OVERNIGHT MARKETS AND NEWS
Mar E-mini S&Ps (ESH18 -0.45%) this morning are down -0.44% and European stocks are down -0.69%, following losses in Asian markets after China's Shanghai Composite fell to a 1-week low and Japan's Nikkei Stock Index fell to a 3-week low. Weakness in technology stocks is leading the overall market lower with Apple down 1% in pre-market trading. Apple is adding to Monday's losses when it fell 2.6% after Nikkei reported Apple notified suppliers it will cut iPhone X's production target for Q1 by half to 20 million units, due to slower-than-expected holiday sales. Energy stocks are lower as well with Mar WTI crude oil (CLH18 -0.98%) down -0.90% on expectations EIA data tomorrow will show U.S. crude stockpiles increased last week for the first time in eleven weeks. European stocks were also undercut after Eurozone Jan economic confidence unexpectedly declined. Asian stocks settled lower: Japan -1.43%, Hong Kong -1.09%, China -0.99%, Taiwan -1.29%, Australia -0.87%, Singapore -0.79%, South Korea -1.38%, India -0.69%. Weakness in technology stocks pushed Asian markets lower, led by losses in Apple suppliers, after Nikkei reported Apple would cut its Q1 iPhone X production in half.
The dollar index (DXY00 -0.26%) is down -0.28%. EUR/USD (^EURUSD) is up +0.39%. USD/JPY (^USDJPY) is down -0.32%.
Mar 10-year T-note prices (ZNH18 unch) are up +0.5 of a tick.
Eurozone Q4 GDP rose +0.6% q/q and +2.7% y/y, right on expectations.
Eurozone Jan economic confidence unexpectedly fell -0.6 to 114.7, weaker than expectations of +0.2 to 116.2. The Jan business climate indicator fell -0.06 to 1.54, weaker than expectations of +0.02 to 1.68.
UK Dec mortgage approvals were 61,000, less than expectations of 63,500 and the fewest in nearly 3-years.
Japan Dec overall household spending unexpectedly fell -0.1% y/y, weaker than expectations of +1.3% y/y.
The Japan Dec jobless rate unexpectedly rose +0.1 to 2.8%, worse than expectations of no change at 2.7%. The Dec job-to-applicant ratio rose +0.03 to a nearly 44-year high of 1.59, stronger than expectations of +0.01 to 1.57.
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) Nov S&P CoreLogic composite-20 home price index (expected +0.6% m/m and +6.35, Oct +0.7% m/m and +6.38% y/y), (2) Conference Board Jan U.S. consumer confidence (expected +0.9 to 123.0, Dec -6.5 to 122.1), (3) FOMC begins 2-day policy meeting, (4) President Trump’s State of the Union address.
Notable S&P 500 earnings reports today include: McDonalds (consensus $1.59), Electronic Arts (2.20), HCA Healthcare (1.87), Boston Properties (1.47), Aetna (1.17), PulteGroup (0.85), CD (0.60), Robert Half (0.60), Pfizer (0.56), Corning (0.47), Harley-Davidson (0.46), AMD (0.05).
U.S. IPO's scheduled to price today: none.
Equity conferences this week: none.
OVERNIGHT U.S. STOCK MOVERS
Apple (AAPL -2.07%) is down 1% in pre-market trading on carry-over weakness from Monday when it fell 2.6% when Nikkei reported Apple will cut its Q1 iPhone X production in half due to slower-than-expected holiday sales.
Healthcare Services Group (HCSG -0.75%) will replace Buffalo Wild Wings in the S&P Midcap 400 prior to the open of trading Monday, Feb 5.
Extreme Networks (EXTR -0.65%) will replace Time in the S&P SmallCap 600 prior to the open of trade on Thursday, Feb 1.
Ryder System (R -0.02%) gained over 1% in after-hours trading after reported a one-time gain of $11.04 a share from the U.S. Tax Act
MetLife (MET -0.68%) dropped almost 5% in after-hours trading after it said it found "material weakness" in review of annuity reserves.
Sun Hydraulics (SNHY -0.89%) slid 4% in after-hours trading after it reported preliminary 2017 adjusted EPS of $1.54-$1.58, below consensus of $1.64.
Hawaiian Holdings (HA +2.04%) rallied almost 4% in after-hours trading after it reported Q4 adjusted EPS of $1.10, above consensus of $1.04.
Sanmina (SANM +1.08%) dropped nearly 3% in after-hours trading after it said it sees Q2 revenue of $1.60 billion to $1.70 billion, the midpoint just below consensus of $1.655 billion.
Ultra Clean Holdings (UCTT -5.07%) tumbled nearly 10% in after-hours trading after it commenced an underwritten public offering of $100 million in common stock.
Rambus (RMBS +0.14%) dropped 8% in after-hours trading after it said t sees Q1 adjusted EPS of 12 cents to 19 cents, weaker than consensus of 20 cents.
Antero Resources (AR -2.70%) climbed almost 6% in after-hours trading after it said it was evaluating options including capital return to address its relative "discount in trading value."
Cymabay Therapeutics (CBAY -3.01%) fell 3% in after-hours trading after it filed a prospectus for offering shares of its common stock in an underwritten public offering.
Oclaro (OCLR -1.14%) gained almost 2% in after-hours trading after it was rated a new 'Buy' at Loop Capital Markets with a 12-month target price of $10.
Amarin Corp PLC (AMRN -6.09%) slid 4% in after-hours trading after it proposed a registered underwritten public offering of American Depositary Shares (ADRs), although no size was mentioned.
MARKET COMMENTS
Mar S&P 500 E-mini stock futures (ESH18 -0.45%) this morning are down -12.50 points (-0.44%). Monday's closes: S&P 500 -0.67%, Dow Jones -0.67%, Nasdaq -0.49%. The S&P 500 on Monday closed lower on profit-taking sparked by the jump in the 10-year T-note yield to a 3-3/4 year high of 2.72%. There was also weakness in energy stocks after crude oil prices fell -0.88%. Stocks found some support on the +0.4% increase in U.S. Dec personal income, slightly stronger than expectations of +0.3%.
Mar 10-year T-note prices (ZNH18 unch) this morning are up +0.5 of a tick. Monday's closes: TYH8 -8.00, FVH8 -3.00. Mar T-notes on Monday tumbled to a new contract low and the 10-year T-note yield soared to a 3-3/4 year high. T-note prices were undercut by negative carry-over from a jump in the German 10-year bund yield to a 2-year high of 0.704%, and by increased inflation expectations after the 10-year T-note breakeven inflation rate rose to 2.11%, a 3-1/3 year high. T-note prices were also undercut by the unexpected +3.7 point increase in the U.S. Jan Dallas Fed manufacturing activity to a 12-year high of 33.4.
The dollar index (DXY00 -0.26%) this morning is down -0.247 (-0.28%). EUR/USD (^EURUSD) is up +0.0048 (+0.39%) and USD/JPY (^USDJPY) is down -0.35 (-0.32%). Monday's closes: Dollar Index +0.241 (+0.27%), EUR/USD -0.0044 (-0.35%), USD/JPY +0.38 (+0.35%). The dollar index on Monday closed higher on the increase in the 10-year T-note yield to a 3-3/4 year high, which improves the dollar's interest rate differentials. There was also weakness in EUR/USD on dovish comments from ECB Executive Board member Praet who said an "ample degree of monetary accommodation is still needed" as the ECB "still has a way to go before inflation is on track toward its goal."
Mar crude oil (CLH18 -0.98%) this morning is down -59 cents (-0.90%) and Mar gasoline (RBH18 -0.91%) is -0.0167(-0.87%). Monday's closes: Mar WTI crude -0.58 (-0.88%), Mar gasoline -0.0103 (-0.53%). Mar crude oil and gasoline on Monday closed lower on a stronger dollar, on negative carry-over from Friday's Baker Hughes report that active U.S. oil rigs in the week ended Jan 26 rose by +13 to a 5-1/4 month high of 759, and on expectations for Wednesday's EIA data to show U.S. crude inventories rose +1.0 million bbl, the first increase in eleven weeks.
Metals prices this morning are mixed with Feb gold +3.1 (+0.23%), Mar silver +0.093 (+0.54%), and Mar copper -0.001(-0.03%). Monday's closes: Feb gold -11.8 (-0.87%), Mar silver -0.314 (-1.80%), Mar copper -0.005 (-0.16%). Metals on Monday closed lower on a stronger dollar and on the prediction by UBS that global 2018 copper mine supply growth may grow by +2.5% as mine disruptions ease in Chile.
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