Overnight Markets And News

Jun E-mini S&Ps (ESM18 -0.32%) this morning are down -0.34% and European stocks are down -0.58% as Jun WTI crude oil (CLM18 -1.23%) falls -1.34% before President Trump's decision on the Iran nuclear deal. President Trump said he will announce his decision at 1400 EST today on whether the U.S. will reimpose sanctions on Iran, which would curb crude exports from OPEC's third-largest member. European stocks also fell, and EUR/USD is down -0.41% at a 4-1/4 month low on heightened Italian political risks after Italy's ant-establishment Five Star Party and the League rejected the idea of a non-partisan prime minister and called for new elections in July. Asian stocks settled mostly higher: Japan +0.18%, Hong Kong +1.36%, China +0.79%, Taiwan +0.82%, Australia +0.12%, Singapore +0.29%, South Korea -0.28%, India +0.02%. China's Shanghai Composite rose to a 3-week high after China Apr imports rose more than expected, a sign of stronger domestic consumption. Also, China said Liu He, President Jinping's top economic adviser, will visit Washington next week for follow-up trade talks with U.S. Treasury Secretary Mnuchin.

The dollar index (DXY00 +0.39%) is up +0.33%% at a new 4-1/4 month high after Fed Chair Powell said the market "is reasonably aligned" with Fed rate hike expectations. EUR/USD (^EURUSD -0.47%) is down -0.41% at a 4-1/4 month low on Italian political risks. USD/JPY (^USDJPY -0.09%) is down -0.10%.

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

Fed Chair Powell, speaking at a conference in Switzerland, said "Fed policy normalization has proceeded without disruption to financial markets, and market participants' expectations for policy seen reasonably well aligned with policymakers' expectations."

German Mar industrial production rose +1.0% m/m, stronger than expectations of +0.8% m/m.

The German Mar trade balance was in surplus by +25.2 billion euros, wider than expectations of +22.5 billion euros and the largest surplus in 2-years. Mar exports rose +1.7% m/m, weaker than expectations of +1.8% m/m. Mar imports unexpectedly fell -0.9% m/m, weaker than expectations of +1.0% m/m.

The German Mar current account balance was in surplus by +29.1 billion euros, wider than expectations of +27.0 billion euros and the biggest surplus in a year.

The China Apr trade balance was in surplus by +$28.78 billion, wider than expectations of +$27.75 billion. Apr exports rose +12.9% y/y, stronger than expectations of +8.0% y/y. Apr imports rose +21.5% y/y, stronger than expectations of +16.0% y/y.

U.S. Stock Preview

Key U.S. news today includes: (1) Fed Chair Jerome Powell speaks on the topic of ‘Monetary Policy Influences on Global Financial Conditions and International Capital Flows’ on a panel at a Swiss National Bank and IMF conference in Zurich, (2) Mar JOLTS job openings (expected +48,000 to 6.100 million, Feb -176,000 to 6.052 million), (3) Treasury auctions $31 billion of 3-year T-notes.

Notable S&P 500 earnings reports today include: Walt Disney (consensus $1.70), Marriott (1.23), Martin Marietta (0.24), DISH Network (0.70), Discovery (0.40), TripAdvisor (0.16), Electronic Arts (1.16), Occidental Petroleum (0.71).

U.S. IPO's scheduled to price today: Evelo Biosciences (EVLO), Origin Bancorp (OBNK).

Equity conferences this week: Morgan Stanley E&P and Oil Services Conference on Mon-Tue, Goldman Sachs Global Staples Forum on Tue, J.P. Morgan Spring Biotech Conference on Tue, Deutsche Bank Health Care Conference on Tue-Wed, Oppenheimer Industrial Growth Conference on Tue-Wed, Wells Fargo Industrials Conference on Tue-Wed, Jefferies Global Technology Conference on Wed-Thu, Goldman Sachs Leveraged Finance Conference on Thu, Macquarie Business Services C-Suite Conference on Thu, UBS Utility & MLP Conference on Thu.

Market Comments

June S&P 500 E-minis (ESM18 -0.32%) this morning are down -9.00 points (-0.34%). Monday's closes: S&P 500 +0.35%, Dow Jones +0.39%, Nasdaq +0.78%. The S&P 500 on Monday closed higher on increased M&A activity after Blackstone Group agreed to purchase Gramercy Property Trust for $7.6 billion and Elliot Management offered to buy Athenahealth for $6.5 billion. There was also strength in technology stocks after Apple gained for the sixth consecutive session to a new record high. Energy stocks gained support as crude oil rose +1.45% to a 3-1/2 year high.

June 10-year T-notes (ZNM18 -0-005) this morning are down -0.5 of a tick. Monday's closes: TYM8 -0.50, FVM8 -0.25. Jun 10-year T-notes on Monday closed lower on the rally in crude oil to a 3-1/2 year high, which lifted the 10-year breakeven inflation expectations rate to a 3-session high. T-notes were also undercut by the stronger stock market.

The dollar index (DXY00 +0.39%) this morning is up +0.309 (+0.33%) at a fresh 4-1/4 month high. EUR/USD (^EURUSD -0.47%) is down -0.0049 (-0.41%) at a 4-1/4 month low. USD/JPY (^USDJPY -0.09%) is down -0.11 (-0.10%). Monday's closes: Dollar Index +0.152 (+0.16%), EUR/USD -0.0038 (-0.32%), USD/JPY -0.03 (-0.03%). The dollar index on Monday climbed to a new 4-1/4 month high and closed higher on the rise in T-note yields, which boosted the dollar's interest rate differentials. There was also weakness in EUR/USD which fell to a 4-1/4 month low after the Eurozone May Sentix investor confidence unexpectedly fell -0.4 to a 15-month low of 19.2 and after German Mar factory orders unexpectedly fell -0.9%, weaker than expectations of +0.5%.

Metals prices this morning are weaker with Jun gold (GCM18 -0.30%) -4.2 (-0.32%), Jul silver (SIN18 -0.21%) -0.040 (-0.24%), and Jul copper (HGN18 -1.48%) -0.040 (-1.28%). Monday's closes: Jun gold -0.60 (-0.05%), Jul silver -0.024 (-0.15%), Jul copper -0.0065 (-0.21%). Metals on Monday closed lower on the rally in the dollar index to a 4-1/4 month high and on the rally in stocks, which curbs the safe-haven demand for precious metals.

Jun WTI crude oil prices (CLM18 -1.23%) this morning are down -95 cents (-1.34%) and Jun gasoline (RBM18 -0.88%) is -0.0196 (-0.92%). Monday's closes: Jun crude +1.01 (+1.45%), Jun gasoline +0.0200 (+0.95%). Jun crude oil and gasoline on Monday closed higher with Jun crude at a new 3-1/2 year nearest-futures high. Crude oil prices were boosted by concern that President Trump on Tuesday will exit from the Iran nuclear deal and reimpose sanctions on Iran, which would curb their crude exports and tighten global oil supplies. Crude oil was also boosted by comments from Saudi Arabian Energy Minister Khalid Al-Falih who said, "OPEC has yet to accomplish its goal of stabilizing crude markets," which signals he favors extending OPEC crude production cuts. Crude oil prices were undercut by the rally the dollar index to a 4-1/4 month high.

Overnight U.S. Stock Movers

Nevro (NVRO -0.26%) tumbled over 13% in after-hours trading after it reported a Q1 loss of -59 cents per share, much wider than consensus of -28 cents.

Weight Watchers International (WTW +0.24%) slid 3% in after-hours trading after holder Artal Luxembourg offered 6.5 million shares of the stock.

Kaman (KAMN +1.26%) rose 3% in after-hours trading after it reported Q1 adjusted EPS of 55 cents, above consensus of 46 cents.

Zillow Group (ZG +4.91%) dropped 8% in after-hours trading after it forecast Q2 revenue of $322 million to $327 million, weaker than consensus of $342 million.

Manitowoc (MTW +2.97%) climbed over 4% in after-hours trading after it reported Q1 net sales of $386.1 million, higher than consensus of $373.2 million, and forecast full-year adjusted Ebitda of 100 million to $105.3 million, the midpoint above consensus of $105.3 million.

Envision Healthcare (EVHC -1.07%) rose 3% in after-hours trading after it reported Q1 adjusted EPS of 71 cents, above consensus of 64 cents, and forecast full-year adjusted EPS of $3.49 to $3.70, the midpoint above consensus of $3.59.

Fabrinet (FB +0.77%) jumped 11% in after-hours trading after it reported Q3 revenue of $332.2 million, higher than consensus of $319.3 million, and then forecast Q4 revenue of $334 million to $342 million, better than consensus of $332.8 million.

Hertz Global Holdings (HTZ +3.70%) fell more than 7% in after-hours trading after it reported a Q1 adjusted loss per share of -$1.58, wider than consensus of -$1.28.

Fiesta Restaurant Group (FRGI +1.39%) rose more than 2% in after-hours trading after it reported Q1 adjusted EPS of 16 cents, above consensus of 14 cents.

MacroGenics (MGNX +1.21%) lost 2% in after-hours trading after it reported Q1 revenue of $4.70 million, weaker than consensus of $6.79 million.

AMC Entertainment Holdings (AMC +5.52%) climbed nearly 6% in after-hours trading after it reported Q1 revenue of $1.38 billion, better than consensus of $1.35 billion.

Veeco Instruments (VECO +0.29%) jumped 10% in after-hours trading after it reported Q1 net sales of $158.6 million, better than consensus of $151.3 million.

Nautilus (NLS +2.31%) rose 4% in after-hours trading after it reported Q1 EPS of 26 cents, higher than consensus of 21 cents.