Overnight Markets and News

June S&P 500 E-minis (ESM18 -0.47%) this morning are down -0.24% after China announced the implementation of its previously-announced tariffs on about $3 billion of U.S. goods in retaliation for U.S. steel and aluminum tariffs. Tech stocks remain on the defensive after President Trump over the weekend tweeted additional criticism of Amazon.com regarding its use of the U.S. Postal Service for deliveries. The markets are closed today for Easter Monday in UK, Australia, Canada, Hong Kong, and most of Europe. Asian stocks today closed mostly lower on continued trade tensions after China announced the implementation of its tariffs on U.S. products: Japan Nikkei -0.31%, China Shanghai -0.18%, Taiwan TAIEX -0.29%, Singapore Str. Times +0.08%, South Korea KOSPI 200 -0.19%, India BSE Sensex 30 +0.87%, Turkey ISE National 100 +0.09%.

The dollar index (DXY00 +0.10%) is trading slightly lower by -0.059 points (-0.07%), while EUR/USD (^EURUSD +0.17%) is slightly higher by +0.0004 (+0.03%) and USD/JPY (^USDJPY +0.04%) is little changed. The yen was undercut by the slightly weaker-than-expected Tankan report, although there was a survey showing some improved public support for Japanese Prime Minister Abe. June 10-year T-note prices are down -4.5 ticks.

May WTI crude oil (CLK18 +0.40%) prices are up +0.29 (+0.45%) and May gasoline (RBK18 +0.32%) is up +0.0071 (+0.35%) on some carry-over support from last Thursday's Baker Hughes report showing that the number of active U.S. oil rigs fell by 7 rigs. Metals prices are higher this morning on the slightly weaker dollar with April gold up +8.1 (+0.61%), May silver up +0.187 (+1.15%), and May copper up +0.038 (+1.26%). Grain prices this morning are showing solid gains on continued support from last Thursday's USDA Prospective Plantings report with May corn up 3.50 (+0.90%), May soybeans up +13.00 (+1.24%), and May wheat up +4.00 (+0.89%). May cotton is up 1.21 (+1.49%).

China on Sunday announced that its previously-announced tariffs on $3 billion worth of U.S. goods would take effect today. The tariffs on some 128 products were in response to President Trump's steel and aluminum tariffs. Those products include fruit, nuts, wine, pork, certain steel products, and others. China has not yet announced any retaliation for President Trump's tariffs on $50 billion of Chinese products for intellectual property violations.

China's weekend PMI data was mixed. Friday night's Chinese March manufacturing PMI rose by +1.2 points to 51.5, which was substantially stronger than market expectations of +0.3 to 50.6. The strong March report overcame Feb's -1.0 point decline and indicated that Chinese manufacturing confidence improved despite U.S. tariff threats and the strong yuan. Friday night's March non-manufacturing PMI rose by +0.2 points to 54.6, which was in line with market expectations and left the index at a solid level. However, Sunday night's Caixin China manufacturing PMI fell by -0.6 points to 51.0, which was weaker than market expectations of +0.1 to 51.7.

Sunday night's Japan Q1 Tankan report was slightly weaker than expected but still showed that Japanese business confidence is relatively strong since the indexes were all well above the positive-negative threshold of zero. The Q1 Tankan large-manufacturer index fell by -2 points to 24 from Q4's upwardly-revised 26 (preliminary 25), which was 1 point weaker than expectations of 25. The Q1 Tankan large-manufacturer outlook index fell by -1 point to 20 from Q4's upwardly-revised 21 (preliminary 19), which was 3 points below expectations of 22. The Q1 Tankan large non-manufacturer index fell by -2 points to 23 from Q4's upwardly-revised 25, which was 1 point below expectations of 24. The Q1 Tankan large-non-manufacturer outlook index was unchanged at 20, which was 1 point below expectations of 21.

The Tankan report carried some good news on capital spending with large companies saying they plan to boost capital investment by +2.3% in the fiscal year through 2019, which was stronger than market expectations of +1.0% and the +0.6% increase in the previous fiscal year.

President Trump on Saturday again tweeted criticism of Amazon.com, saying that the company was taking advantage of the U.S. Postal Service.

U.S. Stock Preview

Key U.S. news today includes: (1) final-Mar Markit manufacturing PMI (expected unrevised at 55.7, prelim-Mar +0.4 to 55.7), (2) Mar ISM manufacturing PMI (expected -0.8 to 60.0, Feb +1.7 to 60.8), (3) Feb construction spending (expected +0.4% m/m, Jan unch m/m), (4) USDA weekly grain export inspections, (5) Minneapolis Fed President Neel Kashkari (non-voter) speaks on monetary policy and the economy at a student town hall in Duluth, MN.

Notable Russell 1000 earnings reports today include: Switch Inc (consensus -$0.20).

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

Equity conferences this week: Cowen & Co. Future of the Consumer Conference on Tue.

Market Comments

Jun S&P 500 E-mini stock futures this morning are trading slightly lower due to China's implementation of previously-announced tariffs on about $3 billion of U.S. goods effective today. Thursday's closes: S&P 500 +1.42%, Dow Jones +1.31%, Nasdaq +1.86%. The S&P 500 on Thursday closed higher on a rebound in beaten-down technology stocks after two days of losses. Stocks were also supoprted by signs of U.S. labor market strength after weekly initial unemployment claims unexpectedly fell -12,000 to a 45-year low of 215,000 and after Feb U.S. personal income and spending were in line with expectations of +0.4% and +0.2%, respectively.

Jun 10-year T-note prices this morning are down -4.5 ticks. Thursday's closes: TYM8 +7.50, FVM8 +3.50. Jun 10-year T-notes on Thursday closed higher on slack inflation pressures after the Feb core PCE deflator, the Fed's preferred gauge of inflation, edged higher to +1.6% y/y from +1.5% but remained below the Fed's 2.0% target. T-note prices were also boosted by the unexpected decline in the Mar Chicago PMI by -4.5 points to a 1-year low of 57.4, weaker than expectations of +0.1 to 62.0.

The dollar index is trading slightly lower by -0.059 points (-0.07%), while EUR/USD is slightly higher by +0.0004 (+0.03%) and USD/JPY is little changed. EUR/USD is and USD/JPY is . Thursday's closes: Dollar Index +0.093 (+0.10%), EUR/USD +0.0003 (+0.02%), USD/JPY +0.04 (+0.04%). The dollar index on Thursday closed higher on the unexpected decline in U.S. weekly jobless claims to a 45-year low, which was hawkish for Fed policy. EUR/USD was undercut by the +1.5% y/y increase in German Mar CPI, weaker than expectations of +1.6% y/y and dovish for ECB monetary policy.

May WTI crude oil prices are up +0.29 (+0.45%) and gasoline is up +0.0071 (+0.35%) on some carry-over support from last Thursday's Baker Hughes report showing that the number of active U.S. oil rigs fell by 7 rigs. Thursday's closes: May crude +0.55 (+0.85%), May gasoline +0.0025 (+0.12%). May crude oil and gasoline on Thursday closed higher on the rally in stocks, which bolsters confidence in the economic outlook and energy demand, and on comments from Iraqi Oil Minister Jabbar al-Luaibi who said some OPEC producers and allies are considering prolonging their crude production cuts into the middle of next year.

Metals prices are higher this morning on the slightly weaker dollar with April gold up +8.1 (+0.61%), May silver up +0.187 (+1.15%), and May copper up +0.038 (+1.26%). Thursday's closes: Apr gold -1.4 (-0.11%), May silver +0.105 (+0.09%), May copper +0.0235 (+0.78%). Metals on Thursday settled mixed with Apr gold at a 1-week low. Metals prices were undercut by a stronger dollar, and by the rally in stocks, which reduced the safe-haven demand for precious metals. Copper rallied after LME copper inventories fell -5,100 MT, the first decline in the last five sessions.

Overnight U.S. Stock Movers

Facebook (FB +4.42%) CEO Zuckerberg told Vox in an interview that it will take "a few years" to fix Facebook

Walmart (WMT +1.37%) is moving closer to acquiring Humana (HUM)

Tesla (TSLA +3.24%) is trading lower on continued concern about the recent autonomous driving accident in California and news of a recall on Model S cars build before April 2016. Tesla is expected to announce Q1 delivery figures early this week.

Fitbit (FIT +3.87%) is trading lower after Morgan Stanley issued a negative opinion

Agilent's (A +0.75%) price target was raised to $95 from $90 at Morgan Stanley on stronger cyclical trends in the sector.

Northern Trust (NTRS +1.98%) was upgraded to Buy at Goldman and the price target was raised to $121 from $113.

Baker Hughes (BHGE -1.07%) was upgraded to 'Buy' from 'Neutral' at Bank of America-Merrill Lynch.