OVERNIGHT MARKETS AND NEWS
Sep E-mini S&Ps (ESU16 +0.21%) are up +0.21% and European stocks are up +1.39% ahead of the FOMC's policy decision later today. Mining stocks are raw-material producers are leading the overall market higher with the price of copper (HGN16 +2.72%) up +2.67% at a 1-week high. Gains were limited as energy producing stocks were under pressure as the price of crude oil (CLN16 -0.87%) is down -0.97% at a 3-week low after the API late yesterday reported a 1.16 million bbl increase in U.S. oil inventories for last week. Asian stocks settled mostly higher: Japan +0.38%, Hong Kong +0.39%, China +1.58%, Taiwan +0.35%, Australia -1.08%, Singapore +0.21%, South Korea -0.02%, India +1.25%. China's Shanghai Composite had opened lower at a 2-week low and the yuan plunged to a 5-1/3 year low against the dollar after MSCI Inc. refused to add China's domestic equities to benchmark indexes. However, prices recovered and closed higher amid speculation that state-backed funds were buying stocks to support the market. China's yuan also fell back from a 5-1/3 year low on speculation the PBOC was supporting the currency.
The dollar index (DXY00 -0.16%) is down -0.15%. EUR/USD (^EURUSD) is up +0.19%. USD/JPY (^USDJPY) is up +0.18%.
Sep T-note prices (ZNU16 -0.12%) are down -6 ticks.
In a surprise move to many, MSCI decided against adding Chinese domestic equities to its global benchmark indexes. While China implemented a number of measures over the past year to meet the requirements of MSCI, including curbs on arbitrary trading halts and looser restrictions on cross-border capital flow, MSCI said that investors needed time to assess the effectiveness of such policy changes and that further improvements are needed.
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) weekly MBA mortgage applications (previous +9.3% with purchase sub-index +11.7% and refi sub-index +7.4%), (2) May PPI final demand (expected +0.3% m/m and -0.1% y/y, Apr +0.2% m/m and unch y/y) and May PPI ex food & energy (expected +0.1% m/m and +1.0% y/y, Apr +0.1% m/m and +0.9% y/y), (3) Jun Empire manufacturing survey general business conditions index (expected +4.52 to -4.50, May-18.58 to -9.02), (4) May industrial production (expected -0.2%, Apr +0.7%) (5) the outcome of the 2-day FOMC meeting including a press conference by Fed Chair Yellen, and (6) EIA Weekly Petroleum Status Report.
There is one of the Russell 1000 companies that reports earnings today: Jabil Circuit (consensus $0.16).
U.S. IPO's scheduled to price today: none.
Equity conferences this week include: William Blair & Company Growth Stock Conference on Tue-Thu, Piper Jaffray Consumer Conference on Wed, and RBC Capital Markets Global Financial Technology Investor Day on Thu.
OVERNIGHT U.S. STOCK MOVERS
U.S. Steel (X -4.44%) was upgraded to 'Neutral' from 'Under Perform' at Bank of America/Merrill Lynch
Cisco (CSCO +0.42%) was downgraded to 'Neutral' from 'Buy' at Goldman Sachs.
Best Buy (BBY -0.58%) was downgraded to 'Neutral' from 'Outperform' at Credit Suisse.
United Therapeutics (UTHR -2.54%) was downgraded to 'Neutral' from 'Buy' at HC Wainwright & Co. LLC.
Select Equity Group cut its stake in Shake Shack (SHAK +3.44%) to 5.5% from 7.4%, according to a Schedule 13D.
Salesforce.com (CRM -0.49%) was rated a new 'Outperform' at BMO Capital Markets with a target price of $98.
Cynapsus Therapeutics (CYNA +0.14%) was rated a new 'Buy' at Janney Montgomery with a 12-month price target of $24.
LinkedIn (LNKD -0.30%) was downgraded to 'Sector Perform' from 'Outperform' at RBC Capital Markets.
Infinity Pharmaceuticals (INFI -69.16%) was downgraded to 'Market Perform' from 'Outperform' at Wells Fargo Securities.
Bob Evans Farms (BOBE +0.95%) lost nearly 6% in after-hours trading after it lowered guidance on full-year adjusted EPS to $2.00-$2.15, below consensus of $2.19.
Hi-Crush Partners LP (HCLP +0.85%) dropped over 6% in after-hours trading after it announced a public offering of 3 million common units.
Liberty Tax (TAX +3.52%) slid over 2% in after-hours trading after it reported fiscal 2016 non-GAAP EPS of $1.41, below consensus of $1.79.
Scorpio Bulkers (SALT -7.71%) tumbled over 7% in after-hours trading after it announced a public offering of 20 million shares of common stock.
MARKET COMMENTS
September E-mini S&Ps (ESU16 +0.21%) this morning are up +4.25 points (+0.21%). Tuesday's closes: S&P 500 -0.18%, Dow Jones -0.33%, Nasdaq +0.05%. The S&P 500 on Tuesday sold off to a 3-week low and closed lower on negative carryover from the slump in European stocks to a 3-3/4 month low on concern Britain will vote to leave the EU on June 23. Stocks were also undercut by dollar strength that undercut commodity prices and fueled losses in energy and raw-material producing stocks. Stocks received support from the news that U.S. May retail sales rose +0.5% and +0.4% ex-autos, stronger than expectations of +0.3% and +0.4% ex-autos.
September 10-year T-note prices (ZNU16 -0.12%) this morning are down -6 ticks. Tuesday's closes: TYU6 +0.50, FVU6 +0.75. Sep T-notes on Tuesday rallied to a new contract high and closed higher on the slide in global stocks on Brexit concerns, which fueled safe-haven demand for T-notes. T-notes also received a boost from a rally in German bunds to a record high as the 10-year bund yield fell below zero for the first time and from reduced inflation expectations as the 10-year T-note breakeven inflation rate sank to a 3-month low. T-notes were undercut by the stronger-than-expected U.S. May retail sales report of +0.5%.
The dollar index (DXY00 -0.16%) this morning is down -0.140 (-0.15%). EUR/USD (^EURUSD) is up +0.0021 (+0.19%). USD/JPY (^USDJPY) is up +0.19 (+0.18%). Tuesday's closes: Dollar Index +0.566 (+0.60%), EUR/USD -0.0085 (-0.75%), USD/JPY -0.15 (-0.14%). The dollar index on Tuesday climbed to a 1-week high and settled higher on Brexit concerns that undercut GBP/USD as it fell to a 2-month low and EUR/USD which dropped to a 1-week low. The dollar index was also boosted by the stronger-than-expected U.S. May retail sales report.
July WTI crude oil (CLN16 -0.87%) this morning is down -47 cents (-0.97%) at a 3-week low. July gasoline (RBN16 -2.11%) is down -0.0341 (-2.24%) at a 1-month low. Tuesday's closes: CLN6 -0.39 (-0.80%), RBN6 -0.0149 (-0.97%). July crude and gasoline on Tuesday closed lower with July crude at a 1-week low and Jul gasoline at a 1-month low. Crude oil prices were undercut by the rally in the dollar index to a 1-week high and by the slump in the S&P 500 to a 3-week low, which reduces optimism in the economy and in energy demand. Crude oil received some underlying support from the IEA's cut in its 2016 global crude oil surplus estimate to 800,000 bpd from May's estimate of 1.3 million bpd and from expectations for Wednesday's weekly EIA data to show crude inventories fell -2.5 million bbl.
Comments
Log in or sign up to join the conversation.