OVERNIGHT MARKETS AND NEWS

September E-mini S&Ps (ESU14 +0.04%) this morning are up +0.01% and European stocks are up +0.22% as the markets await the latest monetary policy decision from the FOMC. The Fed will also release a new set of quarterly predictions for unemployment, inflation, economic growth and the Fed funds rate today. The Russian ruble strengthened for the first time in six days against the dollar when Ukraine said it will call for a unilateral cease fire this week. After talks between German President Merkel and Russian President Putin, Ukraine President Poroshenko said that government forces will unilaterally cease fire to allow pro-Russian separatists in the east of the country a chance to lay down weapons or leave the country. Asian stocks closed mixed: Japan +0.93%, Hong Kong -0.09%, China -0.43%, Taiwan +0.43%, Australia -0.33%, Singapore +0.07%, South Korea -0.66%, India -1.08%. Japanese stocks closed higher after the yen weakened, which boosts the earnings prospects of exporters. The yen retreated after trade data showed Japan May exports fell by the most in 15 months. Chinese stocks closed lower for a second day after data showed that China May new-home prices fell in half the cities tracked by the government for the first time in 2 years, which fuels concern a property slowdown will hurt economic growth. Commodity prices are mixed. July crude oil (CLN14 +0.29%) is up +0.31%. July gasoline (RBN14 +0.14%) is up +0.06%. Aug gold (GCQ14 -0.07%) is down -0.03%. July copper (HGN14+0.18%) is unch. Agriculture and livestock prices are mixed. The dollar index (DXY00 -0.10%) is down -0.10%. EUR/USD (^EURUSD) is up +0.14%. USD/JPY (^USDJPY) is up +0.03%. Sep T-note prices (ZNU14+0.14%) are up +5.5 ticks.

Data from China's National Bureau of Statistics showed that China May new-home prices fell in 35 of the 70 Chinese cities tracked by the data, the most in 2 years.

In the minutes of its Jun 4-5 meeting, the BOE said a rate increase this year may be more likely than investors anticipate. The BOE stated that the economy could maintain its pace of growth, and slack "would be absorbed more quickly than had previously been expected. In that context, the relatively low probability attached to a bank rate increase this year implied by some financial market prices was somewhat surprising."

The Japan May trade balance widened to a -909 billion yen deficit, less than expectations of a -1.189 trillion yen deficit. May exports fell -2.7% y/y, a larger decline than expectations of -1.3% y/y and the most in 15 months. May imports unexpectedly fell -3.6% y/y, weaker than expectations of +1.8% y/y and the biggest fall in 1-3/4 years.

Eurozone Apr construction output rose +0.8% m/m and +8.0% y/y. The +8.0% y/y increase was the biggest annual gain in 7 years.

U.S. STOCK PREVIEW

The FOMC at its 2-day meeting that concludes today is unanimously expected to taper QE3 by another $10 billion to $35 billion. The market is expecting today's Q1 current account deficit to widen to -$97.0 billion from -$81.1 billion in Q4. There are three of the Russell 1000 companies that report earnings today: FedEx (consensus $2.36), Jabil Circuit (-0.10), Red Hat (0.33).

Equity conferences this week include: Canadian Telecom Summit 2014 on Mon-Wed, Deutsche Bank Global Consumer Conference on Tue-Wed, Wells Fargo Securities Healthcare Conference on Tue-Wed, Predictive Analytics World Conference on Tue-Thu, Jefferies Global Consumer Conference on Wed-Thu, Nomura Corporate Day on Wed, Citi CorpGlobal Water Conference on Thu, Goldman Sachs European Chemicals Vision Conference on Thu, J.P. Morgan Oil & Gas Corporate Access Day on Thu, Morgan Stanley China Industrials Summit on Thu, and Noia Conference 2014 on Thu.

OVERNIGHT U.S. STOCK MOVERS

FedEx (FDX +0.62%) reported Q4 EPS of $2.46, better than consensus of $2.36.

Cracker Barrel (CBRL +0.36%) was downgraded to 'Hold' from 'Buy' at Argus.

Tyson Foods (TSN +0.91%) was upgraded to 'Outperform' from 'Market Perform' at BMO Capital.

SunPower (SPWR +4.30%) and GNC Holdings (GNC +2.60%) were both downgraded to 'Neutral' from 'Overweight' at JPMorgan Chase.

Alumina (AWC -1.75%) was downgraded to 'Underperform' from 'Neutral' at BofA/Merrill Lynch.

Gap (GPS +0.54%) was upgraded to 'Buy' from 'Speculative Buy' at Canaccord.

Cisco (CSCO -0.12%) was initiated with an 'Overweight' at Morgan Stanley witha price target of $30.

Diamond Foods (DMND +5.67%) was upgraded to 'Buy' from 'Hold' at KeyBanc.

C.R. Bard (BCR -0.08%) was downgraded to 'Equal Weight' from 'Overweight' at Barclays.

Walgreens (WAG -0.26%) was upgraded to 'Overweight' from 'Equal Weight' at Barclays.

Raymond Stachowiak reported a 9.39% stake in American Shared Hospital (AMS +5.91%) .

Adobe (ADBE -0.12%) gained 7% in after-hours trading after it reported Q2 EPS of 37 cents, well above consensus of 30 cents and said it sees a 'strong second half of the year.'

La-Z-Boy (LZB +5.12%) slumped 12% in after-hours trading after it reported Q4 adjusted EPS of 33 cents, higher than consensus of 32 cents, but reported Q4 revenue of $353.02 million, below consensus of $368.12 million.

MARKET COMMENTS

Sep E-mini S&Ps (ESU14 +0.04%) this morning are little changed, up +0.25 of a point (+0.01%). The S&P 500 index on Tuesday closed higher on increased M&A activity after Oracle was said to be near a deal to buy Micros Systems for more than $5 billion. Gains in stocks were muted after (1) May CPI rose +0.4% m/m and +2.1% y/y, higher than expectations of +0.2% m/m and +2.0% y/y with the +2.1% y/y gain the largest annual increase in 1-1/2 years, (2) May housing starts fell -6.5% to 1.001 million, a bigger decline than expectations of -3.9% to 1.030 million, and (3) the -6.4% slide in May building permits to 991,000, a bigger drop than expectations of -0.9% to 1.050 million. Closes: S&P 500 +0.22%, Dow Jones +0.16%, Nasdaq +0.04%.

Sep 10-year T-notes (ZNU14 +0.14%) this morning are up +5.5 ticks. Sep 10-year T-note futures prices on Tuesday closed lower. Bearish factors included (1) the larger-than-expected increase in May CPI, and (2) speculation that Fed Chair Yellen may be more hawkish in her post-FOMC comments on Wednesday. Losses were contained after May housing starts and building permits fell more than expected. Closes: TYU4 -14.50, FVU4 -8.50.

The dollar index (DXY00 -0.10%) this morning is down -0.084 (-0.10%). EUR/USD (^EURUSD) is up +0.0019 (+0.14%). USD/JPY (^USDJPY) is up +0.03 (+0.03%). The dollar index on Tuesday recovered from a 1-week low and closed higher. Supportive factors included (1) expectations for the Fed to taper QE3 by another $10 billion at the end of Wednesday's 2-day FOMC meeting, and (2) weakness in EUR/USD after the German Jun ZEW survey of expectations for economic growth unexpectedly fell to a 1-1/2 year low. Closes: Dollar Index +0.158 (+0.20%), EUR/USD -0.00267 (-0.20%), USD/JPY +0.314 (+0.31%).

July WTI crude oil (CLN14 +0.29%) this morning is up +33 cents (+0.31%). July gasoline (RBN14 +0.14%) is up +0.0018 (+0.06%). July crude and gasoline prices on Tuesday settled mixed. Bullish factors included (1) concern that the violence in Iraq may escalate and disrupt the country's oil production, the second-most in OPEC, and (2) expectations that Wednesday's weekly EIA inventory data will show that crude supplies fell -575,000 bbl and gasoline stockpiles dropped -400,000 bbl. Crude gave up early gains and closed lower after the dollar index rebounded from a 1-week low and closed higher. Closes: CLN4 -0.54 (-0.51%) RBN4 +0.0153 (+0.50%).

GLOBAL EVENT CALENDAR06/18/2014

U.S. STOCK CALENDAR06/18/2014