Overnight Markets And News

Jun E-mini S&Ps (ESM18 +0.38%) this morning are up +0.31% at a 2-1/2 month high and European stocks are up +0.64%. Optimism in the U.S. economic outlook is supportive for stocks after last Friday's U.S. payrolls report showed a larger-than-expected increase in non-farm payrolls and in hourly earnings and the ISM report showed U.S. manufacturing activity expanded at a faster pace in May. European stocks moved higher as political tensions in Italy eased with the formation of a coalition government, which pushed the yield om the 10-year Italian government bond down to a 1-week low of 0.2508%. Gains in European stocks were limited after the Eurozone Jun Sentix investor confidence fell -9.9 to a 20-month low of 9.3. Asian stocks settled mostly higher: Japan +1.37%, Hong Kong +1.66%, China +0.52%, Taiwan +1.47%, Australia +0.59%. Singapore +1.17%, South Korea +0.52%, India -0.61%. Asian markets gained on reduced geopolitical concerns on the Korean peninsula with the revival of the U.S.-North Korean summit, and Japan's Nikkei Stock Index climbed to a 1-week high as a rally in exporters led an advance in Japanese stocks as the yen remained weak against the dollar.

The dollar index (DXY00 -0.04%) is down -0.37%. EUR/USD (^EURUSD +0.60%) is up +0.53% at a 1-week high as Italian political risks eased. USD/JPY (^USDJPY +0.03%) is down -0.02%.

Sep 10-year T-note prices (ZNU18 -0-050) are down -4 ticks.

The Eurozone Jun Sentix investor confidence fell -9.9 to a 20-month low of 9.3, weaker than expectations of -0.7 to 18.5.

Eurozone Apr PPI was unch m/m and up +2.0% y/y, weaker than expectations of +0.2% m/m and +2.4% y/y.

The UK May Markit/CIPS construction PMI was unch at 52.5, stronger than expectations of -0.5 to 52.0.

U.S. Stock Preview

Key U.S. news today includes: (1) Apr factory orders (expected -0.5%, Mar +1.6% and +0.3% ex transportation), (2) USDA weekly grain export inspections, (3) USDA weekly Crop Progress.

Notable Russell 1000 earnings reports today include: Dell (consensus $1.16), Casey's General Store (0.68), Palo Alto Networks (0.95).

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

Equity conferences this week: Needham & Co Automotive Tech Day on Mon, Evercore ISI Autonomous Driving, AI & Mobility Forum on Mon, American Society of Clinical Oncology Meeting on Mon, Capital Link Shipping Forum Panel on Mon, Money20/20 Europe Conference on Mon, Gartner Infrastructure & Operations Management Summit on Tue, Goldman Sachs Lodging, Gaming, Restaurant & Leisure Conference on Tue, Royal Bank of Canada Global Energy Conference on Tue, Jefferies Global Healthcare Conference on Tue-Wed, Bank of America Merrill Lynch Global Technology, Media & Telecom Conference on Tue-Thu, Robert W. Baird & Co. Global Consumer, Technology & Services Conference on Tue-Thu, NAREIT REITWeek Investor Conference on Tue-Thu, Apple Worldwide Developers Conference on Tue-Fri, Deutsche Bank Global Industrials & Materials Summit on Wed-Thu, Sandler O'Neill Global Exchange and Brokerage Conference on Wed-Thu, Baird Global Consumer, Technology & Services Conference on Thu, Gabelli Movie & Entertainment Conference on Thu, Piper Jaffray Consumer Marketplace Conference on Thu.

Market Comments

June S&P 500 E-minis (ESM18 +0.38%) this morning are up +8.50 points (+0.31%) at a 2-1/2 month high. Friday's closes: S&P 500 +1.08%, Dow Jones +0.90%, Nasdaq +1.67%. The S&P 500 on Friday rallied to a 1-1/2 week high and closed higher on carry-over support from a rally in European stocks on reduced Italian political risks after Italy's Five Star Movement and League parties finally agreed on a coalition government. Stocks were also supported by positive U.S. economic data with the +223,000 increase in U.S. May non-farm payrolls (stronger than expectations of +190,000) and the +1.4 point increase in the U.S. May ISM manufacturing index to 58.7 (stronger than expectations of +0.9 to 58.2).

Sep 10-year T-notes (ZNU18 -0-050) this morning are down -4 ticks. Friday's closes: TYU8 -19.00, FVU8 -11.75. Sep 10-year T-notes on Friday closed lower on reduced Italian political tensions and the rally in Bund prices. T-notes also closed lower on stronger-than-expected U.S. economic data that included the payroll report of +223,000 and the stronger than expected May ISM manufacturing index.

The dollar index (DXY00 -0.04%) this morning is down -0.351 (-0.37%). EUR/USD (^EURUSD +0.60%) is up +0.0062 (+0.53%) at a 1-week high. USD/JPY (^USDJPY +0.03%) is down -0.02 (-0.02%). Friday's closes: Dollar Index +0.206 (+0.22%), EUR/USD -0.0034 (-0.29%), USD/JPY +0.72 (+0.66%). The dollar index on Friday closed higher on the stronger-than-expected U.S. economic data (May payrolls and the May ISM manufacturing index) and on the increase in the 10-year T-note yield to a 4-session high, which improved the dollar's interest rate differentials.

Metals prices this morning are higher with Aug gold (GCQ18 -0.04%) +0.2 (+0.02%), Jul silver (SIN18 +0.09%) +0.019 (+0.12%), and Jul copper (HGN18 +0.58%) +0.019 (+0.61%). Friday's closes: Aug gold -5.40 (-0.41%), Jul silver -0.017 (-0.10%), Jul copper +0.0335 (+1.09%). Metals on Friday settled mixed with Aug gold at a 1-week low. Metals prices were undercut by strength in the dollar and on reduced safe-haven demand for precious metals with the reduced Italian political tensions. Copper prices moved higher on signs of U.S. economic strength after the May ISM manufacturing index rose more than expected and after the U.S. May unemployment rate fell to a 48-year low.

Jul WTI crude oil prices (CLN18 -0.56%) this morning are down -43 cents (-0.65%) at a 1-3/4 month low and Jul gasoline (RBN18 -0.96%) is down -0.0249 (-1.16%) at a 3-1/2 week low. Friday's closes: Jul crude -1.23 (-1.83%), Jul gasoline -0.0171 (-0.79%). Jul crude oil and gasoline on Friday closed lower on a stronger dollar and on negative carry-over from Thursday's EIA data that showed U.S. crude production rose +0.4% the week of May 25 to a record 10.769 million bpd.

Overnight U.S. Stock Movers

Prudential Financial (PRU +2.07%) was upgraded to 'Buy' from 'Neutral' at Goldman Sachs with a price target of $117.

Whirlpool (WHR +0.39%) was upgraded to 'Outperform' from 'Neutral' at Credit Suisse with a price target of $195.

MetLife (MET +1.46%) was downgraded to 'Neutral' from 'Buy' at Goldman Sachs.

AXA Equitable Holdings (EQH +0.84%) was rated a new 'Buy' at Goldman Sachs with a price target of $34.

Five Below (FIVE +0.96%) was rated a new 'Overweight' at JPMorgan Chase with a price target of $87.

Windham Hotels & Resorts (WH +3.19%) was rated a new 'Buy' at Goldman Sachs with a price target of $82.

Palo Alto Networks (PANW +0.53%) may open to the upside this morning when it reported after the close of trading Friday that its preliminary Q3 revenue was $567.1 million, better than consensus of $545.8 million.

Northrop Grumman (NOC +0.84%) was awarded a $866 million contract from the U.S. Air Force for sustainment services and modification projects for the Ballistic Missile Early Warning systems, the PAVE Phased Array Warning system radars and the Parameter Acquisition Radar Attack Characterization system.

Henry Schein (HSIC +0.48%) may move lower this morning after holders approved a proposal that will double the number of authorized shares of common stock to 480 million from 240 million.

General Motors (GM +1.17%) gained almost 1% in after-hours trading after people familiar with the matter said the company's May auto sales rose +12%.

comScore (SCOR -3.80%) rose nearly 3% in after-hours trading after it relisted on the Nasdaq Global Select Market as of Friday.

elf Beauty (ELF -2.49%) was rated a new 'Outperform' at Oppenheimer with a price target of $23.

Viking Therapeutics (VKTX -2.40%) fell almost 5% in after-hours trading after it received a negative mention at 'Seeking Alpha.'