OVERNIGHT MARKETS AND NEWS

Mar E-mini S&Ps (ESH18 +0.39%) this morning are up +0.37% and European stocks are up +0.51%, both at 3-week highs, as market volatility recedes after the VIX volatility index fell to a 3-week low. Reduced interest rate concerns are also positive for equity prices after the 10-year T-note yield dropped to a 1-week low of 2.85%. The markets eagerly await Tuesday's testimony to Congress from newly appointed Fed Chair Powell. Asian stocks settled higher: Japan +1.19%, Hong Kong +0.74%, China +1.23%, Taiwan +0.39%, Australia +0.71%, Singapore +0.64%, South Korea +0.17%, India +0.89%. Asian markets rallied on the heels of the rally in U.S. markets Friday as both China's Shanghai Composite and Japan's Nikkei Stock Index posted 2-week highs.

The dollar index (DXY00 +0.16%) is down -0.28%. EUR/USD (^EURUSD) is up +0.32%. USD/JPY (^USDJPY) is down -0.10%.

Mar 10-year T-note prices (ZNH18 +0.09%) are up +2 ticks at a 1-week high.

The Japan Dec leading index CI was revised lower to 107.4 from the originally reported 107.9. The Dec coincident index was revised lower to 120.2 from the originally reported 120.7, but still is the highest in 27-years.

China Jan new home prices rose +0.3% m/m and +5.0% y/y, weaker than the +0.4% m/m and +5.3% y/y increase from Dec.

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) Jan Chicago Fed national activity index (expected -0.07 to 0.20, Dec +0.16 to 0.27), (2) Jan new home sales (expected +3.6% to 648,000, Dec -9.3% to 625,000), (3) Feb Dallas Fed manufacturing activity (expected -3.4 to 30.0, Jan +3.7 to 33.4), (4) USDA weekly grain export inspections.

Notable S&P 500 earnings reports today include: SBA Communications (consensus $1.53), Scripps (1.18), ONEOK (0.53).

U.S. IPO's scheduled to price today: Union Acquisition (LTN/U).

Equity conferences this week: Bank of America Merrill Lynch Animal Health Summit on Mon, GSMA Mobile World Congress on Mon, Morgan Stanley European MedTech & Services Conference on Mon, BMO Capital Markets Global Metals & Mining Conference on Mon-Tue, Morgan Stanley MLP Diversified Natural Gas, Utilities & Clean Tech Conference on Mon-Tue, JMP Securities Technology Conference on Mon-Tue, Morgan Stanley Technology, Media & Telecom Conference on Mon-Wed, J.P. Morgan Global High Yield & Leveraged Finance Conference on Tue, KeyBank Capital Markets Emerging Technology Summit on Tue, MUFG Securities REITs Corporate Access Day on Tue, Wolfe Research Smart Ideas Conference on Tue, Barclays MLP Conference on Tue, Simmons & Company International Energy Conference on Wed, Bank of America Merrill Lynch Global Agriculture and Chemicals Conference on Wed-Thu, Keefe, Bruyette, & Woods Cards, Payments & Financial Technology Symposium on Thu, Simmons Energy Conference - Panel on Thu.

OVERNIGHT U.S. STOCK MOVERS

United Parcel Service (UPS +0.50%) was upgraded to 'Buy' from 'Hold' at Loop Capital Markets with a 12-month target price of $131.

HP Inc (HPQ +3.46%) was upgraded to 'Overweight' from 'Neutral' at JPMorgan Chase with a 12-month target price of $28.

Guess? (GES +1.35%) was upgraded to 'Buy' from 'Neutral' at B Riley FBR.

American Water (AWK +2.40%) was upgraded to 'Outperform' from 'Market Perform' with a price target of $88.

General Mills (GIS -3.59%) was downgraded to 'Sell' from 'Hold' at Societe Generale with a target price of $48.

Mattel (MAT unch) was downgraded to 'Underperform' from 'Hold' at Jeffries with a target price of $13.

Halliburton (HAL +2.80%) was downgraded to 'Neutral' from 'Buy' at Bank of America Merrill Lynch.

Albemarle ({=ALB was downgraded to 'Underweight' from 'Equal-Weight' at Morgan Stanley.

U.S. metals producers rallied in after-hours trading Friday after President Trump said he wants to impose the harshest tariffs on imports of steel and aluminum recommended by the Commerce Department. U.S. Steel (X +1.26%) rose 3%, AK Steel (AKS -2.14%) jumped 3%, Nucor (NUE -0.01%) rose nearly 2%, Steel Dynamics (STLD -1.10%) gained 1%, Century Aluminum (CENX -3.77%) rose 2% and Alcoa (AA -2.73%) gained over 1%.

Empire State Realty (ESRT -0.45%) was downgraded to 'Hold' from 'Buy' at Stifel.

Mack-Cali (CLI +4.35%) was upgraded to 'Hold' from 'Sell' at Stifel.

MARKET COMMENTS

Mar S&P 500 E-mini stock futures (ESH18 +0.39%) this morning are up +10.25 points (+0.37%) at a 3-week high. Friday's closes: S&P 500 +1.60%, Dow Jones +1.39%, Nasdaq +1.99%. The S&P 500 on Friday closed higher on reduced interest rate concerns after the 10-year T-note yield fell below 2.90% to a 4-session low. Stocks were also boosted by increased M&A activity after General Mills agreed to buy Blue Buffalo Pet Products for about $8 billion. There was strength in energy stocks as crude oil prices rose +1.24% to a 2-week high.

Mar 10-year T-note prices (ZNH18 +0.09%) this morning are up +2 ticks at a 1-week high. Friday's closes: TYH8 +10.00, FVH8 +5.25. Mar 10-year T-notes on Friday closed higher on carry-over support from a rally in German bunds to a 3-week high and on dovish comments from Boston Fed President Rosengren who said the Fed is "quite likely" to require large-scale asset purchases again because real rates will remain low due to slow productivity and labor-force growth.

The dollar index (DXY00 +0.16%) this morning is down -0.253 (-0.28%). EUR/USD (^EURUSD) is up +0.0039 (+0.32%) and USD/JPY (^USDJPY) is down -0.11 (-0.10%). Friday's closes: Dollar Index +0.147 (+0.16%), EUR/USD -0.0035 (-0.28%), USD/JPY +0.14 (+0.13%). The dollar index on Friday closed higher on the Fed's semiannual monetary policy report that stated that it sees the labor market "near or a little beyond" full employment, which bolsters the case for tighter Fed policy. There was also weakness in EUR/USD after the German 10-year bund yield fell to a 3-week low, which undercuts the euro's interest rate differentials.

Apr crude oil (CLJ18 -0.24%) this morning is down -14 cents (-0.22%) and Apr gasoline (RBJ18 -0.20%) is down -0.0025(-0.13%). Friday's closes: Apr WTI crude +0.78 (+1.24%), Apr gasoline +0.0289 (+1.47%). Apr crude oil and gasoline on Friday posted 2-week highs and closed higher. Crude oil prices were boosted by carry-over support from Thursday's EIA data that showed an unexpected -1.62 million bbl decline in EIA crude inventories. Crude oil prices were also boosted by comments from Saudi Arabia Energy Minister Khalid Al-Falih who said the global oil market is rebalancing and the decline in oil inventories is expected to continue this year.

Metals prices this morning are higher with Apr gold (GCJ18 +0.76%) +9.5 (+0.71%), Mar silver (SIH18 +0.98%) +0.141 (+0.86%), and Mar copper (HGH18 +0.09%) +0.004 (+0.11%). Friday's closes: Apr gold -2.4 (-0.18%), Mar silver -0.103(-0.62%), Mar copper -0.0290 (-0.89%). Metals on Friday closed lower on a stronger dollar and the rally in stocks that curbed the safe-haven demand for precious metals. Copper prices were undercut by the +29,773 MT increase in weekly Shanghai copper inventories to a 9-3/4 month high of 218,532 MT.