Stock Market Update

Equity futures point to a sharply lower opening this morning as concerns that the U.S. and Iran are not as close to a ceasefire as previously thought have sent oil prices surging.

Stocks are coming off a second consecutive session of solid gains, largely driven by hopes that the war in Iran will draw to a close soon. There were reports that President Trump told aides the U.S. will withdraw from military operations in the next two to three weeks.

Last night, President Trump addressed the nation on the conflict in Iran. While the President reiterated that the U.S. was nearing the completion of its objectives in Iran, the address came with renewed threats against Tehran and promises to "bring them back to the stone age."

Additionally, The New York Times reports that U.S. intelligence agencies do not believe Iran is currently willing to engage in talks to end the war. Crude oil is currently up $9.23 (+9.2%) to $109.35 per barrel. On the data front, the market will receive the February Trade Balance (Briefing.com consensus -$55.8 billion) at 8:30 a.m. ET, alongside the weekly initial jobless claims report (Briefing.com consensus 215K).

In corporate news:

• The Trump administration will soon announce new tariffs on drugmakers that haven't agreed to lower prices, according to Bloomberg.
• Amazon (AMZN 205.80, -4.77, -2.3%) is in discussions to acquire Globalstar (GSAT 80.20, +11.67, +17.03), according to Financial Times.

Reviewing overnight developments:

Equity indices in the Asia-Pacific region ended Thursday on a mostly lower note amid renewed concerns about the Iran conflict dragging on after President Trump's address to the Nation. Japan's Nikkei: -2.4%, Hong Kong's Hang Seng: -0.7%, China's Shanghai Composite: -0.7%, India's Sensex: +0.3%, South Korea's Kospi: -4.5%, Australia's ASX All Ordinaries: -1.3%.

In news:

• Japan sold 10-yr JGBs to weak demand, sending the 10-yr yield to a level not seen in more than 20 years.
• Foreign investors sold Japanese equities and JGBs aggressively into Japan's fiscal year end.
• China will increase its reserves of frozen pork after hog prices reached an eight-year low.
• China Securities Journal noted that the issuance of yuan-denominated bonds by foreign entities doubled in Q1.

In economic data:

• Japan's March Monetary Base -11.6% yr/yr (expected -10.8%; last -10.6%)
• South Korea's March CPI 0.3% m/m (expected 0.6%; last 0.3%); 2.2% yr/yr (expected 2.4%; last 2.0%)
• Australia's February trade surplus AUD5.69 bln (expected surplus of AUD2.81 bln; last surplus of AUD2.26 bln). February Imports -3.2% m/m (last 1.0%) and Exports 4.9% m/m (last -1.6%)
• India's March Manufacturing PMI 53.9 (expected 53.8; last 56.9)

Major European indices trade in the red, reflecting some persisting worries about the trajectory and duration of the Iran conflict ahead of a four-day Easter weekend that will keep the region's major markets closed through Monday. STOXX Europe 600: -1.3%, Germany's DAX: -2.2%, U.K.'s FTSE 100: -0.2%, France's CAC 40: -1.4%, Italy's FTSE MIB: -1.6%, Spain's IBEX 35: -1.5%.

In news:

• Bank of England Governor Bailey cautioned against pricing in rate hikes while the European Central Bank is expected to hike rates a couple times, creating a divergence in the region's rate expectations.

In economic data:

• France's February government budget deficit EUR32.1 bln (last deficit of EUR9.7 bln)
• Italy's February Retail Sales 0.0% m/m (expected 0.3%; last 0.6%); 1.6% yr/yr (last 2.5%)
• Swiss March CPI 0.2% m/m (expected 0.5%; last 0.6%); 0.3% yr/yr (expected 0.5%; last 0.1%)