OVERNIGHT MARKETS AND NEWS
Sep E-mini S&Ps (ESU17 unch) this morning are down -0.75 of a point (-0.03%). Losses were limited as bank stocks moved higher with Bank of America and Morgan Stanley both up almost 1% in pre-market trading after the Fed said that its stress tests showed all 34 banks exceeded minimum requirements. A +0.21% gain in Aug WTI crude oil (CLQ17 +0.30%) prices is also lifting energy stocks in the pre-market. Mining stocks are higher as well with Aug COMEX gold (GCQ17 +0.75%) up +0.66% at a 1-week high and Jul COMEX copper (HGN17 +1.25%) up +1.27% at a 2-week high. European stocks are down -0.64% after the Eurozone Jun Markit composite PMI weakened to its slowest pace in 5 months. Also, Brexit negotiations are under way with residency rights and clearing of euro-denominated financial instruments among the first issues being debated between the UK and the European Union. Asian stocks settled mixed: Japan +0.11%, Hong Kong -0.02%, China +0.33%, Taiwan -0.21%, Australia +0.17%, Singapore -0.19%, South Korea +0.26%, India -0.49%. China's Shanghai Composite erased early losses and moved higher in the last hour of trading on reports that state-sponsored funds had stepped in to support stock prices.
The dollar index (DXY00 -0.19%) is down -0.19%. EUR/USD (^EURUSD) is up +0.13%. USD/JPY (^USDJPY) is down -0.08%.
Sep 10-year T-note prices (ZNU17 -0.02%) are little changed, down -0.5 of a tick.
The Eurozone Jun Markit composite PMI fell -1.1 to 55.7, weaker than expectations of -0.2 to 56.6 and the slowest pace of expansion in 5 months.
The Eurozone Jun Markit manufacturing PMI unexpectedly rose +0.3 to 57.3, stronger than expectations of -0.2 to 56.8 and the fastest pace of expansion since the data series began in 2014.
France Q1 GDP was revised upward to +0.5% q/q and +1.1% y/y from +0.4% q/q and +1.0% y/y.
The Japan Jun Nikkei manufacturing PMI fell -1.1 to 52.0, the slowest pace of expansion in 7-months.
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) Jun Markit manufacturing PMI (expected +0.3 to 53.0, May -0.1 to 52.7) and Jun Markit services PMI (expected -0.1 to 53.5, May +0.9 to 54.0), (2) May new home sales (expected +3.7% to 590,000, Apr -11.4% to 569,000), (3) Cleveland Fed President Loretta Mester (non-voter) speaks at a Cleveland Fed Policy Summit on Housing, Human Capital and Inequality, (4) Fed Governor Jerome Powell speaks at the Chicago Fed at a symposium on central clearing and liquidity, (5) USDA May Cattle on Feed.
Notable Russell 2000 earnings reports today include: none.
U.S. IPO's scheduled to price today: none.
Equity conferences this week: none.
OVERNIGHT U.S. STOCK MOVERS
Morgan Stanley (MS -0.67%) and Bank of America (BAC -0.86%) gained almost 1% in pre-market trading and other bank stocks may open higher Friday after the Fed said that its stress tests showed all 34 banks exceeded minimum requirements.
Starbucks (SBUX -0.75%) was initiated with a recommendation of 'Overweight' at KeyBanc Capital Markets with a 12-month target price of $68.
Caterpillar (CAT +0.36%) slid over 1% in pre-market trading after it was downgraded to 'Hold' from 'Buy' at Deutsche Bank.
Acacia Communications (ACIA +1.59%) rose 1% in after-hours trading after it was initiated with a 'Buy' rating at D.A. Davidson with a 12-month target price of $61.
Prologis (PLD -0.71%) was upgraded to 'Buy' from 'Neutral' at Bank of America/Merrill Lynch with a price target of $65.
Sonic (SONC -0.07%) slumped 7% in after-hours trading after it reported Q3 revenue of $124 million, less than consensus of $124.7 million, and said Q2 system-wide comparable sales fell -1.2%, weaker than estimates of -1.0%.
Bed Bath & Beyond (BBBY +0.24%) tumbled over 8% in after-hours trading after it reported Q1 EPS of 53 cents, below consensus of 66 cents, and said that Q1 comparable same-store sales unexpectedly fell -2.0%, weaker than expectations of +0.3%. Pier 1 Imports (PIR +1.58%) fell over 3% and Williams-Sonoma (WSM +1.03%) fell over 2% on negative carryover from Bed Bath & Beyond
Lumentum Holdings (LITE -0.08%) gained over 1% in after-hours trading after it was initiated with a 'Buy' rating at D.A. Davidson with a 12-month target price of $77.
Armada Hoffler (AHH -0.51%) was downgraded to 'Hold' from 'Buy' at Stifel.
SMART Global Holdings (SGH +2.86%) rose 3% in after-hours trading after it reported Q3 revenue of $207 million, above consensus of $203.2 million.
Ocular Therapeutix (OCUL +4.53%) fell nearly 4% in after-hours trading after it said Antony Mattessich, who recently worked as MD at Mundipharma, will succeed Amar Sawhney as CEO on or before September 30.
American Software (AMSWA +8.13%) slid over 5% in after-hours trading after it reported preliminary Q4 revenue was down -9% y/y to $26.3 million.
Idera Pharmaceuticals (IDRA +1.17%) jumped over 13% in after-hours trading after it received Orphan Drug Status for its Melanoma IMO-2125 drug for patients with a certain type of metastatic melanoma.
MARKET COMMENTS
Sep E-mini S&Ps (ESU17 unch) this morning are down -0.75 of a point (-0.03%). Thursday's closes: S&P 500 -0.05%, Dow Jones -0.06%, Nasdaq -0.04%. The S&P 500 on Thursday closed little changed. Stocks were supported by the +0.7% m/m rise in U.S. Apr FHFA house price index (stronger than expectations of +0.5%) and by the +0.49% rally in crude oil prices, which boosted beaten-down energy stocks. The main drag on the market was weakness in consumer staples stocks.
Sep 10-year T-notes (ZNU17 -0.02%) this morning are down -0.5 of a tick. Thursday's closes: TYU7 unch, FVU7 +1.25. Sep 10-year T-notes on Thursday closed little changed. T-note prices were undercut by the larger-than-expected increase in the U.S. Apr FHFA house price index (+0.7% versus expectations of +0.5%) and by the rally in stocks, which curbed the safe-haven demand for T-notes. T-notes were supported by the dovish comment from by St. Louis Fed President Bullard that the Fed's current projected interest rate path is "unnecessarily aggressive."
The dollar index (DXY00 -0.19%) this morning is down -0.182 (-0.19%). EUR/USD (^EURUSD) is up +0.0014 (+0.13%) and USD/JPY (^USDJPY) is down -0.09 (-0.08%). Thursday's closes: Dollar index +0.034 (+0.03%), EUR/USD -0.0016 (-0.14%), USD/JPY -0.05 (-0.04%). The dollar index on Thursday closed little changed. The dollar was undercut by comments from St. Louis Fed President Bullard that the Fed's projected interest rate path is "aggressive," which signals he favors less monetary tightening. In addition, the jump in Eurozone Jun consumer confidence to a 16-year high was supportive for EUR/USD.
Aug WTI crude oil prices (CLQ17 +0.30%) this morning are up +9 cents (+0.21%) and Aug gasoline (RBQ17 +0.08%) is +0.0015 (+0.11%). Thursday's closes: Aug crude +0.21 (+0.49%), Aug gasoline +0.0198 (+1.41%). Aug crude oil and gasoline on Thursday closed higher. Crude oil prices were boosted by short-covering after the sharp sell-off this week to a 7-1/4 month low and a statement from OPEC that said OPEC and non-OPEC compliance with crude production cuts rose to 106% in May, up from 102% in Apr.
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