Stock Market Update

Equity futures point to a mixed, flattish opening this morning after stocks finished mostly higher in yesterday's action, with another tame inflation reading and strength in tech stocks pushing the S&P 500 to fresh record highs.

The major averages enter Friday's action mostly higher for the week.

A retreat in crude oil prices and Treasury yields added to the constructive backdrop yesterday, though there was little in the way of geopolitical news regarding the U.S. and Iran. Bloomberg reports that Treasury Secretary Scott Bessent said in an interview that the U.S. will announce "unprecedented" economic isolation measures against Iran next week.

While the July CPI and PPI releases were the keystone economic data releases this week, the market has several important data points on the calendar this morning as well, including July Retail Sales (Briefing.com consensus 0.2%) at 8:30 a.m. ET and the preliminary University of Michigan Consumer Sentiment Index for August at 10:00 a.m. (Briefing.com consensus 54.5).

In corporate news:

• OpenAI's revenue run rate has reached $40 billion, according to Bloomberg.
• Applied Materials (AMAT 506.89, -27.65, -5.34) beat EPS expectations by $0.10, beat revenue expectations, and guided Q4 EPS and revenues above consensus.
• Sandisk (SNDK 1,631.79, +103.68, +6.78) was resumed with an Overweight at JPMorgan, with a target price of $2,250.

Reviewing overnight developments:

Equity indices in the Asia-Pacific region had a mixed finish to the week with South Korea's Kospi (+2.4%) rising to a three-week high. Japan's Nikkei: +0.6%, Hong Kong's Hang Seng: -1.1%, China's Shanghai Composite: UNCH, India's Sensex: -0.1%, South Korea's Kospi: +2.4%, Australia's ASX All Ordinaries: -0.7%.

In news:

• Fitch expects to see modest growth in China's insurances sector for the remainder of the year amid some regulatory support.
• A former Japanese currency diplomat Furusawa said that the Bank of Japan plans another 50-75 basis points of rate hikes, adding that another U.S. intervention is possible if the yen returns to this year's low against the dollar.
• Australia's Prime Minister Albanese said that he appealed to President Trump to exempt Australia from additional tariffs.

In economic data:

• China's July New Loans -CNY340.0 bln (expected -CNY50.0 bln; last CNY1.61 trln), July Total Social Financing CNY1.41 trln (expected CNY1.20 trln; last CNY3.36 trln)
• Hong Kong's Q2 GDP -0.6% qtr/qtr, as expected (last -0.6%); 4.3% yr/yr, as expected (last 4.3%)
• Australia's Q2 Home Loans -1.9% qtr/qtr (last -3.5%)
• New Zealand's July Business PMI 54.3 (last 60.1)
• India's July WPI Inflation 9.78% yr/yr (expected 9.95%; last 9.87%)

Major European indices trade near their flat lines while Germany's DAX (+0.8%) outperforms with SAP and Rheinmetall contributing to the strength. STOXX Europe 600: UNCH, Germany's DAX: +0.8%, U.K.'s FTSE 100: UNCH, France's CAC 40: +0.1%, Italy's FTSE MIB: UNCH, Spain's IBEX 35: +0.2%.

In news:

• Reform leader Farage won a by election in Clacton, which was expected.
• Russia's Foreign Minister Lavrov said that an immediate ceasefire in Ukraine is not realistic.

In economic data:

• Eurozone's flash Q2 GDP 0.4% qtr/qtr, as expected (last 0.0%); 1.0% yr/yr, as expected (last 0.5%). Q2 Employment Change 0.1% qtr/qtr, as expected (last 0.1%); 0.5% yr/yr (expected 0.6%; last 0.5%). June trade surplus EUR8.6 bln (expected deficit of EUR2.2 bln; last deficit of EUR9.0 bln)
• Germany's July WPI 0.2% m/m (expected -0.2%; last -0.7%); 5.3% yr/yr (last 4.9%)
• France's July CPI 0.6% m/m, as expected (last -0.3%); 2.1% yr/yr, as expected (last 1.8%).
• Swiss Q2 GDP 1.5% qtr/qtr (last 0.7%)