Overnight Markets And News

Jun E-mini S&Ps (ESM18 +0.18%) this morning are up +0.20% and European stocks are up +0.15% as a rally in energy stocks and automakers leads the overall market higher. Jun WTI crude oil (CLM18 +0.25%) is up +0.30% at a new 3-1/2 year high on global supply concerns after President Trump ordered sanctions on debt owed to Venezuela after President Maduro won re-election in a sham election. Also, European and U.S. automakers all gained on news that China will cut the import duty on passenger cars to 15% from 25%, effective July 1, as it seeks to defuse trade tensions. European stocks also found support on a rally in Italian government bonds that have slumped to multi-year lows over the past week on the political situation in Italy. Asian stocks settled mixed: Japan -0.18%, Hing Kong, and South Korea closed for holiday, China +0.02%, Taiwan -0.25%, Australia -0.70%, Singapore -0.14%, India +0.10%. China's Shanghai Composite erased early losses and eked out a small gain as suppliers of China's ZTE Corp rallied after the WSJ reported that the U.S. and China are said to agree on resolving dispute over the firm.

The dollar index (DXY00 -0.28%) is down -0.30%. EUR/USD (^EURUSD +0.14%) is up +0.17%. USD/JPY (^USDJPY-0.10%) is down -0.06%.

Jun 10-year T-note prices (ZNM18 -0-025) are down -3 ticks.

ECB Governing Council member Liikanen said there is an exceptional degree of uncertainty related to monetary policy transmission and reaching the price stability target depends on loose monetary policy for the time being.

UK May CBI trends survey total manufacturing orders fell -7 to -3, weaker than expectations of -2 to 2 and the lowest in 1-1/2 years. May CBI trends selling prices rose +1 to 19, stronger than expectations of no change at 18.

UK Apr public sector net borrowing rose +6.2 billion pounds, weaker than expectations of +7.1 billion pounds.

U.S. Stock Preview

Key U.S. news today includes: (1) May Richmond Fed manufacturing index (expected +13 to 10, Apr -18 to -3), (2) Treasury auctions $33 billion of 2-year T-notes, (3) USDA Apr Cold Storage.

Notable Russell 1000 earnings reports today include: Toll Brothers (consensus $0.76), AutoZone (12.94), Intl Game Technology (0.27), Advance Auto Parts (1.97), Eaton Vance (0.77), Kohl's (0.50), TJX (1.02), Intuit (4.67), HP Enterprise (0.31), Urban Outfitters (0.31).

U.S. IPO's scheduled to price today: Evo Payments (EVOP).

Equity conferences this week: JP Morgan Energy Bus Tour on Mon-Tue, UBS Global Healthcare and Life Sciences Conference on Mon-Wed, Electrical Products Group Conference on Mon-Wed, Barclays High Yield Bond & Syndicated Loan Conference on Tue, JPMorgan Technology, Media and Telecoms CEO Conference on Tue-Wed, Wolfe Research Global Transportation Conference on Tue-Wed, UBS Global Oil & Gas Conference on Tue-Thu, Berenberg USA Conference on Tue-Thu, Citi Consumer Staples Conference on Wed, Morgan Stanley Chem Tech Day on Wed, Advances in Immuno-Oncology Congress on Thu, Handelsbanken Nordic Mid Small Cap Seminar on Thu, HSBC Luxury Goods Conference on Thu, Jefferies Global Automotive Aftermarket Investor Conference on Thu, Wells Fargo Financial Services Investor Forum on Thu.

Market Comments

June S&P 500 E-minis (ESM18 +0.18%) this morning are up +5.50 points (+0.20%). Monday's closes: S&P 500 +0.74%, Dow Jones +1.21%, Nasdaq +0.57%. The S&P 500 on Monday closed higher on a cooling of U.S-Chinese trade tensions after Treasury Secretary Mnuchin said the U.S. was "putting the trade war with China on hold" amid progress in talks. There was also strength in energy stocks as crude oil prices rose +0.96% to a fresh 3-1/2 year high.

June 10-year T-notes (ZNM18 -0-025) this morning are down -3 ticks. Monday's closes: TYM8 unch, FVM8 -0.50. Jun 10-year T-notes on Monday recovered from early losses and closed little changed. T-note prices were supported by carry-over support from a rally in German bunds to a 1-month high and by dovish comments from Philadelphia Fed President Harker who said he's not seeing a rapid acceleration in inflation and he sees no rush to move interest rates up. T-note prices were undercut by reduced U.S.-Chinese trade war concerns, which fueled a rally in stocks and curbed the safe-haven demand for T-notes. T-notes were also undercut by supply pressures as the Treasury will auction $115 billion of T-notes and floating-rate notes this week.

The dollar index (DXY00 -0.28%) this morning is down -0.28 (-0.30%). EUR/USD (^EURUSD +0.14%) is up +0.0020 (+0.17%). USD/JPY (^USDJPY -0.10%) is down -0.07 (-0.06%). Monday's closes: Dollar Index +0.040 (+0.04%), EUR/USD +0.0019 (+0.16%), USD/JPY +0.27 (+0.24%). The dollar index on Monday rallied to a 5-1/4 month high and closed higher on reduced U.S.-Chinese trade tensions after Secretary Mnuchin said the U.S. was "putting the trade war on hold." USD/JPY rallied to a 4-month high on central bank divergence that undercuts the yen with the Fed in the middle of its rate-hike campaign while the BOJ is still in a QE mode.

Metals prices this morning are higher with Jun gold (GCM18 +0.18%) +2.5 (+019%), Jul silver (SIN18 +0.42%) +0.070 (+0.42%) at a 1-week high, and Jul copper (HGN18 +0.82%) +0.024 (+0.76%) at a 1-week high. Monday's closes: Jun gold -0.40 (-0.03%), Jul silver +0.065 (+0.40%), Jul copper +0.0315 (+1.14%). Metals on Monday settled mixed with Jun gold at a 5-month low. Metals prices were undercut by the rally in the dollar index to a 5-1/4 month high and by the rally in stocks, which curbed safe-haven demand for precious metals. Copper found support on reduced global economic growth concerns as U.S.-Chinese trade tensions eased.

Jun WTI crude oil prices (CLM18 +0.25%) this morning are up +22 cents (+0.30%) at a fresh 3-1/2 year high and Jun gasoline (RBM18 +0.02%) is +0.0028 (+0.12%). Monday's closes: Jun crude +0.96 (+1.35%), Jun gasoline +0.0232 (+1.04%). Jun crude oil and gasoline on Monday closed higher with Jun crude at a 3-1/2 year nearest-futures high. Crude oil prices were supported by concern the U.S. may impose sanctions on Venezuela that will curb its crude exports and cut global supplies after Venezuelan President Maduro won a sham election. Crude oil prices were undercut by the rally in the dollar index to a 5-1/4 month high.

Overnight U.S. Stock Movers

Kohl's (KSS +2.83%) rallied nearly 5% in pre-market trading after it reported Q1 comparable same-store sales rose +3.6%, stronger than consensus of +2.7%, and then forecast full-year adjusted EPS of $5.05 to $5.50, the midpoint above consensus of $5.24.

Macy's (M +1.91%) was upgraded to 'Positive' from 'Neutral' at Susquehanna with a price target of $43.

Ford Motor (F +1.59%) is up 1.6%, General Motors (GM +0.79%) is up nearly 1% and Fiat Chrysler (FCAU +2.20%) gained more than 2% in pre-market trading after China said it cut import tariffs on passenger vehicles to 15% from 25%.

Universal Display (OLED +2.55%) was rated a new 'Buy' at Roth Capital Partners with price target of $136.

Nordson (NDSN +3.45%) dropped nearly 6% in after-hours trading after it forecast Q3 EPS of $1.47 to $1.63, well below consensus of $1.91.

2U Inc (TWOU -0.16%) fell nearly 5% in after-hours trading after it announced that it had commenced a proposed public offering of up to $300 million of its common stock.

Micron Technology (MU +3.91%) rose 4% in after-hours trading after it announced a $10 billion share repurchase authorization.

Pure Storage (PSTG -0.38%) slid more than 7% in after-hours trading despite its forecast for Q2 revenue of $296 million to $304 million, the midpoint right on consensus of $299.2 million.

Sailpoint Technologies Holding (SAIL -0.66%) dropped almost 9% in after-hours trading after a holder filed to sell 15 million shares.

Lamb Weston (LW -0.07%) was rated a new 'Sell' at Vertical Group with a price target of $56.

Hostess Brands (TWNK +1.18%) was rated a new 'Buy' a Vertical Group with a price target of $19.

Melinta Therapeutics (MLNT -3.31%) fell more than 7% in after-hours trading after it announced that it had commenced a proposed public offering of up to $75 million of its common stock.

Libbey (LBY -3.80%) slumped more than 25% in after-hours trading after suspended its dividend in an attempt to cut its debt and invest in strategic initiatives.

Ardelyx (ARDX -2.59%) slid almost 4% in after-hours trading after it announced that it had commenced an underwritten public offering of up to $50 million of its common stock.