Overnight Markets And News

Sep E-mini S&Ps (ESU18 +0.11%) this morning are up +0.22% and European stocks are up +0.65% as strength in metals prices lifts mining stocks and commodity producers. The markets also have a more optimistic tone with the U.S. and China planning for new trade talks at the end of the month. Sep COMEX copper (HGU18 +1.48%) is up +1.73% on signs of stronger demand after LME cancelled warrants, or orders to withdraw copper from LME warehouses, jumped +11,525 MT to a 1-1/4 month high of 36,050 MT. The Turkish lira is little changed as Turkey is closed for the entire week for holiday. Asian stocks settled mixed: Japan -0.32%, Hong Kong +1.41%, China +1.11%, Taiwan +0.08%, Australia +0.09%, Singapore -0.15%, South Korea +0.01%, India +0.87%. China's Shanghai Composite rebounded from a new 2-1/3 year low and closed higher in the last hour of trade on speculation state-sponsored funds were buying stocks to stabilize the market. The Chinese yuan also climbed to a 1-week high against the dollar after the PBOC raised its daily reference rate for the yuan, which has now gained for three straight sessions against the dollar after it was announced that China was sending a trade delegation to the U.S. later this month.

The dollar index (DXY00 +0.15%) is up +0.17%. EUR/USD (^EURUSD -0.16%) is down -0.17% after the Bundesbank in its monthly report said German Q3 growth "could end up being somewhat slower than the average for the first half of the year." USD/JPY (^USDJPY +0.07%) is up +0.10%.

Sep 10-year T-note prices (ZNU18 +0-045) are up +4 ticks.

The Bundesbank in its monthly report said that German Q3 growth "could end up being somewhat slower than the average for the first half of the year" due to weaker factory orders and as automakers adjust to new emission targets, although private consumption and a strong labor market should keep Germany on a "sound growth path."

German Jul PPI rose +0.2% m/m and +3.0% y/y, right on expectations.

UK Aug Rightmove house prices fell -2.3% m/m and matched the Dec 2017 decline as the biggest drop in prices in 5-1/2 years.

U.S. Stock Preview

Key U.S. news today includes: (1) USDA weekly grain export inspections, (2) Atlanta Fed President Raphael Bostic (voter) discusses the U.S. economic outlook at the Johnson City, Kingsport and Bristol Chamber of Commerce in Kingsport, TN, (3) USDA weekly Crop Progress.

Notable Russell 2000 earnings reports today include: Estee Lauder (consensus $0.56).

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

Equity conferences during the remainder of this week: 10th Annual Next Generation Dx Summit on Mon, EnerCom The Oil & Gas Conference on Mon, American Chemical Society Meeting on Mon, TechNet Augusta 2018 on Mon, BMO Capital Markets Silicon Valley Tech Tour on Tue, Data Integrity Seminar on Wed, Mobile Payments Conference 2018 on Wed-Thu, ACI US Base Oils and Lubricants Summit on Thu, SEB Industrial & Technology Seminar on Thu, UBS Kohler Utility Mini-Conference on Thu, NGAUS Conference on Fri.

Market Comments

Sep S&P 500 E-minis (ESU18 +0.11%) this morning are up +6.25 points (+0.22%). Friday's closes: S&P 500 +0.33%, Dow Jones +0.43%, Nasdaq 100 +0.04%. The S&P 500 on Friday rose to a 1-week high and closed higher on a WSJ report that said Chinese and U.S. negotiators are drawing a road map for talks to end the trade deadlock that will culminate with meetings between U.S. President Trump and Chinese President Xi Jinping at a multilateral summit in Nov. Stocks were also supported by the +0.6% increase in U.S. Jul leading indicators, stronger than expectations of +0.4% and the biggest increase in 5 months. Stocks were undercut by weakness in microchip makers as Nvidia and Applied Materials fell after they both reduced their earnings guidance. Stocks were also undercut by the unexpected -2.6 point decline in the University of Michigan U.S. Aug consumer sentiment to an 11-month low of 95.3, weaker than expectations of +0.1 to 98.0.

Sep 10-year T-notes (ZNU18 +0-045) this morning are up +4 ticks. Friday's closes: TYU8 -0.50, FVU8 -0.50. Sep 10-year T-notes on Friday closed little changed. T-note prices were undercut by reduced safe-haven demand for T-notes after stocks rallied on news of mid-level trade talks between the U.S. and China. T-note prices were also undercut by the larger-than-expected increase in U.S. Jul leading indicators. T-note prices were supported by the unexpected decline in the University of Michigan U.S. Aug consumer sentiment to an 11-month low and by increased safe-haven demand for T-notes from the Turkish financial turmoil after the Turkish lira fell over 3% when U.S. Treasury Secretary Mnuchin said Turkey will face additional sanctions from the U.S. unless it releases American pastor Brunson.

The dollar index (DXY00 +0.15%) this morning is up +0.162 (+0.17%). EUR/USD (^EURUSD -0.16%) is down -0.0019 (-0.17%). USD/JPY (^USDJPY +0.07%) is up +0.11 (+0.10%). Friday's closes: Dollar Index -0.544 (-0.56%), EUR/USD +0.0061 (+0.54%), USD/JPY -0.40 (-0.36%). The dollar index on Friday closed lower on the unexpected drop in the University of Michigan U.S. Aug consumer sentiment to an 11-month low and on the decline in T-note yields, which weakened the dollar's interest rate differentials.

Metals this morning are higher with Dec gold (GCZ18 +0.80%) +10.2 (+0.86%), Sep silver (SIU18 +0.44%) +0.099 (+0.68%) and Sep copper (HGU18 +1.48%) +0.046 (+1.73%). Friday's closes: Dec gold +0.2 (+0.02%), Sep silver -0.082 (-0.56%), Sep copper +0.0125 (+0.48%). Metals on Friday settled mixed. Metals prices were supported by a weaker dollar and by signs of tighter copper supplies after the -16,031 MT decline in Shanghai copper inventories to a 7-1/2 month low of 155,076 MT. Metals prices were undercut by concern that global economic growth will slow and curb demand for industrial metals due to Turkey's financial turmoil and the ongoing China/U.S. trade spat. Gold prices were undercut by continued fund selling as long positions in gold ETFs fell to a 7-1/2 month low.

Sep WTI crude oil (CLU18 -0.05%) this morning is down -24 cents (-0.35%). Sep gasoline (RBU18 unch) is -0.59 (-0.30%). Friday's closes: Sep crude oil +0.45 (+0.69%), Sep gasoline -0.65 (-0.33%). Sep crude oil and gasoline on Friday settled mixed. Crude oil prices were undercut by concern that the financial turmoil in Turkey and the China/U.S. trade tension will slow economic growth and reduce energy demand. Crude oil prices were also undercut by the unexpected drop in the University of Michigan U.S. Aug consumer sentiment to an 11-month low. Crude oil prices found some support on the weaker dollar.

Overnight U.S. Stock Movers

SodaStream International Ltd (SODA +0.84%) jumped 10% in pre-market trading after the company was acquired by PepsiCo in a $3.2 billion deal.

America's Car-Mart (CRMT +21.72%) was upgraded to 'Buy' from 'Neutral' at Janney Montgomery Scott LLC with a price target of $96.

Nike (NKE -0.37%) was upgraded to 'Overweight' from 'Neutral' at Piper Jaffray with a price target of $93.

Cboe (CBOE +0.69%) was upgraded to 'Outperform' from 'Market Perform' at Raymond James with a price target of $115.

Sempra Energy (SRE +0.72%) was upgraded to 'Outperform' from 'Market Perform' at Wells Fargo Securities with a price target of $128.

Constellation Brands (STZ +0.72%) was downgraded to 'Negative' from 'Neutral' at Susquehanna Financial with a price target of $171.

News Corp (NWSA unch) was downgraded to 'Underweight' from 'Equal;-Weight' at Morgan Stanley with a price target of $12.50.

Carbonite (CARB unch) was rated a new 'Buy' at Stifel with a price target of $44.

Turkey's long-term foreign debt rating was downgraded by Moody's Investors Service to Ba3 from Ba2 with its outlook cut to negative from watch negative, and S&P Global Ratings cut Turkey's foreign-currency rating to B+ from BB-.

Westlake Chemical (WLK -1.38%) may initially open higher this morning after it boosted its quarterly dividend to 25 cents per share from 21 cents, higher than consensus of an increase to 22.5 cents a share.

Radius Health (RDUS -6.06%) may initially move lower this morning after holder Farallon Capital Partners LP said it reduced its stake in the company to 4.50% from an 8.99% stake reported Jun 30.

Abeona Therapeutics (ABEO -3.28%) filed to sell as much as $150 million in common stock.