OVERNIGHT MARKETS AND NEWS

September E-mini S&Ps (ESU14 +0.35%) this morning are up +0.31% at a record high and European stocks are up +1.06% at a 3-week high on increased M&A activity. Burger King Worldwide gained over 5% in pre-market trading after saying it is in talks to acquire Tim Hortons Inc., which would make it the third-largest fast-food chain if the merger takes place. Intermune surged 35% in pre-market trading after Roche Holding AG said it purchased the biotechnology company for $8.3 billion. European stocks also received support on speculation the ECB may boost stimulus measures to support growth after a gauge of German business confidence fell for a fourth month and after ECB President Draghi said late last Friday at a Fed symposium in Jackson Hole, Wyoming that ECB policy makers "stand ready to adjust our policy stance further" and will us all available instruments to "ensure price stability over the medium term." Asian stocks closed mostly higher: Japan +0.48%, Hong Kong +0.22%, China -0.95%, Taiwan +0.11%, Australia -0.19%, Singapore +0.14%, South Korea +0.08%, India +0.07%. Japan's Nikkei Stock Index rose as exporters rallied on the prospects of improved earnings after the yen tumbled to a 7-month low against the dollar when BOJ Governor Kuroda said at Jackson Hole that BOJ monetary policy was "having its intended effect" and that global central banks must fight deflation by any and all means. Commodity prices are mixed. Oct crude oil (CLV14 +0.20%) is up +0.15%. Oct gasoline (RBV14 +0.20%) is up +0.14%. Dec gold (GCZ14 -0.02%) is down -0.13%. Sep copper (HGU14 +0.34%) is down -0.05%. Agriculture prices are mixed with Nov soybeans down -0.58% at a contract low on expectations for a bumper U.S. soybean harvest. The dollar index (DXY00 +0.21%) is up +0.18% at a fresh 11-1/2 month high amid speculation the Fed will raise interest rates before the ECB or the BOJ. EUR/USD (^EURUSD) is down -0.32% at an 11-1/2 month low after German Aug IFO business confidence fell more than expected to a 13-month low. USD/JPY (^USDJPY) is down -0.05% as it fell back from a 7-month high. The yen had slumped to a 7-month low after comments over the weekend at Jackson Hole, Wyoming from BOJ Governor Kuroda signaled the BOJ will maintain record stimulus. Sep T-note prices (ZNU14 +0.14%) are up +4.5 ticks on carry-over support from a rally in German bunds as the yield on Germany's 10-year bund tumbled to a record low 0.931%.

The German Aug IFO business climate fell -1.7 to 106.3, a larger decline than expectations of -1.0 to 107.0 and the lowest in 13 months. The Aug IFO current assessment fell -1.8 to 111.1, more than expectations of -0.9 to 112.0 and the lowest in 13 months. The Aug IFO expectations fell -1.7 to 101.7, more than expectations of -1.3 to 102.1 and the lowest in 15 months.

U.S. STOCK PREVIEW

The market is expecting today's July new home sales report to show a +5.4% increase to 428,000. There is one Russell 1000 company that reports earnings today: Premier (consensus $0.32). Equity conferences this week include: ONS 2014 Conference on Mon-Thu, Latin Markets 3rd Annual Peru Capital Projects & Infrastructure Summit on Wed, Simmons European Energy Conference on Wed, Jefferies Semiconductors, Hardware & Communications Infrastructure Summit on Wed, and MIT Sloan Latin America-China Conference on Fri.

OVERNIGHT U.S. STOCK MOVERS

Burger King Worldwide (BKW +1.01%) is up over 5% in pre-market trading after saying it is in talks to acquire Tim Hortons Inc.

Texas Roadhouse (TXRH +1.12%) was upgraded to 'Overweight' from 'Equal Weight' at Stephens.

Foot Locker (FL +2.95%) was downgraded to 'Neutral' from 'Overweight' at Piper Jaffray.

Boeing (BA -0.03%) announced an order by BOC Aviation for 82 airplanes worth $8.8 billion.

CBOE Holdings (CBOE +0.10%) was upgraded to 'Outperform' from 'Market Perform' at Raymond James.

U.S. Steel (X +2.66%) was upgraded to 'Outperform' from 'Underperform' at Credit Suisse.

Goldman Sachs (GS +0.18%) announced an agreement with FHFA to repurchase $3.15 billion in residential mortgage-backed securities, or RMBS, purchased by Fannie Mae and Freddie Mac over the 2005-2007 period to resolve all federal and state securities law claims brought by FHFA with respect to RMBS.

Zilkha Investments reported a 5.38% passive stake in Higher One (ONE -1.99%) .

JAT Capital reported a 6.73% stake in Madison Square Garden (MSG +2.28%) .

OrbiMed Advisors reported an 11.1% stake in Otonomy (OTIC +5.58%) .

MARKET COMMENTS

Sep E-mini S&Ps (ESU14 +0.35%) this morning are up +6.25 points (+0.31%) at a fresh all-time high. The S&P 500 index on Friday closed lower: S&P 500 -0.20%, Dow Jones -0.22%, Nasdaq +0.14%. Negative factors for stocks included (1) balanced comments from Fed Chair Yellen that prompted profit-taking in stocks after she wasn't as dovish as expected, and (2) increased tensions in Ukraine after Interfax reported that Ukraine sees a Russian aid convoy into the eastern part of its country as an invasion and after NATO said it sees an "alarming build-up" of Russian troops on the Ukraine border.

Sep 10-year T-notes (ZNU14 +0.14%) this morning are up +4.5 icks on carry-over support from a rally in German bunds to a record high. Sep 10-year T-note futures prices Friday fell to a 1-week low and closed lower. The main bearish factor for T-notes Friday was the balanced tone of Fed Chair Yellen's speech at Jackson Hole, which fueled long liquidation pressures since she was not as dovish as the market had expected. T-notes saw support from heightened tensions in Ukraine after NATO said it sees an "alarming build-up" of Russian troops on the Ukraine border. Closes: TYU4 -4.0, FVU4 -5.25.

The dollar index (DXY00 +0.21%) this morning is up +0.148 (+0.18%) at an 11-1/2 month high. EUR/USD (^EURUSD) is down -0.0043 (-0.32%) at an 11-1/2 month low and USD/JPY (^USDJPY) is down -0.05 (-0.05%). The dollar index on Friday climbed to an 11-1/2 month high and closed higher. Supportive factors for the dollar included (1) balanced comments from Fed Chair Yellen that boosted the likelihood the Fed will continue to taper QE3 and eventually begin to raise interest rates, and (2) the slide in EUR/USD to an 11-1/2 month low and the rally in USD/JPY to a 7-month high. Closes: Dollar index +0.182 (+0.22%), EUR/USD -0.0039 (-0.29%), USD/JPY +0.063 (+0.06%).

Oct WTI crude oil (CLV14 +0.20%) this morning is up +14 cents (+0.15%) and Oct gasoline (RBV14 +0.20%) is up +0.0035 (+0.14%). Oct crude and gasoline prices on Friday closed lower: CLV4 -0.51 (-0.33%), RBV4 -0.0102 (-0.39%). Bearish factors included (1) the rally in the dollar index to an 11-1/2 month high, which undercuts most commodities priced in dollars, and (2) comments from Fed Chair Yellen that raised demand concerns when she said "underutilization of labor resources still remains significant."