Stock Market Update

The S&P 500 futures currently trade 21 points above fair value. 

Equity indices in the Asia-Pacific region ended Tuesday on a mostly higher note. Japan's budget for FY27 assumes record interest costs. Japan is reportedly planning to exempt gains from non-core business sales from corporate tax if proceeds are reinvested in acquisitions. Separately, Japan is not planning to release crude oil from its national reserve in September or October. The Reserve Bank of Australia's latest policy minutes showed readiness to hike if upside risks materialize. In China, Chengdu's local government eased housing rules and lowered the minimum down payment ratio.

• In economic data:
  • Japan's June BoJ Core CPI 2.3% yr/yr (last 2.6%). June Leading Index 116.5 (expected 116.4; last 116.5) and Coincident Indicator 0.6% m/m (expected 0.3%; last -0.2%)
  • Hong Kong's July trade deficit HKD4.9 bln (last deficit of HKD52.0 bln). July Imports 41.0% m/m (last 45.4) and Exports 50.7% m/m (last 53.4%)
  • South Korea's August Consumer Confidence 104.5 (last 106.8)

---Equity Markets---

• Japan's Nikkei: +0.5%
• Hong Kong's Hang Seng: UNCH
• China's Shanghai Composite: +0.2%
• India's Sensex: +0.4%
• South Korea's Kospi: +0.7%
• Australia's ASX All Ordinaries: +0.6%

Major European indices trade in the green with Germany's DAX (+0.7%) showing relative strength. Germany's Q2 GDP growth was revised up to 0.3% from 0.2% and the ifo Business Climate Index (88.8; expected 87.2) beat expectations, showing some overall improvement in the German economy. Separately, German Chancellor Merz said that his cabinet will consider ways to protect domestic industry. British Prime Minister Burnham will reportedly not rule out a tax hike in the Autumn budget.

• In economic data:
  • Germany's Q2 GDP 0.3% qtr/qtr (expected 0.2%; last 0.4%); 1.0% yr/yr (expected 0.9%; last 0.7%). August ifo Business Climate Index 88.8 (expected 87.2; last 86.7). August Current Assessment 88.5 (expected 87.0; last 86.5) and Business Expectations 89.1 (expected 87.5; last 86.8)
  • France's August Consumer Confidence 86 (expected 87; last 86)
  • Spain's July PPI 9.2% yr/yr (last 7.0%)

---Equity Markets---

• STOXX Europe 600: +0.3%
• Germany's DAX: +0.7%
• U.K.'s FTSE 100: unch
• France's CAC 40: +0.2%
• Italy's FTSE MIB: +0.5%
• Spain's IBEX 35: +0.1%