OVERNIGHT MARKETS AND NEWS

September E-mini S&Ps (ESU14 +0.48%) this morning are up +0.42% and European stocks are up +1.07% on reduced tensions in Ukraine after Russia said it ended military exercises near the Ukraine border. European bank stocks also rallied, led by an 8% jump in Italy's Banco Popolare, that rose after it unexpectedly reported a Q2 profit of 25 million euros ($33.5 million), better than consensus of a -12.8 million euro loss. Asian stocks closed higher: Japan +2.38%, Hong Kong +1.29%, China +1.47%, Taiwan +0.96%, Australia +0.40%, Singapore +0.53%, South Korea +0.50%, India +0.75%. Japan's Nikkei Stock Index climbed over 2% after Japan Jul consumer confidence rose to an 8-month high, and Chinese stocks rallied on speculation that benign inflation data will allow the government to implement additional stimulus measures after China Jul CPI rose +2.3% y/y, the same pace as in Jun and below the government’s 3.5% target. Commodity prices are mixed. Sep crude oil (CLU14 +0.06%) is up +0.08%. Sep gasoline (RBU14 -0.02%) is down -0.04%. Dec gold (GCZ14 -0.02%) is down -0.14%. Sep copper (HGU14 +0.33%) is up +0.52%. Agriculture prices are mixed. The dollar index (DXY00 +0.06%) is up +0.07%. EUR/USD (^EURUSD) is down -0.12%. USD/JPY (^USDJPY) is up +0.06%. Sep T-note prices (ZNU14 -0.12%) are down -5 ticks.

Speaking at a conference in Stockholm, Fed Vice Chairman Fischer said that sluggish U.S. labor supply growth is a "source of concern" because it may contribute to a slowdown in longer-run output of the economy, which also faces a drag from housing and "broad-based" slowing from emerging markets.

China Jun CPI rose +2.3% y/y, unchanged from Jun and right on expectations. PPI fell -0.9% y/y, right on expectations and the 30th consecutive month of falling producer prices.

UK Jul Lloyds employment confidence rose +5 to 6, the highest since the data series began in 2004.

Japan Jul consumer confidence rose +0.4 to 41.5, less than expectations of +0.9 to 42.0 but still the highest in 8 months.

The Japan Jun tertiary industry activity index unexpectedly fell -0.1% m/m, a bigger decline than expectations of unch m/m.

U.S. STOCK PREVIEW

Market attention his week will focus on (1) the geopolitical hotspots of Ukraine, Gaza, and Iraq, (2) the tail end of Q2 earnings season with only 18 of the S&P 500 companies reporting this week, (3) the Treasury’s sale of $67 billion on notes and bonds on Tuesday through Thursday, and (4) a fairly busy U.S. economic schedule.

There are 3 of the S&P 500 companies that report earnings today: Sysco (consensus $0.50), Priceline (12.02), Ventas (1.10). Equity conferences this week include: Avondale Partners Health Care Conference on Mon, Pacific Crest Global Technology Leadership Forum on Mon-Tue, Jefferies Global Industrials Conference on Mon-Thu, Goldman Sachs Power, Utilities, MLP & Pipeline Conference on Tue, Wedbush Life Sciences Management Access Conference on Tue, 8/12/2014 on Tue-Wed, J.P. Morgan Auto Conference on Tue, Oppenheimer Technology, Internet & Communications Conference on Tue-Wed, JP Morgan Auto Conference on Wed, Canaccord Genuity Growth Conference on Wed-Thu, and Barclays Summer Utilities Conference on Thu.

OVERNIGHT U.S. STOCK MOVERS

Freeport McMoRan (FCX +0.94%) was upgraded to 'Buy' from 'Hold' at Argus.

Priceline.com (PCLN -0.28%) reported Q2 EPS of$12.51, well ahead of consensus of $12.04.

Tesla Motors (TSLA -1.69%) rose over 2% in pre-market trading after Deutsche Bank upgraded the stock to 'Buy' from 'Hold.'

PepsiCo (PEP +0.43%) was upgraded to 'Buy' from 'Neutral' at UBS with a price target of $100.

Wal-Mart (WMT +0.97%) was downgraded to 'Hold' from 'Buy' at Jefferies.

Southwest Gas (SWX +2.94%) was upgraded to 'Buy' from 'Hold' at Brean Capital.

Hyatt Hotels (H -0.53%) was upgraded to 'Buy' from 'Hold' at Stifel.

Sentry Investments reported a 17.0% passive stake in Timmins Gold (TGD -0.57%) .

Capital Research reported a 10.1% passive stake in Herbalife (HLF +2.98%) and a 10.4% passive stake in GW Pharmaceuticals (GWPH +0.79%) .

Baupost Group reported a 14.06% passive stake in Veritiv (VRTV -0.21%) .

Karpus reported a 12.87% passive stake in Montgomergy Street Securities (MTS -0.98%) .

MARKET COMMENTS

Sep E-mini S&Ps (ESU14 +0.48%) this morning are up +8.00 points (+0.42%). The S&P 500 index on Friday closed higher: S&P 500 +1.15%, Dow Jones +1.13%, Nasdaq +0.78%. Bullish factors included (1) reduced tensions in Ukraine after Russia offered to mediate between the Ukraine government and separatists, and (2) signs of strength in the global economy after China Jul exports rose +14.5% y/y, more than double expectations of +7.0% y/y and the most in 15 months.

Sep 10-year T-notes (ZNU14 -0.12%) this morning are down -5 ticks. Sep 10-year T-note futures prices on Friday posted a 2-1/2 month high and closed higher. Bullish factors included (1) increased safe-haven demand after President Obama authorized U.S. air strikes against militants in Iraq, and (2) reduced inflation concerns after the stronger-than-expected increase in U.S. Q2 non-farm productivity report and the smaller-than-expected increase in Q2 unit labor costs. Closes: TYU4 +1.50, FVU4 -1.25.

The dollar index (DXY00 +0.06%) this morning is up +0.060 (+0.07%). EUR/USD (^EURUSD) is down -0.0016 (-0.12%) and USD/JPY (^USDJPY) is up +0.06 (+0.06%). The dollar index on Friday closed lower. Bearish factors included (1) strength in the yen after USD/JPY fell to a 2-week low when U.S. air strikes against militants in Iraq boosted safe-haven demand for the yen, and (2) the larger-than-expected increase in German Jun exports, which signals economic strength in the Eurozone and is positive for the euro. Closes: Dollar index -0.135 (-0.17%), EUR/USD +0.00472 (+0.35%), USD/JPY-0.055 (-0.05%).

Sep WTI crude oil (CLU14 +0.06%) this morning is up +8 cents (+0.08%) and Sep gasoline (RBU14 -0.02%) is down -0.0011 (-0.04%). Sep crude and gasoline prices on Friday settled mixed: CLU4 +0.31 (+0.32%), RBU4 -0.0186 (-0.67%). Crude prices fell back from their best levels on speculation U.S. air strikes against militants in Iraq will stabilize Iraq oil exports. Bullish factors included (1) a weaker dollar, and (2) signs of strength in the global economy after German Jun exports rose more than expected and after China Jul exports rose by the most in 15 months.