Overnight Markets and News

Sep E-mini S&Ps (ESU18 -0.07%) this morning are down -0.03% and European stocks are up +0.47%. Reduced political concerns in Italy boosted Italian and European stocks and lifted Italian government bonds as the yield on Italy's 10-year government bond dropped -20 bp back below 3.00% after Italian Finance Minister Tria said "there is no discussion of any proposal to leave the euro." Gains in the overall market were limited on weakness in energy stocks as Jul WTI crude oil (CLN18 -1.08%) falls -1.20% after Interfax reported Russia boosted its crude production in the first week of June to 11.1 million bpd, above the 10.95 million bpd envisioned by its agreement with OPEC. Asian stocks settled mixed: Japan +0.48%, Hong Kong +0.34%, China -0.47%, Taiwan -0.06%, Australia closed for holiday, Singapore +0.15%, South Korea +0.71%, India +0.11%. Weakness in energy and health-care stocks undercut China's Shanghai Composite which fell to a 1-year low, while a rally in USD/JPY and a jump in Japan Apr core machine orders lifted Japan's Nikkei Stock Index.

The dollar index (DXY00 +0.09%) is up +0.13%. EUR/USD (^EURUSD +0.15%) is up +0.13%. USD/JPY (^USDJPY +0.41%) is up +0.45%.

Sep 10-year T-note prices (ZNU18 -0-065) are down -6.5 ticks.

UK Apr industrial production unexpectedly fell -0.8% m/m, weaker than expectations of +0.1% m/m and the biggest decline in 4 months.

UK Apr manufacturing production unexpectedly declined -1.4% m/m, weaker than expectations of +0.3% m/m and the biggest decline in 5-1/2 years.

China May CPI rose +1.8% y/y, right on expectations. May PPI rose +4.1% y/y, stronger than expectations of +3.9% y/y.

Japan Apr core machine orders jumped +10.1% m/m, stronger than expectations of +2.4% m/m and the largest increase in 2-1/4 years.

U.S. Stock Preview

Key U.S. news today includes: (1) USDA weekly grain export inspections, (2) Treasury auctions of $32 billion 3-year T-notes and $22 billion of 10-year T-notes, (3) USDA weekly Crop Progress.

Notable Russell 1000 earnings reports today include: none.

U.S. IPO's scheduled to price today: Far Point Acquisition Company (FPAC).

Equity conferences this week: Stifel Cross Sector Insight Conference on Mon-Wed, Nasdaq Investor Conference on Tue, Wells Fargo West Coast Energy Conference on Tue, Morgan Stanley Financials Conference on Tue-Wed, Goldman Sachs Global Health Care Conference on Tue-Thu, Deutsche Bank Global Consumer Conference on Tue-Thu, William Blair Growth Stock Conference on Tue-Thu, Berenberg Design Software Conference on Wed, ACI Hospitality Minds Europe Conference on Wed-Thu, UBS Industrials and Transportation Conference on Wed-Thu, RBC Capital Markets Financial Technology Investor Day on Thu, Vertical Research Partners Materials Conference on Thu.

Market Comments

Sep S&P 500 E-minis (ESU18 -0.07%) this morning are down -0.75 points (-0.03%). Friday's closes: S&P 500 +0.31%, Dow Jones +0.30%, Nasdaq unch. The S&P 500 on Friday closed higher on the stronger-than-expected China May trade data that bolsters optimism in the global economy after China May exports rose +12.6% y/y (stronger than expectations of +11.1% y/y) and China May imports rose +26.0% y/y (stronger than expectations of +18.0% y/y and the largest increase in 4 months). Stocks were also supported by signs of strength in the German economy after German Apr imports rose +2.2% m/m, stronger than expectations of +0.6% m/m and the biggest increase in 15-months. Tech stocks were undercut by weakness in Apple and its suppliers as Apple fell -0.9% after the Nikkei newspaper reported that Apple told its supply chain to prepare for -20% fewer components for iPhones debuting in the second half of this year compared with last year's order.

Sep 10-year T-notes (ZNU18 -0-065) this morning are down -6.5 ticks. Friday's closes: TYU8 unch, FVU8 +0.75. Sep 10-year T-notes on Friday settled unchanged. T-note prices found support on carry-over support from a rally in German bund prices after German Apr industrial production unexpectedly declined. T-note prices also found support on increased safe-haven demand rom Italy's political crisis after the yield on the 10-year Italian government bond rose to a 1-week high of 3.13%. T-note prices were undercut by strength in stocks that reduced the safe-haven demand for T-notes.

The dollar index (DXY00 +0.09%) this morning is up +0.123 (+0.13%)). EUR/USD (^EURUSD +0.15%) is up +0.0015 (+0.13%). USD/JPY (^USDJPY +0.41%) is up +0.49 (+0.45%). Friday's closes: Dollar Index +0.154 (+0.16%), EUR/USD -0.0031 (-0.26%), USD/JPY -0.15 (-0.14%). The dollar index on Friday closed higher on weakness in EUR/USD after German Apr industrial production unexpectedly fell -1.0% m/m and afer the yield on the 10-year Italian government bond rose to a 1-week high of 3.13% on continued Italian political risks.

Metals prices this morning are mixed with Aug gold (GCQ18 -0.20%) -3.5 (-0.27%), Jul silver (SIN18 +0.38%) +0.049 (+0.29%) and Jul copper (HGN18 -1.48%) -0.044 (-1.32%). Friday's closes: Aug gold -0.30 (-0.02%), Jul silver -0.074 (-0.44%), Jul copper +0.0250 (+0.76%). Metals on Friday settled mixed. Metals prices were undercut by a stronger dollar and by fund liquidation of gold as long gold positions in ETFs dropped to a 1-3/4 month low Thursday ahead of the Jun 12-13 FOMC meeting where the Fed is expected to raise interest rates. Copper closed higher on fund buying due to the possibility of a strike at Chile's copper mine at Escondida, the world's biggest.

Jul WTI crude oil prices (CLN18 -1.08%) this morning are down -79 cents (-1.20%) and Jul gasoline (RBN18 -1.13%) is -0.0282 (-1.33%$). Friday's closes: Jul crude -0.21 (-0.32%), Jul gasoline +0.0005 (+0.02%). July crude oil and gasoline on Friday settled mixed. Crude oil prices were undercut by a stronger dollar and by the Baker Hughes report that U.S. active oil rigs in the week of Jun 8 rose by +1 rig to a 3-1/4 year high of 862 rigs. Gasoline found support on an increase in the crack spread to a 3-session high.

Overnight U.S. Stock Movers

Envision Healthcare (EVHC +1.56%) may open to the upside this morning after it was acquired by KKR for about $9.9 billion.

Applied Optoelectronics (AAOI +0.84%) may open lower this morning after it was rated a 'Sell' at Rosenblatt Securities with a price target of $30.

Incyte (INCY +1.43%) was upgraded to 'Outperform' from 'In-line' at Evercore ISI with a price target of $96.

First Data (FDC +0.30%) was upgraded to 'Buy' from 'Neutral' at Goldman Sachs with a price target of $25.

Match Group (MTCH +1.59%) was upgraded to 'Buy' from 'Hold' at Jeffries.

DTE Energy (DTE -0.07%) was downgraded to 'Market Perform' from 'Outperform' at Wells Fargo Securities,

Park Hotels (PK -0.35%) was downgraded to 'Sell' from 'Neutral' at Goldman Sachs.

Broadridge Financial Solutions (BR +0.53%) will replace Range Resources (RRC -1.17%) in the S&P 500 Index prior to the open of trading on Monday, June 18.

HollyFrontier (HFC +0.57%) will replace Acuity Brands (AYI +0.28%) in the S&P 500 Index prior to the open of trading on Monday, June 18.

United Continental Holdings (UAL +0.65%) reported May traffic rose +6.7% and capacity increased +4.2% in May with consolidated load factor up +2.0 points.

VeriFone (PAY -0.18%) fell -0.2% in after-hours trading after it reported Q1 adjusted EPS of 25 cents, below consensus of 28 cents.

Shake Shack (SHAK +1.83%) fell 1% in after-hours trading after it filed a mixed securities shelf, which includes up to 12.3 million shares of Class A common stock that may be sold from time to time.