Stock Market Update

The S&P 500 futures currently trade 27 points above fair value. 

Equity indices in the Asia-Pacific region ended the week on a mostly higher note. Press reports suggest that China has continued tightening restrictions on exports to Japan with The Wall Street Journal reporting that licensing for rare earth exports has been suspended. Japan's Finance Minister Katayama is expected to discuss the issue with U.S. officials during a visit next week. Fast Retailing increased its guidance for FY26. TD expects the Reserve Bank of Australia to announce a 25-basis point rate hike in February.

• In economic data:
  • China's December CPI 0.2% m/m (last -0.1%); 0.8% yr/yr, as expected (last 0.7%). December PPI -1.9% yr/yr (expected -2.0%; last -2.2%)
  • Japan's November Household Spending 6.2% m/m (expected 2.7%; last -3.5%); 2.9% yr/yr (expected -1.0%; last -3.0%). November Leading Index 110.5 (expected 110.4; last 109.8) and Coincident Indicator -0.7% m/m (expected 0.5%; last 1.0%)
  • South Korea's November Current Account $12.24 bln (last $6.81 bln)

---Equity Markets---

• Japan's Nikkei: +1.6% 
• Hong Kong's Hang Seng: +0.3%
• China's Shanghai Composite: +0.9%
• India's Sensex: -0.7%
• South Korea's Kospi: +0.8% 
• Australia's ASX All Ordinaries: UNCH

Major European indices trade in the green while Spain's IBEX (-0.2%) lags. Germany's industrial production grew unexpectedly in November. European Central Bank policymaker Centeno is reportedly looking to run to replace Vice President de Guindos. There is some ongoing focus on merger talks between Rio Tinto and Glencore.

• In economic data:
  • Eurozone's November Retail Sales 0.2% m/m (expected 0.1%; last 0.3%); 2.3% yr/yr (expected 1.6%; last 1.9%)
  • Germany's November trade surplus EUR13.1 bln (expected surplus of EUR16.3 bln; last surplus of EUR17.2 bln). November Imports 0.8% m/m (expected 0.2%; last -1.5%) and Exports -2.5% m/m (expected 0.0%; last 0.3%). November Industrial Production 0.8% m/m (expected -0.6%; last 2.0%); 0.8% yr/yr (last 1.1%)
  • France's November Consumer Spending -0.3% m/m (expected -0.1%; last 0.5%) and Industrial Production -0.1% m/m (expected -0.2%; last 0.2%)
  • Italy's November Retail Sales 0.5% m/m (expected 0.3%; last 0.5%); 1.3% yr/yr (last 1.3%)
  • Spain's November Industrial Production 4.5% yr/yr (last 1.2%). December Business Confidence -3.5 (last -3.2)
  • Swiss December Unemployment Rate 3.0%, as expected (last 3.0%)

---Equity Markets---

• STOXX Europe 600: +0.7%
• Germany's DAX: +0.6%
• U.K.'s FTSE 100: +0.6%
• France's CAC 40: +1.0% 
• Italy's FTSE MIB: +0.1%
• Spain's IBEX 35: -0.2%