Overnight Markets and News

Jun E-mini S&Ps this morning are down -0.23% ahead of the monthly U.S. payrolls report later this morning. Stocks are also under pressure as the China-U.S. trade talks ended after two days without key differenced being resolved. China's Xinhua News Agency reported major disagreements on some trade matters remain and both sides will continue communicating to work toward making more progress. They also said that both sides reached a consensus on some trade issues, without providing details. European stocks are up +0.13% on upbeat comments from ECB Vice President Constancio who said, "the ongoing robust recovery the Eurozone is experiencing is a source of optimism for the immediate future." Gains were limited after the Apr Markit composite PMI was revised lower to a 15-month low of 55.1 and after Eurozone Mar retail sales rose less than expected. Asian stocks settled mostly lower: Japan closed for holiday, Hong Kong -1.28%, China -0.32%, Taiwan +0.14%, Australia -0.58%, Singapore -0.85%, South Korea -1.19%, India -0.53%.

The dollar index is up +0.12%. EUR/USD is down -0.17%. USD/JPY is down -0.185.

Jun 10-year T-note prices are up +3 ticks.

ECB Vice President Constancio said "the ongoing robust recovery the Eurozone is experiencing is a source of optimism for the immediate future. The Eurozone is much more resilient to possible external financial shocks."

The Eurozone Apr Markit composite PMI was revised lower to a 15-month low of 55.1 from the originally reported 55.2.

Eurozone Mar retail sales rose +0.1% m/m and +0.8% y/y, weaker than consensus of +0.5% m/m and +1.9% y/y.

The China Apr Caixin services PMI rose +0.6 to 52.9, stronger than expectations of no change at 52.3.

U.S. Stock Preview

Key U.S. news today includes: (1) Apr non-farm payrolls (expected +193,000, Mar +103,000) and Apr unemployment rate (expected -0.1 to 4.0%, Mar unch at 4.1%), (2) Apr avg hourly earnings (expected +0.2% m/m and +2.7% y/y, Mar +0.3% m/m and +2.7% y/y), (3) New York Fed President William Dudley (voter) speaks in a press interview about the financial tumult of our times and the challenges ahead, (4) San Francisco Fed President John Williams (voter) in the luncheon speaker at a Hover Institute policy conference on “Currencies, Capital and Central Bank Balances," (5) Fed Vice Chairman Randal Quarles speaks on liquidity regulation and the size of the Fed’s balance sheet at a Hoover Institution monetary policy conference, (6) Dallas Fed President Robert Kaplan (non-voter) speaks at a conference on currencies and capital and central bank balances.

Notable S&P 500 earnings reports today include: Berkshire Hathaway (consensus $3,055), Aon (2.81), BASF (1.97), Sempra Energy (1.67), Tyson Foods (1.31), Cognizant Technology (1.06), HSBC (0.21), Newell Brands (0.26).

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

Equity conferences this week: none.

Market Comments

June S&P 500 E-minis (ESM18 -0.24%) this morning are down -6.00 points (-0.23%). Thursday's closes: S&P 500 -0.23%, Dow Jones +0.02%, Nasdaq -0.02%. The S&P 500 on Thursday sold off to a 4-week low and closed lower on the -2.0 point decline in the U.S. Apr ISM non-manufacturing PMI to 56.8 (weaker than expectations of -0.8 to 58.0) and on doubts that U.S.-Chinese trade talks on Thursday/Friday will produce any breakthroughs. Stocks founds support on the +2,000 increase in U.S. weekly jobless claims (less than expectations of +16,000) and the +1.6% increase in U.S. Mar factory orders (stronger than expectations of +1.4%).

June 10-year T-notes (ZNM18 +0-025) this morning are up +3 ticks. Thursday's closes: TYM8 +5.00, FVM8 +3.00. Jun 10-year T-notes rose to a 2-week high Thursday and closed higher on the weaker-than-expected U.S. Apr ISM non-manufacturing report and on reduced inflation expectations after the 10-year T-note breakeven inflation rate fell to a 2-week low.

The dollar index (DXY00 +0.15%) this morning is up +0.111 (+0.12%). EUR/USD (^EURUSD -0.22%) is down -0.0020 (-0.17%). USD/JPY (^USDJPY -0.19%) is down -0.20 (-0.18%). Thursday's closes: Dollar Index -0.098 (-0.11%), EUR/USD +0.0037 (+0.31%), USD/JPY -0.65 (-0.59%). The dollar index on Thursday closed lower on the early slide in the S&P 500 to a 4-week low, which pushed USD/JPY down to a 1-week low on increased safe-haven demand for the yen. The dollar was also undercut by the decline in the 10-year T-note yield to a 2-week low, which undercut the dollar's interest rate differentials.

Metals prices this morning are lower with Jun gold (GCM18 -0.15%) -1.5 (-0.11%), Jul silver (SIN18 -0.10%) -0.017 (-0.10%), and Jul copper (HGN18 -0.31%) -0.004 (-0.11%). Thursday's closes: Jun gold +7.10 (+0.54%), Jul silver +0.072 (+0.44%), Jul copper +0.0120 (+0.39%). Metals on Thursday closed higher on a weaker dollar and on signs of tighter copper supplies after LME copper inventories fell -7,825 MT to a 1-3/4 month low of 316,400 MT.

Jun WTI crude oil prices (CLM18 +0.42%) this morning are up +34 cents (+0.50%) and Jun gasoline (RBM18 +0.42%) is +0.0112 (+0.54%). Thursday's closes: Jun crude +0.50 (+0.74%), Jun gasoline +0.0077 (+0.37%). Jun crude oil and gasoline on Thursday closed higher on a weaker dollar and on the comments from Iranian Foreign Minister Mohammad Javad Zarif who accused the U.S. of "bullying" and said his country won't renegotiate the 2015 nuclear accord, which raises the risk of a re-imposition of sanctions on Iran that curbs its crude exports. Crude oil prices were undercut by the decline in the crack spread to a 2-week low, which reduces incentive for refiners to purchase crude oil to refine into gasoline.

Overnight U.S. Stock Movers

Arista Networks (ANET +0.90%) dropped nearly 9% in after-hours trading after it said it expects Q2 adjusted gross margin to by 62%-64%, weaker than consensus of 64.4%.

Palo Alto Networks (PANW -1.66%) was rated a new 'Outperform' at New Street Research with a price target of $235.

Universal Display (OLED -0.98%) slid 3% in after-hours trading after it forecast full-year revenue of $280 million to $310 million, well below consensus of $358.7 million.

Weight Watchers International (WTW -4.15%) rose 6% in after-hours trading after it forecast full-year EPS of $300 to $3.20, much higher than consensus of $2.57.

Intel (INTC -0.06%) was rated a new 'Outperform' at New Street Research with a price target of $70.

Fluor (FLR +0.43%) tumbled nearly 10% in after-hours trading after it slashed its 2018 EPS estimate to $2.10 to $2.50 from a Feb 20 estimate of $3.10 to $3.50.

California Resources (CRC -1.64%) climbed more than 6% in after-hours trading after it reported an unexpected profit of 18 cents EPS, much better than an expected loss of -77 cents a share.

Parsley Energy (PE -2.82%) rose 4% in after-hours trading after it reported Q1 adjusted EPS of 31 cents, higher than consensus of 24 cents.

Teradata (TDC -1.98%) lost 2% in after-hours trading after it forecast Q1 adjusted EPS of 17 cents to 19 cents, weaker than consensus of 32 cents.

Control4 Corp (CTRL -1.32%) jumped 7% in after-hours trading after it reported Q1 adjusted EPS of 21 cents, well above consensus of 14 cents.

Shake Shack (SHAK +0.25%) climbed 7% in after-hours trading after it reported Q1 comparable sales unexpectedly rose +1.7%, better than consensus of a -0.4% decline.

Chemours (CC +0.08%) rallied 8% in after-hours trading after it reported Q1 adjusted EPS of $1.41, well above consensus of $1.21.

Super Micro Computer (SMCI +0.56%) climbed 8% in after-hours trading after it forecast Q4 sales of $800 million to $860 million, better than consensus of $797.8 million.

Commercial Vehicle Group (CVGI -1.16%) rallied 16% in after-hours trading after it reported Q1 revenue jumped +24% y/y to $215.7 million.

Pandora Media (P +2.13%) jumped almost 8% in after-hours trading after it reported Q1 revenue of $319.2 million, above consensus of $304.3 million.