Stock Market Update

The S&P 500 futures currently trade 69 points above fair value. 

Equity indices in the Asia-Pacific region began the week on a broadly lower note with South Korea's Kospi (-8.3%) deepening last week's reversal from a record high. There were some renewed concerns about the direction of the conflict between Iran and the U.S., reflected by a rebounding price of oil. China's President Xi made a State visit to North Korea. Japan's Q1 GDP was left unrevised at the headline level (0.5% qtr/qtr) while GDP Deflator was revised down to 3.2% from 3.4%.

• In economic data:
  • Japan's Q1 GDP 0.5% qtr/qtr, as expected (last 0.3%), Q1 GDP Annualized 1.8% qtr/qtr (expected 2.1%; last 0.7%). Q1 GDP Price Index 3.2% yr/yr (expected 3.4%; last 3.4%), Q1 GDP Capital Expenditure -0.7% qtr/qtr (expected 0.3%; last 0.1%), Q1 GDP Private Consumption 0.3% qtr/qtr, as expected (last 0.1%), Q1 GDP External Demand 0.3% qtr/qtr, as expected (last 0.0%). April Current Account surplus JPY4.21 trln (expected JPY3.26 trln; last JPY3.90 trln), May Bank Lending 5.7% yr/yr (expected 5.6%; last 5.4%), and May Economy Watchers Current Index 43.6 (expected 41.9; last 40.8)

---Equity Markets---

• Japan's Nikkei: -3.9%
• Hong Kong's Hang Seng: -1.3%
• China's Shanghai Composite: -1.7%
• India's Sensex: -1.0%
• South Korea's Kospi: -8.3%
• Australia's ASX All Ordinaries: HOLIDAY

Major European indices trade on a mostly lower note while Italy's MIB (+0.7%) outperforms, holding a modest gain. Germany reported a sharper-than-expected drop in April Factory Orders (-3.8%; expected -2.2%), though the market still expects a 25-basis point rate hike from the European Central Bank on Thursday. Italy's Intesa Sanpaolo offered EUR30.6 bln to purchase Monte dei Pachi di Siena, looking to form the second-largest lender in the eurozone.

• In economic data:
  • Eurozone's June Sentix Investor Confidence -13.4 (expected -13.8; last -16.4)
  • Germany's April Factory Orders -3.8% m/m (expected -2.2%; last 4.5%)

---Equity Markets---

• STOXX Europe 600: -0.3%
• Germany's DAX: -0.5%
• U.K.'s FTSE 100: +0.1%
• France's CAC 40: -0.3%
• Italy's FTSE MIB: +0.7%
• Spain's IBEX 35: -0.1%