Stock Market Update

The S&P 500 futures trade 24 points above fair value.

Equity indices in the Asia-Pacific region finished the week on a mostly lower note. Continuing weakness in the U.S. markets acted as a cue for selling activity, yet the main precipitant was a series of new tariff announcements from President Trump (100% for imported branded and generic pharmaceuticals if no plant being built in U.S; 25% for heavy trucks; 50% for kitchen cabinets, bathroom vanities, and associated products; and 30% for upholstered furniture). These tariffs all start October 1. Asian markets were also taking in the news that President Trump signed an Executive Order saving TikTok from being banned in the U.S. after an apparent deal for its "qualified divestiture" was struck between the U.S. and China that will leave TikTok majority-owned by U.S. investors. Separately, Japan's September Tokyo CPI and Core CPI data did not contain any negative surprises relative to expectations.

• In economic data
  • Japan's September Tokyo CPI 2.5% yr/yr (prior 2.5%) and Tokyo Core CPI 2.5% yr/yr (expected 2.8%; prior 2.5%) 
  • South Korea's September Manufacturing BSI Index 70 (prior 70)
  • Singapore's August Industrial Production -9.7% m/m (expected -4.6%; prior 8.8%) and -7.8% yr/yr (expected -2.5%; prior 7.7%)

---Equity Markets---

• Japan's Nikkei: -0.8% (+0.8% for the week)
• Hong Kong's Hang Seng: -1.4% (-1.6% for the week)
• China's Shanghai Composite: -0.7% (+0.2% for the week)
• India's Sensex: -0.9% (-2.7% for the week)
• South Korea's Kospi: -2.5% (-1.7% for the week)
• Australia's ASX All Ordinaries: +0.2% (+0.2% for the week)

Major European bourses have weathered President Trump's new tariff announcements for branded and generic pharmaceuticals (100%), heavy trucks, kitchen cabinets, bathroom vanities and associated products (50%), and upholstered furniture (30%). Gains were extended after the U.S. release of the August Personal Income and Spending Report at 8:30 a.m ET, which contains the Fed's preferred inflation gauge (PCE Price Index). Corporate news was on the light side, as was economic data, although Spain's Q2 GDP and Italy's September Consumer Confidence reports were both better than expected.

• In economic data:
  • Spain's Q2 GDP 0.8% q/q (expected 0.7%; prior 0.6%) and 3.1% yr/yr (expected 2.8%; prior 3.2%)
  • Italy's September Consumer Confidence 96.8 (expected 96.5; prior 96.2); September Business Confidence 87.3 (expected 87.5; prior 87.3)

---Equity Markets---

• STOXX Europe 600: +0.7% (unch for the week)
• Germany's DAX: +0.9% (+0.4% for the week)
• UK's FTSE 100: +0.6% (+0.6% for the week)
• France's CAC 40: +0.9% (+0.2% for the week)
• Italy's FTSE MIB: +1.0% (+0.8% for the week)
• Spain's IBEX 35: +1.3% (+0.4% for the week)