Stock Market Update

Equity futures point to a higher opening this morning, lifted by a relief bid. Yesterday's session featured some angst about the prospect of military hostilities resuming, as it became known Iran would not be sending negotiators to Pakistan to meet with Vice President Vance. The relief bid kicked in after yesterday's close when President Trump announced that he is going to extend the ceasefire with Iran, recognizing that its leadership is fractured and needs more time to come up with a unified proposal. Until then, the U.S. blockade of Iran will continue. 

Oil prices have firmed (WTI +1.0% to $90.59/bbl), with traders trying to reconcile the possibility of an eventual deal with the specter of the Strait of Hormuz remaining a chokepoint for global energy supplies and other key goods.

The stock market, though, isn't being held back. It is playing the so-called "TACO trade" once again while keying off more good earnings news, sliding Treasury yields, and a large share buyback announcement by Adobe.

There is no U.S. economic data of note today, although the MBA Mortgage Applications Index was reported earlier to be up 7.9% wk/wk, with purchase applications up 10% and refinance applications up 6%.

The 10-yr note yield is down two basis points to 4.27%. There will be a $13 billion 20-yr bond auction today, with results out at 1:00 p.m. ET.

In corporate news:

• Adobe (ADBE 253.92, +6.74, +2.7%): announces new $25 billion stock repurchase program
• AT&T (T 25.55, -0.33, -1.3%): misses by $0.01, reports revs in-line
• Best Buy (BBY 63.75, -2.84, -4.3%): Jason Bonfig, the company's Chief Customer, Product and Fulfillment Officer, to succeed Corie Barry as the next CEO. Barry will step down as CEO and member of the Board on Oct. 31 of this year.
• Boeing (BA 226.75, +7.59, +3.5%): beats by $0.48, beats on revs; 737 program continues to produce at 42/mo; says it's building on momentum with a strong start to the year
• Capital One (COF 200.00, -2.50, -1.2%): misses by $0.08, reports revs in-line
• GE Vernova (GEV 1075.94, +84.64, +8.5%): reports Q1 (Mar) results, beats on revs; raises FY26 guidance
• United Airlines (UAL 98.46, +1.33, +1.4%): beats by $0.11, beats on revs, TRASM up 6.9%; guides Q2 EPS below consensus; guides FY26 EPS in-line

Reviewing overnight developments:

Equity indices in the Asia-Pacific region ended the midweek session on a mixed note. Japan's Nikkei: +0.4%, Hong Kong's Hang Seng: -1.2%, China's Shanghai Composite: +0.5%, India's Sensex: -1.0%, South Korea's Kospi: +0.5%, Australia's ASX All Ordinaries: -1.1%.

In news:

• South Korea's March PPI increased at its fastest year-over-year pace in three years.
• Japan's March trade surplus was smaller than expected due to a big jump in imports, including a 13.9% yr/yr increase in LNG imports.
• Expectations for a May rate hike from the Reserve Bank of New Zealand increased to about 50% after yesterday's release of the second consecutive above-target CPI reading.

In economic data: 

• Japan's March trade surplus JPY90 bln (expected surplus of JPY230 bln; last deficit of JPY370 bln). March Imports 10.9% yr/yr (expected 7.1%; last 10.3%) and Exports 11.7% yr/yr (expected 11.0%; last 4.0%)
• South Korea's March PPI 1.6% m/m (last 0.6%); 4.1% yr/yr (last 2.5%)
• Australia's March MI Leading Index -0.1% m/m (last -0.1%)

Major European indices trade near their flat lines with some renewed concerns about the U.S.-Iran conflict after Vice President Vance's trip to Pakistan was called off. However, President Trump said that the ceasefire will be extended. STOXX Europe 600: unchanged, Germany's DAX: -0.2%, U.K.'s FTSE 100: unchanged, France's CAC 40: -0.3%, Italy's FTSE MIB: unchanged, Spain's IBEX 35: -0.5%.

In news:

• Travel operator TUI lowered its guidance due to increased energy prices and war-related uncertainty.
• Lufthansa is scrapping about 20,000 short-haul flights through October due to a tight supply of jet fuel.

In economic data:

• Eurozone's 2025 debt-to-GDP ratio 87.8% (prior 87.0%) and 2025 budget-to-GDP ratio -2.9% (last -3.0%)
• U.K.'s March CPI 0.7% m/m (expected 0.6%; last 0.4%); 3.3% yr/yr, as expected (last 3.0%). March Input PPI 4.4% m/m (expected 2.8%; last 0.9%); 5.4% yr/yr (last 0.7%) and Output PPI 0.9% m/m (expected 1.0%; last -0.5%); 2.6% yr/yr (last 1.8%). March Core CPI 0.4% m/m (expected 0.5%; last 0.6%); 3.1% yr/yr (expected 3.2%; last 3.2%)