Stock Market Update

The S&P 500 futures currently trade 105 points below fair value.

Equity indices in the Asia-Pacific region ended Tuesday on a mostly lower note. Sovereign debt was also pressured with JGBs sliding sharply and the 20-yr yield jumping nearly 16 basis points to 3.316% after a weak auction. There was also speculation about increased fiscal spending after Prime Minister Takaichi confirmed that a snap election will be held on February 8. China's National Development and Reform Commission will take steps to boost demand for the next four years. The People's Bank of China left its one-year and five-year prime rates at their respective 3.00% and 3.50%.

• In economic data:
  • South Korea's December PPI 0.4% m/m (last 0.3%); 1.9% yr/yr (last 1.9%)
  • Hong Kong's December Unemployment Rate 3.8% (last 3.8%)
  • India's December Infrastructure Output 3.7% yr/yr (last 1.8%)
  • New Zealand's December Performance of Services Index 51.5 (last 46.9)

---Equity Markets---

• Japan's Nikkei: -1.1%
• Hong Kong's Hang Seng: -0.3%
• China's Shanghai Composite: UNCH
• India's Sensex: -1.3%
• South Korea's Kospi: -0.4%
• Australia's ASX All Ordinaries: -0.6%

Major European indices trade in the red amid pressure on sentiment stemming from President Trump's continued insistence that Greenland has vital importance to U.S. national security and an overnight slide in Japanese debt that drove JGB yields on longer tenors to fresh record highs. French Prime Minister Lecornu said that a surtax on profits of large companies will be maintained in the budget for 2026 to appease socialists. European Central Bank policymaker Vujcic was nominated to replace Luis de Guindos as ECB Vice President.

• In economic data:
  • Eurozone's November Current Account surplus EUR8.6 bln (expected surplus of EUR20.3 bln; last surplus of EUR26.7 bln) and November Construction Output -1.06% m/m (last 1.66%). January ZEW Economic Sentiment 40.8 (expected 36.7; last 33.7)
  • Germany's December PPI -0.2% m/m, as expected (last 0.0%). January ZEW Economic Sentiment 59.6 (expected 50.0; last 45.8) and ZEW Current Conditions -72.7 (expected -75.5; last -81.0)
  • U.K.'s November three-month employment change 82,000 (expected 27,000; last -16,000). November Average Earnings Index + Bonus 4.7% yr/yr (expected 4.6%; last 4.8%), November Unemployment Rate 5.1%, as expected (last 5.1%) and December Claimant Count change 17,900 (expected 15,600; last -3,300)
  • Spain's November trade deficit EUR5.68 bln (last deficit of EUR4.69 bln)
  • Swiss December PPI -0.2% m/m, as expected (last -0.5%); -1.8% yr/yr (last -1.6%)

---Equity Markets---

• STOXX Europe 600: -1.3%
• Germany's DAX: -1.4%
• U.K.'s FTSE 100: -1.2%
• France's CAC 40: -1.1%
• Italy's FTSE MIB: -1.5%
• Spain's IBEX 35: -1.6%