Overnight Markets And News

Dec E-mini S&Ps (ESZ18 +0.19%) this morning are up +0.15% at a 2-week high on expectations that data later this morning will show strong U.S. Aug retail sales and Aug manufacturing activity. Also, stocks moved higher as trade tensions on the prospects for new trade talks between the U.S. and China. European stocks are up +0.20% as strength in automakers leads the overall market higher. The German 10-year bund yield climbed to a 6-week high of 0.443% after Eurozone Q2 labor costs rose +2.2% y/y, the most in 5-1/2 years, which may prompt the ECB to tighten monetary policy sooner than expected. The Russian ruble climbed to a 1-1/2 week high against the dollar after the Russian central bank unexpectedly hiked its key benchmark rate for the first time since 2014 by 25 bp to 7.50% from 7.25%. Asian stocks settled mostly higher: Japan +1.20%, Hong Kong +1.01%, China -0.18%, Taiwan +1.31%, Australia +0.60%, Singapore +0.95%, South Korea +1.67%, India +0.99%. A rally in USD/JPY to a 6-week high Thursday fueled gains in Japanese exporter stocks that pushed the Nikkei Stock Index up to a 7-1/4 month high.

The dollar index (DXY00 -0.01%) is down -0.05% at a 6-week low on negative carry-over from Thursday's data that showed an unexpected slowdown in U.S. Aug core consumer prices. EUR/USD (^EURUSD +0.09%) is up +0.10% at a 2-week high after Eurozone Q2 labor costs rose at the fastest pace in 5-1/2 years, which is hawkish for ECB policy. USD/JPY (^USDJPY -0.04%) is down -0.08%. 
Dec 10-year T-note prices (ZNZ18 -0-060) are down -6 ticks at a 5-week low.

Eurozone Q2 labor costs rose +2.2% y/y, the fastest pace of increase in 5-1/2 years.

China Aug industrial production rose +6.1% y/y, right on expectations.

China Aug retail sales rose +9.0% y/y, stronger than expectations of +8.8% y/y.

U.S. Stock Preview

Key U.S. news today includes: (1) Aug retail sales (expected +0.4% and +0.5% ex autos, Jul +0.5% and +0.6% ex autos), (2) Aug import price index (expected -0.2% m/m and +4.1% y/y, Jul unch m/m and +4.8% y/y), (3) Chicago Fed President Charles Evans (non-voter) speaks at the Northeast Indiana Regional Economic Forum in Fort Wayne, IN, on current economic conditions and monetary policy, (4) Aug industrial production (expected +0.3%, Jul +0.1%), (5) Jul business inventories (expected +0.5%, Jun +0.1%), (6) Prelim-Sep University of Michigan U.S. consumer sentiment index (expected +0.4 at 96.6, Aug -1.5 to 96.2), (7) Boston Fed President Eric Rosengren (non-voter) speaks at the Brookings Conference on “Should the Fed Regularly Evaluate its Monetary Policy Framework?”

Notable Russell 2000 earnings reports today include: none.

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

Equity conferences during the remainder of this week: Barclays Global Financial Services Conference on Wed-Fri, Morgan Stanley Global Health Care Conference on Wed-Fri, Morgan Stanley Laguna Conference on Wed-Fri.

Market Comments

Dec S&P 500 E-minis (ESZ18 +0.19%) this morning are up +4.50 points (+0.15%) at a fresh 2-week high. Thursday's closes: S&P 500 +0.53%, Dow Jones +0.57%, Nasdaq 100 +0.98%. The S&P 500 on Thursday rose to a 2-week high and closed higher on reduced trade angst as U.S. and Chinese governments are working on the logistics for a new round of trade talks. Stocks were also boosted by the drop in U.S. initial unemployment claims to a 48-3/4 year low of 204,000 and by milder U.S. inflation pressures as the Aug core CPI eased to +2.2% y/y from July's +2.4%.

Dec 10-year T-notes this morning (ZNZ18 -0-060) are down -6 ticks at a 5-week low. Thursday's closes: TYZ8 -0.5, FVZ8 -0.75. Dec 10-year T-notes on Thursday recovered from a 5-week low and closed little changed on the smaller-than-expected +2.2% y/y increase in U.S. Aug core CPI, which was dovish for Fed policy. There was also dealer short-covering after Thursday's $15 billion auction of 30-year T-bonds ended this week's auctions of $73 billion in T-notes and T-bonds. T-note prices were undercut by the unexpected decline in weekly U.S. jobless claims to a 48-3/4 year low and by reduced safe-haven demand with the rally in the S&P 500 to a 2-week high.

The dollar index (DXY00 -0.01%) this morning is down -0.046 (-0.05%) at a 6-week low, EUR/USD (^EURUSD +0.09%) is up +0.0012 (+0.10%) at a 2-week high, and USD/JPY (^USDJPY -0.04%) is down -0.09 (-0.08%). Thursday's closes: Dollar Index -0.255 (-0.27%), EUR/USD +0.0064 (+0.55%), USD/JPY +0.66 (+0.59%). The dollar index on Thursday dropped to a 6-week low and closed lower on the weaker-than-expected U.S. Aug CPI report, which was dovish for Fed policy. There was also strength in EUR/USD which rallied to a 2-week high after ECB President Draghi made the hawkish comment that “despite some moderation following a strong 2017, the latest indicators overall confirm ongoing broad-based growth.”

Metals prices this morning are mixed with Dec gold (GCZ18 +0.25%) +3.5 (+0.29%), Dec silver (SIZ18 -0.03%) +0.011 (+0.08%) and Dec copper (HGZ18 -0.43%) -0.006 (-0.20%). Thursday's closes: Dec gold -2.7 (-0.22%), Dec silver -0.049 (-0.34), Dec copper +0.70 (+0.26%). Metals on Thursday settled mixed with Dec copper at a 2-week high. Metals prices were undercut by the weaker-than-expected U.S. Aug CPI report, which reduced demand for gold as an inflation hedge. Copper prices rallied on reduced trade tensions with the prospect for new U.S./China trade talks and signs of tighter supplies after LME copper inventories fell -7,500 MT to a 7-1/2 month low of 225,525 MT.

Oct WTI crude oil prices (CLV18 +0.35%) this morning are up +37 cents (+0.54%) and Oct gasoline (RBV18 -0.45%) is -0.34 (-0.17%). Thursday's closes: Oct crude oil -1.78 (-2.53%), Oct gasoline -4.19 (-2.06%). Oct crude oil and gasoline on Thursday closed lower on increased OPEC crude output after OPEC Aug crude production rose +420,000 bpd to 32.740 million bpd, an 11-month high. There was also some concern about crude demand in China, the world's second-largest crude consumer after President Trump tweeted that Chinese markets are "collapsing" due to the hardline stance by the U.S. on trade.

Overnight U.S. Stock Movers

Corning (GLW +3.09%) was upgraded to 'Buy' from 'Hold' at Citibank with a price target of $40.

Adobe Systems (ADBE +0.27%) lost 1% in after-hours trading after it forecast Q4 GAAP EPS of $1.42, weaker than consensus of $1.47.

Esperion Therapeutics (ESPR +1.32%) was rated a 'Buy' at Stifel with a price target of $89.

National Beverage (FIZZ -0.52%) was rated a new 'Sell' at Guggenheim Securities with a price target of $91.

AnaptysBio (ANAB +0.36%) was rated a 'Buy' at Stifel with a price target of $127.

Constellation Brands (STZ -0.54%) was rated a new 'Sell' at Guggenheim Securities.

Momenta Pharmaceuticals (MNTA -4.05%) was rated a 'Buy' at Stifel with a price target of $40.

Pacira Pharmaceuticals (PCRX +1.94%) was rated a new 'Sell' at Stifel with a price target of $41.

Vanda Pharmaceuticals (VNDA +0.27%) gained 1% in after-hours trading after it was rated a new 'Buy' at Stifel with a price target of $30.

Angi HomeServices (ANGI +3.74%) was rated a new 'Outperform' at Wedbush with a price target of $26.

Champions Oncology (CSBR +2.17%) surged 19% in after-hours trading after it reported Q1 revenue rose +24% to $6.2 million, stronger than expectations of $5.64 million.

Globalscape (GSB -1.01%) climbed nearly 4% in after-hours trading after it received an unsolicited offer to buy the company for $4.15 a share.

Radiant Logistics (RLGT +1.55%) jumped 14% in after-hours trading after it reported Q4 adjusted Ebitda of $9.9 million, well above consensus of $7.14 million.