Overnight Markets And News

Sep E-mini S&Ps (ESU18 +0.25%) this morning are up +0.24% at a new all-time nearest-futures high and European stocks are up +0.27% at a 2-week high in thin trading with Britain closed for a bank holiday. Positive trade news pushed stocks higher on signs that the U.S. and Mexico were close to a nee Nafta deal after President Trump after President Trump tweeted Saturday that the U.S. could have a "big Trade Agreement" with Mexico soon. European stocks received a boost after German Aug IFO business confidence rose for the first time in nine months to a 6-month high. Asian stocks settled higher: Japan +0.88%, Hong Kong +2.17%, China +1.89%, Taiwan +0.86%, Australia +0.34%, Singapore +0.39%, South Korea +0.44%, India +1.16%. Asian stock markets rallied Monday with China's Shanghai Composite at a 2-week high and Japan's Nikkei Stock Index at a 1-1/4 month high as the yuan stabilized after the PBOC signaled Friday that it was acting to support the currency through its daily fixing. The yuan had tumbled to a 1-1/2 year low against the dollar earlier this month, which had weighed on Chinese stocks on concern the weak yuan would prompt capital outflows out of China. Asian markets also garnered support on Friday's comments from Fed Chair Powell that the Fed would maintain its gradual pace of interest-rate increases.

The dollar index (DXY00 unch) is up +0.07%. EUR/USD (^EURUSD +0.01%) is down -0.03%. USD/JPY (^USDJPY -0.12%) is down -0.13%.

Sep 10-year T-note prices (ZNU18 +0-010) are up +2.5 ticks.

The German Aug IFO business climate rose +2.1 to a 6-month high of 103.8, stronger than expectations of +0.1 to 101.8 and the first increase in 9 months.

China Jul industrial profits rose +16.2% y/y, the smallest increase in 4-months.

U.S. Stock Preview

Key U.S. news today includes: (1) Jul Chicago Fed national activity index (expected +0.02 to 0.45, Jun +0.88 to 0.43), (2) Aug Dallas Fed manufacturing activity (expected -2.3 to 30.0, Jul -4.2 to 32.3), (3) USDA weekly grain export inspections, (4) Treasury auctions $36 billion of 2-year T-notes, (5) USDA weekly Crop Progress.

Notable Russell 2000 earnings reports today include: HEICO Corp (consensus $0.45).

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

Equity conferences during the remainder of this week: 12th annual Women's Leadership Conference on Mon, European Society of Cardiology Meeting on Mon-Tue, OPEX Summer Business Transformation Leaders Summit on Mon-Wed, Seaport Global Securities Energy & Industrials Conference on Tue-Wed, Jefferies Semiconductor/Hardware Summit on Wed, Simmons European Energy Conference on Wed.

Market Comments

Sep S&P 500 E-minis (ESU18 +0.25%) this morning are up +7.00 points (+0.24%) at a new record nearest-futures high. Friday's closes: S&P 500 +0.62%, Dow Jones +0.52%, Nasdaq 100 +0.97%. The S&P 500 on Friday climbed to a new all-time high and closed higher on upbeat comments from Fed Chair Powell who said he sees "good reason to expect the strong economy to continue and gradual rate hikes are likely appropriate." There was also strength in energy stocks as crude oil price jumped +1.31% to a 2-week high.

Sep 10-year T-notes (ZNU18 +0-010) this morning are up +2.5 ticks. Friday's closes: TYU8 -2.50, FVU8 -1.75. Sep 10-year T-notes on Friday closed slightly lower on the the rally in S&P 500 to a new record high, which curbed the safe-haven demand for T-notes, and also on increased inflation expectations after the 10-year T-note breakeven inflation rate rose to a 1-1/2 week high. A supportive factor was Fed Chair Powell's comment that he sees no clear sign that inflation is accelerating above the Fed's 2% target and that a gradual pace of Fed rate hikes is still appropriate.

The dollar index (DXY00 unch) this morning is up +0.071 (+0.07%). EUR/USD (^EURUSD +0.01%) is down -0.0004 (-0.03%). USD/JPY (^USDJPY -0.12%) is down -0.15 (-0.13%). Friday's closes: Dollar Index -0.520 (-0.54%), EUR/USD +0.0082 (+0.71%), USD/JPY -0.05 (-0.04%). The dollar index on Friday closed lower on comments from Fed Chair Powell that a gradual pace of tightening is appropriate and that there are no clear signs that inflation is accelerating above the Fed's 2% target. The dollar was also undercut by strength in the yuan which climbed to a 2-week high against the dollar on signs the PBOC is supporting the yuan when it said that banks have resumed a "counter-cyclical" factor in the fixing of the yuan to counter the bias toward devaluation.

Metals this morning are weaker with Dec gold (GCZ18 -0.21%) -3.1 (-0.26%), Sep silver (SIU18 -0.30%) -0.054 (-0.37%) and Sep copper (HGU18 +0.09%) -0.001 (-0.04%). Friday's closes: Dec gold +19.3 (+1.62%), Sep silver +0.252 (+1.73%), Sep copper +0.0360 (+1.73%). Metals on Friday closed higher with Dec gold and Sep copper at 1-1/2 week highs. Metals prices were supported by a weaker dollar and dovish comments by Fed Chair Powell who said that gradual rate hikes are appropriate. Copper was supported by news that weekly Shanghai copper inventories fell by -8,486 MT to an 8-month low of 146,590.

Oct WTI crude oil (CLV18 -0.26%) this morning is down -31 cents (-0.45%). Oct gasoline (RBV18 -0.01%) is -0.40 (-0.20%). Friday's closes: Oct crude oil +0.89 (+1.31%), Oct gasoline +2.02 (+1.03%). Oct crude oil and gasoline on Friday rallied to 2-week highs and closed higher on a weaker dollar and on concern about tighter global crude supplies after workers at Total's oil platforms in the North Sea said strikes will proceed after labor talks broke down. Crude oil prices were also supported by the rally in the S&P 500 to a record high, which shows confidence in the economic outlook that may lead to stronger energy demand.

Overnight U.S. Stock Movers

Sonos (SONO -2.98%) was rated a new 'Outperform' at RBC Capital Markets with a price target of $25.

Pfizer (PFE +0.47%) was downgraded to 'Sell' from 'Buy' at Jyske Bank with a price target of $39.

Cushman & Wakefield (CWK +0.57%) was rated a new 'Buy' at Goldman Sachs with a price target of $20.

Hibbett Sports (HIBB -30.20%) was downgraded to 'Hold' from 'Buy' at Canaccord Genuity with a price target of $21.

Chipotle Mexican Grill (CMG +0.52%) was downgraded to 'Underperform' from 'Neutral' at Wedbush with a price target of $445.

American Eagle Outfitters (AEO -1.11%) was downgraded to 'Neutral' from 'Outperform' with a price target of $29.

CIT Group (CIT -0.05%) was downgraded to 'Equal-Weight' from 'Overweight' at Stephens with a price target of $60.

Tesla (TSLA +0.85%) fell 3% in pre-market trading after CEO Musk said he believes the "better path is for Tesla to remain public."

Rigel Pharmaceuticals (RIGL +0.36%) was rated a new 'Buy' at Citibank with a price target of $8.50.

PG&E (PCG -2.62%) gained nearly 1% in after-hours trading after California lawmakers proposed measures to help PG&E and other utilities to deal with liabilities from wildfires including allowing utilities to finance fire costs with bonds.