OVERNIGHT MARKETS AND NEWS
Mar E-mini S&Ps (ESH18 +0.33%) this morning are up +0.30% after the U.S. Senate passed tax reform legislation by a 51-48 vote early this morning. The tax bill now goes back to the House for a second vote in a procedural move before it goes to President Trump to be signed into law. Also, energy stocks and mining companies are higher with Feb WTI crude oil (CLG18 +0.36%) up +0.33 % at a 1-week high and Mar COMEX copper (HGH18 +0.63%)up +0.63% at a 3-week high. Crude gained after the API reported late Tuesday that U.S. crude stockpiles fell -5.2 million bbl last week, while optimism in the global economic outlook fueled fund buying of copper. European stocks are down -0.39% due to increased political risks in Spain ahead of Thursday's vote in Catalonia where the secession movement leads in the polls. Asian stocks settled mixed: Japan +0.10%, Hong Kong -0.07%, China -0.27%, Taiwan +0.36%, Australia +0.06%, Singapore -0.28%, South Korea -0.30%, India -0.18%.
The dollar index (DXY00 +0.02%) is up +0.04%. EUR/USD (^EURUSD) is down -0.01%. USD/JPY (^USDJPY) is up +0.24%.
Mar 10-year T-note prices (ZNH18 -0.01%) are little changed, up +0.5 of a tick.
UK Dec CBI retailing reported sales fell -6 to 20, right on expectations.
German Nov PPI of +0.1% m/m and +2.5% y/y was weaker than expectations of +0.2% m/m and +2.6% y/y with the +0.1% m/m gain the smallest monthly increase in 5 months.
The Japan Oct all-industry activity index rose +0.3% m/m, right on expectations.
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) weekly MBA mortgage applications (previous -2.3% with purchase sub-index -1.1% and refi sub-index -2.5%), (2) Nov existing home sales (expected +0.9% to 5.53 million, Oct +2.0% to 5.48 million), (3) EIA weekly Petroleum Status Report.
Notable Russell 1000 earnings reports today include: General Mills (consensus $0.82), Bed Bath & Beyond (0.37).
U.S. IPO's scheduled to price today: Hancock Jaffe Labs (HJLI), LexinFintech Holdings (LX).
Equity conferences this week: none.
OVERNIGHT U.S. STOCK MOVERS
FedEx (FDX +0.26%) climbed over 1% in after-hours trading after it reported Q2 adjusted EPS of $3.18, higher than consensus of $2.88, and then raised guidance on full-year adjusted EPS to $12.70 to $13.30 from a prior view of $12.00 to $12.80, better than consensus of $12.47.
Red Hat (RHT -0.45%) dropped 4% in after-hours trading after it reported a Q3 adjusted gross margin of 86.2%, below consensus of 86.5%.
United Continental Holdings (UAL -0.20%) gained almost 1% in after-hours trading after it was upgraded to 'Buy' from 'Neutral' at Buckingham Research Group with a price target of $81.
Micron Technology (MU +0.62%) rose nearly 5% in after-hours trading after it reported Q1 adjusted EPS of $2.45, better than consensus of $2.21, and said it sees Q2 adjusted EPS of $2.51 to $2.65, well above consensus of $2.04.
Ionis Pharmaceuticals (IONS -2.60%) gained 2% in after-hours trading after it announced a collaboration with Biogen to identify new antisense oligonucleotide drug candidates for spinal muscular atrophy.
REV Group (REVG -0.24%) dropped over 7% in after-hours trading after it reported Q4 net sales of $683.9 million, weaker than consensus of $705.6 million.
Aramark (ARMK +0.96%) was rated a new 'Buy' at Stifel with a 12-month target price of $50.
Steelcase (SCS -0.69%) slid 7% in after-hours trading after it said it sees Q4 adjusted EPS of 14 cents to 18 cents, below consensus of 22 cents.
Metropolitan Bank Holding (MCB -6.30%) rose 1% in after-hours trading after Piper Jaffray boosted its EPS estimate for MCB by 6% due to its exposure to a cryptocurrency exchange.
Stitch Fix (SFIX +3.82%) tumbled over 10% in after-hours trading after it said it expects Q2 adjusted earnings before interest, tax, depreciation and amortization will be $11.5 million to $15.5 million, the mid-point below consensus of $15.5 million, as it spends more for advertising and customer growth.
Catalyst Biosciences (CBIO -5.77%) fell 7% in after-hours trading after it announced a proposed public offering of common stock, although no size was given.
TherapeuticsMD (TXMD -6.37%) dropped nearly 8% in after-hours trading after the FDA set a 6-month timeline to review TXMD's resubmission of its TX-004HR application, longer than the 2-months analysts had anticipated.
MARKET COMMENTS
Mar S&P 500 E-mini stock futures (ESH18 +0.33%) this morning are up +8.00 points (+0.30%). Tuesday's closes: S&P 500 -0.32%, Dow Jones -0.15%, Nasdaq -0.50%. The S&P 500 on Tuesday closed lower on negative carry-over from a slide in European stocks after the German Dec IFO business climate unexpectedly declined. There was also some long-liquidation pressure in stocks after the U.S. House passed the Republican tax-reform package, sending the bill to the Senate. Stocks found some support on the unexpected +3.3% increase in U.S. Nov housing starts to a 13-month high of 1.297 million, stronger than expectations of -3.1% to 1.250 million.
Mar 10-year T-note prices (ZNH18 -0.01%) this morning are up +0.5 of a tick. Tuesday's closes: TYH8 -17.50, FVH8 -7.75.Mar 10-year T-notes on Tuesday fell to a contract low and the 10-year T-note yield rose to a 1-1/2 month high. T-note prices were undercut by the unexpected increase in U.S. Nov housing starts to a 13-month high and by increased inflation expectations after the 10-year T-note breakeven inflation rate jumped to a 7-1/2 month high.
The dollar index (DXY00 +0.02%) this morning is up +0.037 (+0.04%). EUR/USD (^EURUSD) is down -0.0001 (-0.01%) and USD/JPY (^USDJPY) is up +0.27 (+0.24%). Tuesday's closes: Dollar Index -0.254 (-0.27%), EUR/USD +0.0058 (+0.49%), USD/JPY +0.34 (+0.30%). The dollar index on Tuesday closed lower on strength in EUR/USD on hawkish comments from ECB Governing Council member Makuch who said ECB discussions are moving from asset purchases to the eventual future use of interest rates to regulate the economy. There was also some long liquidation pressure in the dollar after U.S. House passed the Republican tax reform plan.
Feb crude oil (CLG18 +0.36%) this morning is up +19 cents (+0.33%) at a 1-week high and Feb gasoline (RBG18 +0.37%) is +0.0056 (+0.33%). Feb WTI crude +0.30 (+0.52%), Feb gasoline +0.0241 (+1.44%). Feb crude oil and gasoline on Tuesday closed higher on the weaker dollar and the ongoing closure of the Forties Pipeline System that has underpinned Brent crude prices. Crude oil prices were also boosted by expectations for weekly EIA crude inventories on Wednesday to fall -3.0 mln bbl to a 2-year low.
Metals prices this morning are higher with Feb gold (GCG18 +0.38%) +4.3 (+0.34%) at a 2-week high, Mar silver (SIH18+0.69%) +0.092 (+0.57%) and Mar copper (HGH18 +0.63%) +0.020 (+0.63%) at a 3-week high. Tuesday's closes: Feb gold -1.3 (-0.10%), Mar silver -0.052 (-0.32%), Mar copper +0.0055 (+0.17%). Metals on Tuesday settled mixed with Mar copper at a 3-week high. Metals prices were boosted by dollar weakness and by the stronger-than-expected U.S. Nov housing starts and building permits report, which was supportive for copper demand. Gold prices fell on hawkish comments from ECB Governing Council member Makuch who said ECB discussions are moving from asset purchases to the eventual future use of interest rates to regulate the economy.
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