Overnight Markets And News

Sep E-mini S&Ps (ESU18 +0.34%) this morning are up +0.37% at a 2-week high and European stocks are up +0.32% at a 3-week high. A slide in the dollar index to a 3-week low is giving a boost to mining stocks and metals producers, and European stocks received support from stronger-than-expected German May trade data and an unexpected increase in the Eurozone Jul Sentix investor confidence. Asian stocks settled higher: Japan +1.21%, Hong Kong +1.32%, China +2.47%, Taiwan +1.05%, Australia +0.22%, Singapore +1.16%, South Korea +0.71%, India +0.78%. Chinese stocks rallied as the yuan rebounded against the dollar after China's Finance Ministry said China would continue to deepen reform, open up its markets and create a "favorable business environment for companies from all over the world operating in China." Japanese stocks rallied, led by strength in electronics and telecommunications companies.

The dollar index (DXY00 -0.27%) is down -0.16% at a fresh 3-week low. EUR/USD (^EURUSD +0.32%) is up +0.26% at a 3-week high after ECB Executive Board member Coeure said there's currently "no reason to change policy expectations" due to trade tensions as "the backdrop is for very strong, resilient growth in the Eurozone." USD/JPY (^USDJPY -0.02%) is down -0.03%.

Sep 10-year T-note prices (ZNU18 -0-050) are down -5 ticks.

The Eurozone Jul Sentix investor confidence unexpectedly rose +2.8 to 12.1, stronger than expectations of -0.3 to 9.0.

ECB Executive Board member Coeure said the impact on business confidence due to trade tension risks has so far been "limited" and there's currently "no reason to change policy expectations" as "the backdrop is for very strong, resilient growth in the Eurozone."

The German May trade balance narrowed to a surplus of +19.7 billion euros, smaller than expectations of +20.2 billion euros. May exports rose +1.8% m/m, stronger than expectations of +0.7% m/m. May imports unexpectedly rose +0.7% m/m, stronger than expectations of -0.5% m/m.

The Japan Jun eco watchers survey outlook rose +0.8 to 50.0, weaker than expectations of +0.9 to 50.1. The Jun eco watchers survey current rose +1.0 to 48.1, right on expectations.

U.S. Stock Preview

Key U.S. news today includes: (1) USDA weekly grain export inspections, (2) May consumer credit (expected +$12.0 billion, Apr +$9.262 billion), (3) USDA weekly Crop Progress.

Notable Russell 1000 earnings reports today include: none.

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

Equity conferences this week: SEMICON West Conference on Tue, CJS Securities Summer Conference on Tue.

Market Comments

Sep S&P 500 E-minis (ESU18 +0.34%) this morning are up +10.25 points (+0.37%) at a 2-week high. Friday's closes: S&P 500 +0.85%, Dow Jones +0.41%, Nasdaq 100 +1.50%. The S&P 500 on Friday rallied to a 2-week high and closed higher on the +213,000 increase in U.S. Jun non-farm payrolls (stronger than expectations of +195,000) and the narrower-than-expected U.S. May trade deficit of -$43.1 billion, which was positive for Q2 GDP. There was also strength in biotechnology shares, led by a 19% jump in Biogen, after its Alzheimer’s drug showed positive results in a large clinical trial.

Sep 10-year T-notes (ZNU18 -0-050) this morning are down -5 ticks. Friday's closes: TYU8 +3.00, FVU8 +3.00. Sep 10-year T-notes on Friday rose to a 5-week high and closed higher on the weaker-than-expected U.S. Jun average hourly earnings report of +2.7% y/y, which was dovish for Fed policy. T-note prices also found support on the exchange by the U.S. and China of a 25% tariff on $36 billion worth of products.

The dollar index (DXY00 -0.27%) this morning is down -0.15 (-0.16%) at a fresh 3-week low, EUR/USD (^EURUSD+0.32%) is up +0.0031 (+0.26%) at a 3-week high and USD/JPY (^USDJPY -0.02%) is down -0.03 (-0.03%). Friday's closes: Dollar Index -0.433 (-0.46%), EUR/USD +0.0055 (+0.47%), USD/JPY -0.17 (-0.15%). The dollar index on Friday fell to a 3-week low and closed lower on the decline in the 10-year T-note yield to a 5-week low, which undercut the dollar's interest rate differentials. There was also strength in EUR/USD which rallied to a 3-week high after German May industrial production rose +2.6% m/m, the largest increase in 6 months, which was hawkish for ECB policy.

Metals this morning are higher with Aug gold (GCQ18 +0.82%) +10.3 (+0.83%) at a 1-1/2 week high, Sep silver (SIU18+1.10%) +0.181 (+1.13%) at a 1-week high, and Sep copper (HGU18 +1.06%) +0.029 (+1.01%). Friday's closes: Aug gold -3.00 (-0.24%), Sep silver -0.028 (-0.17%), Sep copper -0.002 (-0.07%). Metals on Friday closed lower with Sep copper at an 11-1/2 month low. Metals prices were undercut by the stronger-than-expected U.S. Jun payroll report of +213,000, which bolsters the case for additional Fed rate hikes. Metals were also undercut by the U.S./China trade war, which crimps global growth and demand for industrial metals. Metals prices were supported by the fall in the dollar index to a 3-week low.

Aug WTI crude oil prices (CLQ18 -0.03%) this morning are down -11 cents (-0.15%) and Aug gasoline (RBQ18 +1.04%) is +0.0251 (+1.19%). Friday's closes: Aug crude +0.86 (+1.18%), Aug gasoline -2.08 (-0.98%). Aug crude oil and gasoline on Friday settled mixed. Crude oil prices were boosted by the fall in the dollar index to a 3-week low and the stronger-than-expected U.S. Jun payroll report, which was supportive for economic growth and energy demand. Crude oil prices were undercut by negative carry-over from Thursday's EIA data that showed U.S. crude inventories rose +1.25 million bbl, the first increase in 4 weeks. Crude oil prices were also undercut by the U.S./Chinese trade war, which will slow global economic growth and demand for crude.

Overnight U.S. Stock Movers

Capital One Financial (COF +0.26%) was upgraded to 'Outperform' from 'Market Perform' at Oppenheimer with a price target of $113.

Michael Kors (KORS +1.52%) was rated a new 'Buy' at HSBC with a price target of $88.

Altice (ATUS +4.66%) was upgraded to 'Buy' from 'Neutral' at Guggenheim Securities with a price target of $24.

Tractor Supply (TSCO -0.47%) was upgraded to 'Overweight' from 'Equal-Weight' at Stephens with a price target of $88.

Six Flags Entertainment (SIX +1.00%) was downgraded to 'Market Perform' from 'Outperform' at Wells Fargo Securities.

GameStop (GME +3.55%) was rated a new 'Buy' at Jeffries with a price target of $18.

Ollie's Bargain Outlet Holdings (OLLI +1.92%) was upgraded to 'Neutral' from 'Sell' at Citigroup with a price target of $75.

Groupon (GRPN -0.46%) jumped 12% in pre-market trading after two people familiar with the matter said the company has approached several public companies in recent weeks to try to initiate interest in the sale of the company.

Twitter (TWTR +3.53%) fell -0.5% in after-hours trading after the Washington Post reported the company has suspended more than 1 million accounts a day in recent months as it seeks to reduce disinformation on the platform, which may result in a rare decline in the number of monthly users in Q2.

Autolus Therapeutics PLC (AUTL -0.08%) may initially move higher this morning after holder Arix reported a 7.9% stake in the company.

Intrexon (XON +2.90%) may move higher initially this morning on signs of insider trading after CEO Randal Kirk bought 7.48 million shares of his company's stock at an average price of $13.37 on July 3, according to a filing.

Anavex Life Sciences (AVXL -0.58%) filed to sell $50 million of stock in a "controlled equity offering" via Cantor Fitzgerald.