Stock Market Update

The S&P 500 futures currently trade 89 points below fair value.

Equity indices in the Asia-Pacific region had a broadly lower finish to the week with South Korea's Kospi (-6.1%) plunging from a record high alongside a jump in the country's 10-yr yield (+16 bps to 4.25%) amid worries about a potential employee strike at Samsung Electronics, though the employee union indicated willingness to push talks back to early June. Japanese debt was also pressured, sending yields to fresh highs for the year even though Finance Minister Katayama said that an extra budget will not be needed this year. U.S. Trade Representative Greer said that discussions about rare-earth materials with China went ok as President Trump wrapped up his visit to Beijing. Some CEOs that accompanied the president stayed behind to continue business discussions.

• In economic data:
  • Japan's April PPI 2.3% m/m (expected 0.7%; last 1.0%); 4.9% yr/yr (expected 3.0%; last 2.9%). April Machine Tool Orders 45.1% yr/yr (expected 28.1%; last 24.2%)
  • South Korea's April Import Prices Index 20.2% yr/yr (last 20.4%); 40.8% yr/yr (last 29.5%)
  • Hong Kong's Q1 GDP 2.9% qtr/qtr, as expected (last 1.0%); 5.9% yr/yr, as expected (last 3.8%)
  • India's April trade deficit $28.38 bln (expected deficit of $27.00 bln; last deficit of $20.67 bln)
  • New Zealand's April Business PMI 50.5 (last 52.8) and April Food Price Index 0.0% m/m (last -0.6%)

---Equity Markets---

• Japan's Nikkei: -2.0%
• Hong Kong's Hang Seng: -1.6%
• China's Shanghai Composite: -1.0% 
• India's Sensex: -0.2%
• South Korea's Kospi: -6.1%
• Australia's ASX All Ordinaries: -0.2% 

Major European indices are on track for a lower finish to the week. G-7 finance ministers will meet in France this weekend to discuss bond volatility. British Prime Minister Starmer may face a leadership challenge from Andy Burnham, who is the mayor of Greater Manchester. However, Mr. Burnham is not in parliament, so he would first need to win a special election to fill a vacant seat created by the resignation of a Labour MP. The European Central Bank's latest economic bulletin acknowledged the increase in energy costs due to the conflict in Iran, noting that households and firms are becoming more reluctant to consume and invest.

• In economic data:
  • Italy's April CPI 1.1% m/m (expected 1.2%; last 0.5%); 2.7% yr/yr (expected 2.8%; last 1.7%)

---Equity Markets---

• STOXX Europe 600: -1.6%
• Germany's DAX: -1.9%
• U.K.'s FTSE 100: -1.9%
• France's CAC 40: -1.6% 
• Italy's FTSE MIB: -2.0% 
• Spain's IBEX 35: -1.3%