OVERNIGHT MARKETS AND NEWS
Jun E-mini S&Ps (ESM17 -0.18%) this morning are down -0.41% at a 3-1/2 week low and European stocks are down -1.21% at a 3-week low. U.S. stock index futures were under pressure and extended Wednesday's losses on signs the political crisis surrounding President Trump will linger after Reuters reported that advisers in the Trump campaign may have had at least 18 previously undisclosed contacts with Russia. The slump in stocks has pushed up the VIX volatility index to a 6-month high and sent investors to the safe-haven of precious metals with Jun COMEX gold (GCM17 +0.06%) up +0.44% at a 2-week high, and into government bonds as the 10-year T-note yield fell to a 4-week low of 2.179%. Asian stocks settled lower: Japan -1.32, Hong Kong -0.62%, China -0.46%, Taiwan -0.44%, Australia -0.82%, Singapore -0.08%, South Korea -0.29%, India -0.73%. Japan's Nikkei Stock Index tumbled to a 2-week low, despite data that showed a faster pace of Japanese growth in Q1, as the slide in global stocks boosted safe-haven demand for the yen, which rose to a 3-week high and undercut Japanese exporter stocks.
The dollar index (DXY00 +0.01%) is down -0.07%. EUR/USD (^EURUSD) is down -0.20% as it fell back from a 6-1/4 month high after ECB Governing Council member Jazbec said it is too soon for the ECB to unwind QE. USD/JPY (^USDJPY) is down -0.32% at a 3-week low. GBP/USD soared +0.52% to a 7-1/2 month high after UK Apr retail sales climbed at a faster-than-expected pace.
Jun 10-year T-note prices (ZNM17 +0.06%) are up +8 ticks at a 6-month high.
ECB Governing Council member Jazbec said policy makers are not ready to unwind QE and "I would say that it is too soon to say firmly about any changes at all."
ECB Executive Board member Coeure said the ECB can't wait too long to signal the winding down of its stimulus measures as "too much gradualism in monetary policy bears the risk of larger market adjustments when the decision is eventually taken."
UK Apr retail sales ex auto fuel rose +2.0% m/m, stronger than expectations of +1.0% m/m and the biggest increase in 6-months. Apr retail sales including auto fuel rose +2.3% m/m, stronger than expectations of +1.1% m/m and the biggest increase in 15-months.
Japan Q1 GDP rose +2.2% (q/q annualized), stronger than expectations of +1.7% (q/q annualized). The Q1 deflator fell -0.8% y/y, weaker than expectations of -0.7% y/y and the fastest pace of decline in 4 years.
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) weekly initial unemployment claims (expected +4,000 to 240,000, previous -2,000 to 236,000) and continuing claims (expected +32,000 to 1.950 million, previous -61,000 to 1.918 million), (2) May Philadelphia Fed business outlook index (expected -3.5 to 18.5, Apr -10.8 to 22.0), (3) Apr leading indicators (expected +0.4%, Mar +0.4%), (4) Treasury Secretary Steven Mnuchin testifies before the Senate Banking Committee, (5) Treasury auctions $11 billion of 10-year TIPS, (6) Cleveland Fed President Loretta Mester speaks to the Economic Club of Minnesota, (7) USDA weekly Export Sales.
Notable Russell 2000 earnings reports today include: Wal-Mart (consensus $0.97), Gap (0.29), Autodesk (-0.23) Eagle Materials (0.85), Ralph Lauren (0.78), Ross Stores (0.80), Applied Materials (0.77), salesforc.com (0.26), McKesson (3.01).
U.S. IPO's scheduled to price today: none.
Equity conferences: Bank of America Merrill Lynch Health Care Conference on Tue-Thu, Barclays Americas Select Franchise Conference on Tue-Fri, BMO Capital Markets Farm to Market Conference on Wed-Thu, J.P. Morgan Homebuilding & Building Products Conference on Wed-Thu, MoffettNathanson Media & Communications Summit on Wed-Thu, RBC Capital Markets Canadian Automotive, Transportation & Industrials Conference on Thu, Barclays Water Symposium - Panel on Thu.
OVERNIGHT U.S. STOCK MOVERS
Wal-Mart (WMT +0.01%) reported Q1 EPS of $1.00, better than consensus of 96 cents, although Q1 revenue of $117.54 billion was below expectations of $117.74 billion.
L Brands (LB +0.23%) climbed nearly 6% in after-hours trading after it raised guidance on full-year EPS to $3.10-$3.40 from a prior view of $3.05-$3.35.
Cisco Systems (CSCO -1.40%) slumped 8% in after-hours trading after it said its sees Q4 adjusted EPS of 60 cents-62 cents, below consensus of 62 cents.
Vertex Pharmaceuticals (VRTX -3.14%) gained almost 1% in after-hours trading after it raised it 2017 sales view on its Kalydeco to $740 million-$770 million from an April 27 view of $710 million-$730 million after the FDA widened its approval to treat more CF mutations.
Incyte (INCY +2.32%) rallied over 7% in after-hours trading after data showed its IDO1 inhibitor epacadostat in combinations with Merck's Keytruda and Bristol-Meyers Squibb's Opdivo showed more responses than the PDL1 inhibitors alone.
Globus Medical (GMED -1.45%) dropped 7% in after-hours trading after it said it received a letter from the FDA informing the company that it had not sufficiently addressed the agency's questions regarding its ExcelsiusGPS.
NewLink Genetics (NLNK -1.53%) tumbled 13% in after-hours trading after data for its IDO inhibitor navoximod in combination with Roche's Tecentriq disappointed in a study of patients with locally advanced or metastatic solid tumors.
China Distance Education Holdings Ltd (DL -2.04%) lost over 2% in after-hours trading after it reported Q1 gross profit fell -26.7% y/y to $10.1 million.
Leap Therapeutics (LPTX -0.63%) jumped over 12% in after-hours trading after it reported interim data from a Phase 1 study showed DKN-01 in combination with gemcitabine and cisplatin for treatment of advanced bilary tract cancers was well tolerated with no new adverse effects.
Endologix (ELGX -1.03%) sank over 20% in after-hours trading after it said it met with the FDA and does not see approval of its Nellix EndoVascular Aneurysm Sealing System until 2020.
GlycoMimetics (GLYC unch) surged over 35% in after-hours trading after the FDA granted its GMI-1271 breakthrough therapy designation for treatment of adult relapsed/refractory acute myeloid leukemia.
ImmunoGen (IMGN -2.67%) gained over 2% in after-hours trading after it said early-stage data support a study of its soravtansine further in combination with Roche's Avastin and Merck's Keytruda in treatment of ovarian cancer.
Pandora Media (P -4.49%) jumped 8% in after-hours trading after the New York Post reported that Sirius XM recently restarted talks to make a bid for Pandora.
Ascena Retail Group (ASNA -1.74%) plunged over 30% in after-hours trading after it said it sees Q3 comparable sales down -8% and lowered guidance on full-year adjusted EPS to 10 cents-15 cents from a Mar 6 view of 37 cents-42 cents.
MARKET COMMENTS
June E-mini S&Ps (ESM17 -0.18%) this morning are down -9.75 points (-0.41%) at a 3-1/2 week low. Wednesday's closes: S&P 500 -1.82%, Dow Jones -1.78%, Nasdaq -2.51%. The S&P 500 on Wednesday tumbled to a 3-week low and closed sharply lower on market uncertainty caused by the political upheaval in Washington that boosted the VIX volatility index to a 3-week high and led to long liquidation pressures in stocks.
June 10-year T-notes (ZNM17 +0.06%) this morning are up +8 ticks at a 6-month high. Wednesday's closes: TYM7 +28.00, FVM7 +15.75. Jun 10-year T-notes on Wednesday rallied to a 3-week high and settled higher on the slump in the S&P 500 to a 3-week low, which boosted the safe-haven demand for T-notes, and on reduced inflation expectations after the 10-year T-note breakeven inflation expectations rate fell to 6-1/4 month low.
The dollar index (DXY00 +0.01%) this morning is down -0.067 (-0.07%). EUR/USD (^EURUSD) is down -0.22 (-0.20%) and USD/JPY (^USDJPY) is down -0.35 (-0.32%) at a 3-week low. Wednesday's closes: Dollar index -0.691 (-0.70%), EUR/USD +0.0076 (+0.69%), USD/JPY -2.29 (-2.02%). The dollar index on Wednesday slid to a 6-1/4 month low and closed lower on concern that the political turmoil in Washington will keep the Republicans from carrying out their pro-growth economic agenda and the fall in the 10-year T-note yield to a 3-week low, which reduces the dollar's interest rate differentials.
June WTI crude oil prices (CLM17 -1.43%) this morning are down -88 cents (-1.79%) and June gasoline (RBM17 -1.78%) is -0.0377 (-2.35%). Wednesday's closes: Jun crude +0.41 (+0.84%), Jun gasoline -0.0016 (-0.10%). Jun crude oil and gasoline on Wednesday settled mixed. Crude oil prices were boosted by the sell-off in the dollar index to a 6-1/4 month low and by the -1.75 million bbl decline in weekly EIA crude inventories, the sixth consecutive week that inventories have fallen. Crude oil prices were also boosted by -0.1% decline in U.S. crude production in the week ended May 12, the first decline in the last thirteen weeks. Gasoline closed lower after EIA gasoline inventories fell -412,999 bbl, a smaller decline than expectations of -1.0 million bbl.
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