Stock Market Update

The S&P 500 futures currently trade 16 points above fair value

Equity indices in the Asia-Pacific region ended Thursday on a mixed note with most markets staying inside a narrow range. The yen has rallied back to its September high against the dollar after Treasury Secretary Bessent said yesterday that he knows what Japan is planning on doing, fueling speculation that he is foreshadowing a rate hike from the Bank of Japan. Separately, the Japanese government is reportedly looking to guide 40% of household assets into equities, investment trusts, and bonds by 2040, up from the current 25%. China Securities Journal expects the yuan to continue appreciating moderately this year.

• In economic data:
  • China's August RatingDog Services PMI rose to 51.4 (expected 50.6; last 50.4).
  • Japan's August Services PMI rose to 52.5 (expected 52.3; last 51.2).
  • Hong Kong's August Manufacturing PMI fell to 49.5 (last 51.0).
  • Australia's August Services PMI slipped to 53.2 (expected 52.9; last 53.6).
  • Australia's July trade surplus narrowed to AUD1.923 bln (expected surplus of AUD1.400 bln; last surplus of AUD2.341 bln).
  • Australia's July imports fell 2.5% m/m (last -0.7%), while exports fell 3.3% m/m (last 9.1%).
  • New Zealand's Q2 Terms of Trade Index fell 9.0% qtr/qtr (expected -2.1%; last -1.9%).
  • India's August Services PMI rose to 54.1 (expected 54.5; last 53.3).

---Equity Markets---

• Japan's Nikkei: -0.2%
• Hong Kong's Hang Seng: -0.4%
• China's Shanghai Composite: UNCH
• India's Sensex: -0.6%
• South Korea's Kospi: +0.3%
• Australia's ASX All Ordinaries: +0.4%

Major European indices trade near their flat lines. Germany's Chancellor Merz will meet with ECB officials ahead of next week's policy meeting, which is expected to result in a rate hike. August Services PMI readings from the region showed a deeper-than-expected contraction in France (48.0; expected 48.4) and Germany (49.7; prior 49.8) while other economies reported continued growth. Germany's IfW raised the domestic growth forecast for 2026 to 1.3% from 0.8% while the ifo Institute raised its domestic growth forecast to 1.4% from 0.8%.

• In economic data:
  • The Eurozone's August Services PMI slipped to 51.6 (expected 51.7; last 51.7).
  • The Eurozone's July PPI increased 1.6% m/m (expected 1.2%; last -0.3%) and 5.8% yr/yr (last 4.6%).
  • Germany's August Services PMI slipped to 49.7 (expected 48.5; last 49.8).
  • The U.K.'s August Services PMI rose to 52.5 (expected 52.8; last 52.1).
  • France's August Services PMI fell to 48.0 (expected 48.4; last 49.6).
  • Italy's August Services PMI rose to 55.2 (expected 53.6; last 52.5).
  • Spain's August Services PMI slipped to 57.8 (expected 59.0; last 58.3).
  • Swiss Q2 GDP increased 1.9% qtr/qtr (expected 1.5%; last 0.6%) and 2.8% yr/yr (last 0.5%).
  • Swiss August CPI increased 0.4% m/m (expected 0.0%; last -0.1%) and 0.8% yr/yr (expected 0.5%; last 0.4%).

---Equity Markets---

• STOXX Europe 600: +0.5%
• Germany's DAX: UNCH
• U.K.'s FTSE 100: +0.8%
• France's CAC 40: -0.1%
• Italy's FTSE MIB: +0.6%
• Spain's IBEX 35: +0.9%