea's Kospi: +1.2%
• Australia's ASX All Ordinaries: +0.3%

Major European indices are showing modest losses leading up to the start of trading in the U.S. Markets haven't been swayed much by corporate news, as the attention has been concentrated on economic data that has featured better-than-expected economic sentiment readings for Germany and the eurozone and a higher-than-expected claimant count for the UK. The BOE is expected to leave its key policy rate unchanged at 4.00% at Thursday's meeting. On a related UK note, President Trump begins his UK state visit this evening. ECB member Kazaks said there is no reason to cut rates further right now, a view that is helping to underpin the euro.

• In economic data:
  • Eurozone's July Industrial Production 0.3% m/m (expected 0.4%; last -0.6%) and 1.8% yr/yr (expected 1.7%; last 0.7%); September ZEW Economic Sentiment 26.1 (expected 20.3; last 25.1)
  • Germany's September ZEW Economic Sentiment 37.3 (expected 25.3; last 34.7)
  • UK's July Unemployment Rate was 4.7% (expected 4.7%; last 4.7%) and Average Earnings ex Bonus 4.8% yr/yr (expected 4.8%; last 5.0%); August Claimant Count 17.4K (expected 15.3K; last -33.3K)
  • Italy's August CPI 0.1% m/m (expected 0.1%; last 0.4%) and 1.6% yr/yr (expected 1.6%; last 1.6%)

---Equity Markets---

• STOXX Europe 600: -0.3%
• Germany's DAX: -0.6%
• U.K.'s FTSE 100: -0.4%
• France's CAC 40: -0.2%
• Italy's FTSE MIB: -0.4%
• Spain's IBEX 35: -0.8%