Overnight Markets And News

Sep E-mini S&Ps (ESU18 +0.03%) this morning are up slightly as they climb +0.03% and European stocks are up +0.13%. Stock gains were limited on heightened China/U.S. trade tensions after the U.S. announced it will begin imposing a 25% tariff on an additional $16 billion in Chinese imports in two weeks. Increasing Brexit risks are a negative for European stocks and continues to weaken GBP/USD which fell -0.56% to a new 11-month low on concern that the U.K. won't agree to exit terms with the EU. Asian stocks settled mixed: Japan -0.08%, Hong Kong +0.39%, China -1.27%, Taiwan +0.84%, Australia +0.23%, Singapore -0.40%, South Korea unch, India +0.59%. Chinese stocks moved lower after the U.S. said it will raise tariffs on $16 billion of Chinese goods on Aug 23, even after China Jul trade data showed Chinese exports and imports rose more than expected. Japanese stocks erased an early rally to a 2-week high and closed lower as exporter stocks declined after USD/JPY slid to a 1-week low, which weakens exporters' earnings prospects. India's S&P BSE Sensex Stock Index rose to a new record high as international investors shun Chinese stocks in favor of Indian stocks.

The dollar index (DXY00 +0.04%) is up +0.08%. EUR/USD (^EURUSD -0.02%) is down -0.03%. USD/JPY (^USDJPY -0.28%) is down -0.31% at a 1-week low.

Sep 10-year T-note prices (ZNU18 -0-005) are up +1 tick.

The China Jul trade balance was in surplus by +$28.05 billion, narrower than expectations of +$38.92 billion, Jul exports rise +12.2% y/y, stronger than expectations of +10.0% y/y and the biggest increase in 5-months. Jul imports jumped +27.3% y/y, stronger than expectations of +16.5% y/y and the most in 6-months.

Japan Jul bankruptcies fell -1.68% y/y, the fourth consecutive month that bankruptcies have declined.

The Japan Jul eco watchers survey outlook fell -1.0 to a 16-month low of 49.0, weaker than expectations of -0.1 to 49.9. The Jul eco watchers survey current fell -1.5 to a 22-month low of 46.6, weaker than expectations of -0.1 to 48.0.

U.S. Stock Preview

Key U.S. news today includes: (1) weekly MBA mortgage applications (previous -2.6% to 353.1 with purchase sub-index down -3.1% to 237.9 and refi sub-index down -1.7% to 971.3), (2) Richmond Fed President Tom Barkin (voter) speaks at an event in Roanoke, VA, (3) EIA weekly Petroleum Status Report, (4) Treasury auctions $26 billion of 10-year T-notes.

Notable S&P 500 earnings reports today include: Southern Co (consensus $0.68), Monster Beverage (0.47), CVS Health (1.60), Twenty-Century Fox (0.54), Occidental Petroleum (1.19).

U.S. IPO's scheduled to price today: ElectraMeccanica Vehicles Corp (ECCTF), Amalgamted Bank (ANYB), Vaccinex (VCNX), Mesa Air Group (MESA).

Equity conferences during the remainder of this week: Oppenheimer Technology, Internet & Communications Conference on Tue-Wed, Jefferies Global Industrials Conference on Tue-Thu, J.P. Morgan Auto Conference on Wed-Thu, Canaccord Genuity Growth Conference on Wed-Thu, UBS Genomics Summit on Thu, DA Davidson Technology Conference on Thu, Wells Fargo Securities Technology Services Forum on Thu.

Market Comments

Sep S&P 500 E-minis (ESU18 +0.03%) this morning are up +1.00 point (+0.03%). Tuesday's closes: S&P 500 +0.28%, Dow Jones +0.50%, Nasdaq 100 +0.32%. The S&P 500 on Tuesday rallied to a 6-1/4 month high and closed higher on the unexpected increase in Jun JOLTS job openings report by +3,000 to 6.662 million, stronger than expectations of -13,000 to 6.625 million, and on upbeat S&P 500 company quarterly earnings results as 82% of the 420 S&P 500 companies that have reported quarterly earnings thus far have beaten expectations.

Sep 10-year T-notes (ZNU18 -0-005) this morning are up +1 tick. Tuesday's closes: TYU8 -8.50, FVU8 -5.50. Sep 10-year T-notes on Tuesday closed lower on the stronger-than-expected U.S. Jun JOLTS job openings report and on supply pressures as the Treasury auctions $78 billion of T-notes and T-bonds in this week's quarterly refunding. T-notes were also undercut by reduced safe-haven demand after the rally in the S&P 500 to a 6-1/4 month high.

The dollar index (DXY00 +0.04%) this morning is up +0.077 (+0.08%). EUR/USD (^EURUSD -0.02%) is down -0.0003 (-0.03%). USD/JPY (^USDJPY -0.28%) is down -0.35 (-0.31%) at a 1-week low. Tuesday's closes: Dollar Index -0.141 (-0.15%), EUR/USD +0.0045 (+0.39%), USD/JPY -0.02 (-0.02%). The dollar index on Tuesday closed lower on strength in the yuan versus the dollar after the PBOC reported China Jul foreign exchange reserves rose $5.82 billion to $3.118 trillion, higher than expectations of $3.107 trillion. There was also strength in EUR/USD after German Jun exports and imports were stronger than expected.

Metals this morning are weaker with Dec gold (GCZ18 +0.03%) -0.5 (-0.04%), Sep silver (SIU18 -0.05%) -0.028 (-0.18%) and Sep copper (HGU18 -0.33%) -0.011 (-0.40%). Tuesday's closes: Dec gold +0.6 (+0.05%), Sep silver +0.025 (+0.16%), Sep copper +0.0205 (+0.75%). Metals on Tuesday closed higher on a weaker dollar and on signs of tighter copper supplies after LME copper inventories fell -1,850 MT to a 6-1/2 month low of 248,010 MT. Gold prices were undercut by signs of fund liquidation after long gold positions in ETFs fell to a 6-month low on Monday.

Sep WTI crude oil (CLU18 -0.46%) this morning is down -44 cents (-0.64%). Sep gasoline (RBU18 -0.79%) is -2.08 cents (-0.99%). Tuesday's closes: Sep crude oil +0.16 (+0.23%), Sep gasoline +3.89 (+1.88%). Sep crude oil and gasoline on Tuesday closed higher on a weaker dollar and on the EIA's cut in its U.S. 2018 crude production estimate to 10.68 million bpd from July's estimate of 10.79 million bpd. Crude oil prices were also supported by expectations for Wednesday's weekly EIA crude inventories to fall -3.0 million bbl to a new 3-1/2 year low. 

Overnight U.S. Stock Movers

Disney (DIS +0.53%) slipped 3% in after-hours trading after it reported Q3 adjusted EPS of $1.87, below consensus of $1.94.

Jazz Pharmaceuticals PLC (JAZZ +1.87%) lost nearly 4% in after-hours trading after it forecast full-year adjusted EPS of $12.75 to $13.25, the midpoint below consensus of $13.12.

CF Industries Holdings (CF -0.79%) was upgraded to 'Buy' from 'Hold' at HSBA with a price target of $60.

Papa John's International (PZZA -2.98%) slumped 10% in after-hours trading after it reported Q2 systemwide international comparable sales unexpectedly fell -0.8%, weaker than expectations of a +2.0% increase.

Andersons (ANDE +1.43%) may initially open lower this morning after it reported Q3 revenue of $911.4 million, weaker than consensus of $946.2 million.

Beacon Roofing Supply (BECN +0.93%) tumbled 15% in after-hours trading after it reported Q3 adjusted EPS of $1.18, below consensus of $1.31.

Match Group (@symbolPercentChange(MTCH ))rallied 11% in after-hours trading after it reported Q2 operating income of $150.3 million, better than consensus of $136.4 million.

Fossil Group (FOSL -8.20%) jumped 8% in after-hours trading after it reported Q2 revenue of $576.6 million, stronger than consensus of $562.0 million.

Avis Budget Group (CAR +8.27%) fell almost 8% in after-hours trading after it reported Q2 adjusted EPS of 57 cents, below consensus of 59 cents, and then forecast full-year adjusted EPS of $3.00 to $3.85, the midpoint below consensus of $3.52.

Boot Barn Holdings (BOOT -1.44%) climbed almost 5% in after-hours trading after it reported Q1 adjusted EPS of 24 cents, well above consensus of 12 cents.

Applied Optoelectronics (AAOI -4.49%) surged more than 20% in after-hours trading after it reported Q2 adjusted EPS of 64 cents, stronger than consensus of 44 cents, and then forecast Q3 adjusted EPS of 54 cents to 75 cents, the midpoint above consensus of 64 cents.

Two Harbors Investment (TWO -1.34%) climbed more than 3% in after-hours trading after it reported Q2 core EPS of 53 cents, better than consensus of 47 cents.

Hostess Brands (TWNK -1.20%) dropped 10% in after-hours trading after it reported Q2 revenue of $215.8 million, weaker than consensus of $220.4 million.

3D Systems (DDD +1.65%) surged over 15% in after-hours trading after it reported Q2 revenue of $176.6 million, well above consensus of $166 million.

Progenics (PGNX -0.11%) dropped more than 7% in after-hours trading after it announced that it is offering shares of its common stock in an underwritten public offering pursuant to an effective shelf registration statement.