Overnight Markets and News

Jun E-mini S&Ps (ESM18 +0.06%) this morning are up +0.13% on optimism S&P 500 Q1 corporate earnings will continue to surprise to the upside. General Electric is up 3% in pre-market trading after it reported Q1 adjusted EPS of 16 cents, higher than expectations of 12 cents. Gains in the overall market were limited on increased trade tensions with China as the U.S. Treasury Department considers using an emergency law to curb Chinese investment in sensitive technologies. Under a 1977 low known as the International Emergency Economic Powers Act, President Trump could declare a national emergency in response to an "unusual and extraordinary threat," which allows him to block transactions and seize assets, according to assistant secretary in the international affairs office, Heath Tarbert. European stocks are up +0.48% at a 2-1/2 month high due to strength in exporter stocks. Exporters are gaining on weakness in EUR/USD (^EURUSD -0.28%) which is down -0.32% at a 1-1/2 week low after German Mar PPI rose less than expected, which is dovish for ECB monetary policy ahead of next Thursday's ECB meeting. Asian stocks settled mostly lower: Japan -0.13%, Hong Kong -0.94%, China -1.47%, Taiwan -1.75%, Australia -0.21%, Singapore -0.70%, South Korea -0.70%, India +0.11%. Weakness in Asian technology stocks undercut Asian bourses after Taiwan Semiconductor Manufacturing, Apple's main chip supplier, dropped 6% after it forecast weaker-than-expected revenue this quarter on slowing demand for smartphones. The IMF earlier this week had said that global smartphone shipments declined for the first time in 2017.

The dollar index (DXY00 +0.18%) is up +0.23% at a 1-1/2 week high. EUR/USD (^EURUSD -0.28%) is down -0.32% at a 1-1/2 week low. USD/JPY (^USDJPY +0.21%) is up +0.21%.

Jun 10-year T-note prices (ZNM18 +0-005) are little changed, up +0.5 of a tick.

Cleveland Fed President Mester said she doesn't expect inflation to pick up sharply even as unemployment is likely to fall below 4% this year and remain there through 2019. This "argues against a steep path" for interest rates and that "gradual rate hikes will be appropriate this year and next year."

German Mar PPI rose +0.1% m/m and +1.9% y/y was weaker than expectations of +0.2% m/m and +2.0% y/y.

Japan Mar national CPI rose +1.1% y/y, right on expectations. Mar national CPI ex fresh food rose +0.9% y/y, right on expectations. Mar national CPI ex fresh food & energy rose +0.5% y/y, also right on expectations.

U.S. Stock Preview

Key U.S. news today includes: (1) Chicago Fed President Charles Evans (non-voter) speaks on the economy and monetary policy at the Graaskamp Center Spring Board Conference in Chicago, (2) USDA Mar Cattle on Feed.

Notable S&P 500 earnings reports today include: GE (consensus $0.12), Honeywell ($1.91), SunTrust Banks (1.11), Waste Management (0.83), Stanley Black & Decker (1.35), Regions Financial (0.31), Citizens Financial Group (0.75), Roper Technologies (2.50), Synchrony Financial (0.76), Baker Hughes (0.06), Schlumberg (0.37), State Street (1.59), Kansas City Southern (1.33).

U.S. IPO's scheduled to price today: none.

Equity conferences this week: none.

Market Comments

June S&P 500 E-minis (ESM18 +0.06%) this morning are up +3.50 points (+0.13%). Thursday's closes: S&P 500 -0.57%, Dow Jones -0.34%, Nasdaq -0.85%. The S&P 500 on Thursday closed lower on weakness in technology stocks on trade tensions after China said Qualcomm’s purchase of NXP Semiconductors NV may have negative effects on the market. Stocks were also undercut by increased inflation expectations that may prompt the Fed into raising interest rates sooner than expected after the 10-year T-note breakeven inflation rate rose to a 3-1/2 year high of 2.19%. Stocks found some support from the unexpected +0.9-point increase in the U.S. Apr Philadelphia Fed business outlook survey to 23.2, stronger than expectations of -1.3 to 21.0.

June 10-year T-notes (ZNM18 +0-005) this morning are up +0.5 of a tick. Thursday's closes: TYM8 -10.00, FVM8 -4.00. Jun 10-year T-notes on Thursday fell to a 4-week low and closed lower on the jump in inflation expectations after the 10-year T-note breakeven inflation rate rose to a 3-1/2 year high. T-note prices were also undercut by the unexpected increase in the U.S. Apr Philadelphia Fed business outlook index (+0.9 to 23.2 versus expectations of -1.3 to 21.0).

The dollar index (DXY00 +0.18%) this morning is up +0.203 (+0.23%) at a 1-1/2 week high. EUR/USD (^EURUSD -0.28%) is down -0.0039 (-0.32%) at a 1-1/2 week low. USD/JPY (^USDJPY +0.21%) is up +0.23 (+0.21%). Thursday's closes: Dollar Index +0.317 (+0.35%), EUR/USD -0.0029 (-0.23%), USD/JPY +0.14 (+0.13%). The dollar index on Thursday closed higher on the stronger-than-expected U.S. Apr Philadelphia Fed business outlook index and the jump in the 10-year T-note yield to a 4-week high of 2.93%, which improves the dollar's interest rate differentials.

Metals prices this morning are mixed with Jun gold (GCM18 -0.33%) -5.6 (-0.42%), May silver (SIK18 -0.52%) -0.124 (-0.78%), and May copper (HGK18 +0.16%) +0.005 (+0.14%). Thursday's closes: Jun gold -4.70 (-0.35%), May silver -0.009 (-0.05%), May copper -0.0265 (-0.84%). Metals on Thursday closed lower on a stronger dollar and on weakness in nickel and aluminum prices, which undercut copper and silver prices, after the Russian government said it may come to the aid of Rusal, the largest aluminum supplier outside of China that was blacklisted by the U.S.

May crude oil prices (CLK18 -0.59%) his morning are down -12 cents (-0.18%) and May gasoline (RBK18 -0.27%) is +0.0011 (+0.05%). Thursday's closes: May crude -0.18 (-2.26%), May gasoline +0.091 (+0.44%). May crude oil and gasoline on Thursday settled mixed with May gasoline at a 7-1/2 month nearest-futures high. Crude oil prices were undercut by a stronger dollar and by a report that the OPEC/non-OPEC Joint Technical Committee that meets in Saudi Arabia on Friday will acknowledge the global crude surplus will soon end, which reduced speculation that the committee will seek to extend their crude production cuts past this year. Crude oil and gasoline prices were supported by positive carryover from Wednesday's EIA data showing that crude inventories unexpectedly fell -1.07 million bbl and gasoline supplies unexpectedly fell -2.97 million bbl.

Overnight U.S. Stock Movers

General Elecrtic (GE +2.42%) rose 3% in pre-market trading after it reported Q1 adjusted EPS of 16 cents, better than consensus of 12 cents.

Wells Fargo (WFC +2.28%) may open lower this morning after the Washington Post reported late Thursday afternoon that federal regulators are preparing to fine the bank $1 billion for auto insurance and mortgage lending abuses.

Pinnacle Foods (PF -2.63%) climbed almost 7% in after-hours trading after Jana Partners reported a 9.5% stake in the company and urged it to explore alternatives, including a sale of the company.

Herc Holdings (HRI -1.94%) was downgraded to 'Sell' from 'Neutral' at Goldman Sachs with a price target of $66.

Signature Bank (SBNY -3.10%) was upgraded to 'Outperform' from 'Market Perform' at Wells Fargo Securities with a price target of $160.

Atlassian Corp PLC (TEAM +0.32%) tumbled over 10% in after-hours trading after it forecast Q4 non-IFRS EPS of 12 cents, below consensus of 14 cents.

Werner Enterprises (WERN -1.05%) climbed nearly 4% in after-hours trading after it reported Q1 operating revenue of $562.7 million, higher than consensus of $554.3 million.

Skechers (SKX -0.31%) plunged 16% in after-hours trading after it forecast Q2 net sales of $1.12 billion to $1.15 billion, weaker than consensus of $1.16 billion.

Clearwater Paper (CLW +0.25%) slid nearly 3% in after-hours trading after it reported Q1 adjusted EPS of 31 cents, well below consensus of 65 cents.

Marten Transport Ltd (MRTN -2.10%) fell over 8% in after-hours trading after it reported Q1 operating revenue of $187 million, below consensus of $188.5 million.

Seaspan (SSN +2.00%) rose almost 5% in after-hours trading after it was upgraded to 'Buy' from 'Hold' at Deutsche Bank with a price target of $13.

Limelight Networks (LLNW -3.30%) rallied almost 9% in after-hours trading after it reported Q1 adjusted EPS of 6 cents, well above consensus of 2 cents, and then raised guidance on full-year adjusted EPS to 13 cents to 17 cents from a prior view of 11 cents to 15 cents, above consensus of 12 cents.

Turtle Beach (HEAR -2.32%) jumped over 10% in after-hours trading after it announced a new partnership with Knicks Gaming as the organization's official gaming peripherals partner for the 2018 NBA 2K League season.