Stock Market Update

Equity futures point to a higher opening this morning after stocks faced a sharp retreat yesterday that left each major index down over 1%. Yesterday's weakness coincided with another rise in Treasury yields and oil prices, with U.S. Treasuries giving back most of their gains from Wednesday following news that the Treasury will increase its long-term liquidity buyback program.

Yields and oil prices are both stable this morning after rising in the previous session, though investors will continue to monitor developments on the geopolitical front. Reuters reports that Iran threatened a "devastating response" after the U.S. pledged to impose more economic sanctions.

Elsewhere, corporate news flow is on the lighter side this morning, while Flash August PMI's are the sole economic data release this morning.

The major averages enter today's session with week-to-date losses of 1.8% or wider.

In corporate news:

• President Trump says he concluded a deal to substantially lower the price of ground beef; says "for the next 90 days, the United States will allow up to 300,000 metric tons of product for ground beef to be imported with no out-of-quota tariff.
• Broadcom (AVGO 368.90, +4.87, +1.3%) is seeking more than $60 billion in funding for an AI chip financing deal, according to Bloomberg.
• Ross Stores (ROST 247.25, +18.26, +8.0%) beat EPS expectations by $0.71, beat revenue expectations, reported a 10% increase in comparable sales, guided Q3 EPS above consensus, guided Q4 EPS above consensus, and raised its FY27 EPS above consensus.Reviewing overnight developments:

Equity indices in the Asia-Pacific region ended the week on a mostly higher note. Japan's Nikkei: -0.3%, Hong Kong's Hang Seng: +1.2%, China's Shanghai Composite: UNCH, India's Sensex: UNCH, South Korea's Kospi: +0.9%, Australia's ASX All Ordinaries: -0.3%.

In news:

• South Korea's exports through the first 20 days of August were up 56% yr/yr with chip exports almost tripling.
• South Korea's finance ministry said that it is keeping a close watch on rising global bond yields.
• Japan's flash Manufacturing PMI for August (55.1) remained in expansion for the eighth consecutive month.
• Japan's Prime Minister Takaichi is planning to make some changes to her cabinet in the second half of September.
• China will expand its joint military exercises with Indonesia. China is reportedly planning another round of economic discussions with Canada.

In economic data:

• China's July FDI -6.2% YTD (last -5.0%)
• Japan's July National CPI 0.4% m/m (last 0.3%); 1.9% yr/yr (last 1.6%). July National Core CPI 1.8% yr/yr, as expected (last 1.6%). Flash August Manufacturing PMI 55.1, as expected (last 54.5) and flash August Services PMI 52.3 (last 51.2)
• South Korea's July PPI -0.4% m/m (last 0.0%); 7.7% yr/yr (last 8.5%)
• Australia's flash August Manufacturing PMI 52.0 (last 52.0) and flash Services PMI 52.9 (last 53.6)
• New Zealand's July trade deficit NZD1.949 bln (expected deficit of NZD175 mln; prior deficit of NZD237 mln). July Credit Card Spending 5.3% yr/yr (last 3.2%)
• India's flash August Manufacturing PMI 52.9 (expected 54.0; last 53.5) and flash Services PMI 54.5 (expected 53.8; last 53.3)

Major European indices are on track for a largely quiet finish to the week with Spain's IBEX (+0.8%) showing relative strength. STOXX Europe 600: +0.1%, Germany's DAX: +0.2%, U.K.'s FTSE 100: +0.2%, France's CAC 40: +0.1%, Italy's FTSE MIB: +0.2%, Spain's IBEX 35: +0.8%.

In news:

• European Central Bank policymaker Kazaks reiterated that the ECB's September decision will be guided by data.
• Meanwhile, the latest consumer expectations survey for the eurozone showed a dip in year-ahead CPI expectations to 2.9% from 3.0% while the three-year outlook eased to 2.7% from 2.8%.
• The French government is reportedly looking to renew a tax on large corporate profits that brought in about EUR7.5 bln of revenue in 2025.

In economic data:

• Eurozone's flash August Manufacturing PMI 52.8 (expected 51.8; last 51.9) and flash Services PMI 51.7 (expected 51.5; last 51.7)
• Germany's flash August Manufacturing PMI 54.1 (expected 52.1; last 52.2) and flash Services PMI 48.5 (expected 50.1; last 49.8)
• U.K.'s July Retail Sales -0.5% m/m (expected -0.4%; last 0.7%); 1.6% yr/yr (expected 2.2%; last 3.8%). July Core Retail Sales -0.9% m/m (expected -0.5%; last 0.9%); 2.3% yr/yr (expected 3.3%; last 5.0%). August flash Manufacturing PMI 51.5 (expected 51.6; last 51.9) and flash Services PMI 52.8 (expected 51.8; last 52.1)
• France's flash August Manufacturing PMI 51.5 (expected 50.1; last 49.8) and flash Services PMI 48.4 (expected 49.4; last 49.6). August Business Survey 103 (expected 101; last 101)