Overnight Markets And News

Sep E-mini S&Ps (ESU18 -0.13%) this morning are down -0.13% as markets await the next move in the China/U.S. trade war. Also, the markets await this morning's U.S. Aug non-farm payrolls, which is seen as strong enough to cement the case for a Fed rate hike later this month. European stocks are down -0.36% at a 5-1/4 month low after data from Germany, Europe's largest economy, shows signs of a slowdown after German Jul industrial production unexpected declined and German Jul exports unexpectedly fell by the most in 5-months. Also weighing on the European market is a slide in bank stocks, led by a -3.5% drop in ING Groep NV, after the newspaper Het Financieele Dagblad reported the bank signaled to its managers its license to operate could be threatened because of information technology and working system problems. Asian stocks settled mostly lower: Japan -0.80%, Hong Kong -0.01%, China +0.40%, Taiwan -0.71%, Australia -0.27%, Singapore -0.42%, South Korea -0.48%, India +0.38%. Japan's Nikkei Stock Index fell to a 2-week low on trade concerns along with weakness in exporters after USD/JPY fell to a 2-week low. Chinese stocks ended slightly higher after some top American technology companies and retailers urged the Trump administration not to impose additional tariffs on Chinese goods. A public-consultation period ended Thursday night in the U.S., and the markets look to see if President Trump proceeds with imposing tariffs on another $200 billion of Chinese imports.

The dollar index (DXY00 +0.02%) is down -0.10%. EUR/USD (^EURUSD -0.13%) is down -0.03%. USD/JPY (^USDJPY+0.11%) is up +0.07%.

Dec 10-year T-note prices (ZNZ18 -0-005) are down -1.5 ticks.

German Jul industrial production unexpectedly fell -1.1% m/m, weaker than expectations of +0.2% m/m.

The German Jul trade balance shrank to a surplus of +16.5 billion euros, narrower than expectations of +19.5 billion euros and the smallest surplus in 1-1/2 years. Jul exports unexpectedly fell -0.9% m/m, weaker than expectations of +0.3% m/m and the biggest decline in 5-months. Jul imports rose +2.8% m/m, stronger than expectations of +0.1% m/m and the largest increase in 2-3/4 years.

Japan Jul labor cash earnings rose +1.5% y/y, weaker than expectations of +2.4% y/y. Jul real cash earnings rose +0.4% y/y, weaker than expectations of +1.1% y/y.

U.S. Stock Preview

Key U.S. news today includes: (1) Aug non-farm payrolls (expected +195,000, Jul +157,000) and Aug unemployment rate (expected -0.1 to 3.8%, Jul -0.1 to 3.9%), (2) Aug avg hourly earnings (expected +0.2% m/m and +2.7% y/y, Jul +0.3% m/m and +2.7% y/y), (3) Boston Fed President Eric Rosengren (non-voter) gives opening remarks at a conference on the consequences of long spells of low interest rates, (4) Cleveland Fed President Loretta Mester (voter) moderates a panel titled a “Reality Check from the Markets” at a Boston Fed conference, (5) Dallas Fed President Robert Kaplan takes part in a Q&A discussion during a Dallas Fed and Kansas City Fed conference on energy and the economy.

Notable Russell 2000 earnings reports today include: none.

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

Equity conferences during the remainder of this week: Citi Global Technology Conference on Wed-Fri, Citi Biotech Conference on Thu, Bank of America Merrill Lynch Media, Communications & Entertainment Conference on Thu-Fri, Good Food Conference on Thu-Fri.

Market Comments

Sep S&P 500 E-minis (ESU18 -0.13%) this morning are down -3.75 points (-0.13%). Thursday's closes: S&P 500 -0.37%, Dow Jones +0.08%, Nasdaq 100 -0.93%. The S&P 500 on Thursday fell to a 1-1/2 week low and closed lower on concern that the new round of U.S. tariffs on another $200 billion of Chinese products may come as early as Friday. Stocks were also undercut by the weaker-than-expected U.S. Aug ADP employment report of +163,000 (vs expectations of +200,000) and July factory orders report of -0.8% (vs expectations of -0.6%0. There was also weakness in the technology sector as semiconductor stocks sold off after KLA-Tencor softened its demand outlook for the rest of the year. Stocks found some underlying support on the U.S. weekly initial unemployment claims report of -10,000 to a 49-year low of 203,000.

Dec 10-year T-notes (ZNZ18 -0-005) this morning are down -1.5 ticks. Thursday's closes: TYZ8 +7.0, FVZ8 +3.75. Dec 10-year T-notes on Thursday closed higher on safe-haven demand with the decline in the S&P 500 to a 1-1/2 week low. T-notes were also supported by the decline in inflation expectations after the 10-year T-note breakeven inflation rate fell to a 2-week low.

The dollar index (DXY00 +0.02%) this morning is down -0.094 (-0.10%), EUR/USD (^EURUSD -0.13%) -0.0004 (-0.03%), and USD/JPY (^USDJPY +0.11%)is up +0.08 (+0.07%). Thursday's closes: Dollar Index -0.163 (-0.17%), EUR/USD -0.0007 (-0.06%), USD/JPY -0.78 (-0.70%). The dollar index on Thursday closed lower on weakness in USD/JPY which fell to a 2-week low as a sell-off in stocks boosted the safe-haven demand for the yen. The dollar was also undercut by the decline in T-note yields, which weakened the dollar's interest rate differentials.

Metals prices this morning are mixed with Dec gold (GCZ18 +0.22%) +3.2 (+0.27%), Dec silver (SIZ18 +0.17%) +0.049 (+0.35%) and Dec copper (HGZ18 -0.27%) -0.004 (-0.15%). Thursday's closes: Dec gold +3.0 (+0.25%), Dec silver -0.039 (-0.27%), Dec copper +2.65 (+1.02%). Metals on Thursday settled mostly higher on the fall in the S&P 500 to a 1-1/2 week low, which boosted the safe-haven demand for precious metals. Copper prices were also supported by signs of tighter copper supplies after LME copper inventories fell -7,750 MT to a 3-week low of 254,350 MT.

Oct WTI crude oil prices (CLV18 +0.21%) this morning are up +17 cents (+0.25%) and Oct gasoline (RBV18 +0.55%) is +0.98 (+0.50%). Thursday's closes: Oct crude oil -0.95 (-1.38%), Oct gasoline -1.38 (-0.70%). Oct crude oil and gasoline on Thursday sold off to 2-week lows and closed lower on the bearish EIA report, which showed a +549,000 bbl increase in crude supplies at Cushing to a 1-1/2 month high, a +1.8 million bbl increase in EIA gasoline supplies (more than expectations of -1.5 million bbl) and the +3.1 million bbl increase in EIA distillate stockpiles to a 5-1/4 month high (more than expectations of +750,000 bbl). A bullish element of the EIA report was that crude oil inventories fell -4.3 million bbl to a 3-1/2 year low, a bigger decline than expectations of -3.0 million bbl.

Overnight U.S. Stock Movers

Reliance Steel & Aluminum (RS +0.25%) was downgraded to 'Underperform' from 'Buy' at Bank of America/Merrill Lynch.

Broadcom (AVGO -2.46%) rose more than 3% in after-hours trading after it reported Q3 adjusted EPS from continuing operations of $4.98, stronger than expectations of $4.83.

Pal Alto Networks (PANW -0.84%) climbed nearly 6% in after-hours trading after it reported Q4 revenue of $658.1 million, well above consensus of $633.1 million, and then forecast Q1 revenue of $625 million to $635 million, higher than consensus of $619.2 million.

Five Below (FIVE +0.65%) jumped almost 8% in after-hours trading after it reported Q2 EPS of 45 cents, higher than consensus of 38 cents, and then raised guidance on full-year EPS to $2.51 to $2.57 from a prior view of $2.36 to $2.42, stronger than consensus of $2.48.

Tilray (TLRY -10.86%) fell more than 4% in after-hours trading on top of the 11% it lost during Thursday's session when it was downgraded to 'Market Perform' from 'Outperform' at Northland Securities.

Okta (OKTA +0.53%) rallied nearly 16% in after-hours trading after it reported Q2 revenue of $94.6 million, better than consensus of $85.0 million, and then forecast full-year revenue of $372 million to $375 million, well above consensus of $357.3 million.

MCBC Holdings (MCFT +5.92%) rose 4% in after-hours trading after it reported Q4 adjusted Ebitda of $19.8 million, higher than consensus of $15.8 million.

At Home Group (HOME -4.39%) lost 2% in after-hours trading after it announced the launch of a proposed underwritten secondary public offering of 10 million shares of its common stock by certain stockholders.

Finisar (FNSR -2.09%) rallied 6% in after-hours trading after it reported Q1 adjusted EPS of 18 cents, higher than consensus of 12 cents, and then forecast Q2 adjusted EPS of 19 cents to 25 cents, the midpoint above consensus of 19 cents.

GameStop (GME -0.74%) fell 4% in after-hours trading after it reported Q2 adjusted EPS of 5 cents, below consensus of 8 cents.

Domo (DOMO +3.87%) gained more than 2% in after-hours trading after it reported Q2 revenue of $34.3 million, higher than consensus of $32.0 million.

eGain (EGAN -2.49%) slumped 22% in after-hours trading after it reported Q4 revenue of $15.6 million, weaker than consensus of $15.8 million and the company's first miss in five quarters.

Menlo Therapeutics (MNLO +0.39%) climbed over 3% in after-hours trading after it was rated a new 'Overweight' at Cantor Fitzgerald with a price target of $25.