OVERNIGHT MARKETS AND NEWS

Mar E-mini S&Ps this morning (ESH18 -0.28%) are down -0.29% on concern about the implications of U.S. tariffs on the global economy. European stocks are up +0.33% after Germany's Social Democrats voted by 66% in favor to join Chancellor Merkel's Christian Democrats in a coalition government, higher than expectations of only 60% support. Gains in European markets were limited on increased political risks in Italy after Sunday's elections left the direction of the Italian government in gridlock with no clear winner. Another negative for European stocks was the larger-than-expected decline in the Eurozone Mar Sentix investor confidence to an 11-month low. Political concerns fueled losses in Italian government bonds but boosted the safe-haven demand for German 10-year bunds which rallied to a 5-week high. Asian stocks settled mostly lower: Japan -0.66%, Hong Kong -2.28%, China +0.07%, Taiwan -0.52%, Australia -0.57%, Singapore -1.17%, South Korea -1.22%, India -0.88%. Losses in Asian metals producers led markets lower there with Japan's Nikkei Stock Index falling to a 4-3/4 month low. China's Shanghai Composite closed slightly higher after Chinese Premier Li Keqiang promised more market reforms and reiterated China's 2018 growth target "at around 6.5%."

The dollar index (DXY00 +0.19%) is up +0.15. EUR/USD (^EURUSD) fell back from 2-1/2 week high and is down -0.14% on Italian political concerns. USD/JPY (^USDJPY) is down -0.10%.

Jun 10-year T-note prices (ZNM18 +0.09%) are up +3.5 ticks.

The Eurozone Mar Sentix investor confidence fell -7.9 to an 11-month low of 24.0, weaker than expectations of -1.0 to 30.9.

The Eurozone Feb Markit composite PMI was revised lower to 57.1 from the previously reported 57.5, the slowest pace of expansion in 4-months.

Eurozone Jan retail sales fell -0.1% m/m, right on expectations.

The China Feb Caixin services PMI fell -0.5 to 54.2, weaker than expectations of -0.4 to 54.3.

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) final-Feb Markit services PMI (expected unrevised at 55.9, prelim-Feb +2.6 to 55.9), (2) Feb ISM non-manufacturing PMI (expected -0.9 to 59.0, Jan +3.9 to 59.9), (3) USDA weekly grain export inspections.

Notable Russell 1000 earnings reports today include: none.

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

Equity conferences this week: IHS Markit CERA Week Conference on Mon, MUFG Securities Tech Tour on Mon, Citi Global Property CEO Conference on Mon-Wed, Raymond James Institutional Investors Conference on Mon-Wed, Deutsche Bank Media, Telecom and Business Services Conference on Mon-Wed, Evercore ISI Industrials Conference on Tue, Stifel Executive Summit on Tue, AIFA Conference on Tue, Royal Bank of Canada Financial Institutions Conference on Tue-Wed, UBS Global Consumer and Retail Conference on Wed-Thu, Bank of America Merrill Lynch Refining Conference on Thu, Boenning & Scattergood Water Summit on Thu, Evercore ISI Payments and FinTech Innovators Forum on Thu, J.P. Morgan Gaming Lodging Restaurant & Leisure Management Access Forum on Thu-Fri.

OVERNIGHT U.S. STOCK MOVERS

VMware (VMW -5.92%) was downgraded to 'Neutral' from 'Long-term Buy' at Hilliard Lyons.

Monster Beverage (MNST -0.11%) was upgraded to 'Buy' from 'Hold' at Deutsche Bank with a price target of $63.

Park Hotels (PK -5.82%) was downgraded to 'Underperform' from 'Neutral' at Bank of America/Merrill Lynch with a price target of $22.

H&R Block (HRB -1.75%) was upgraded to 'Buy' from 'Neutral' at Northcoast Research.

Finisar (FNSR +1.91%) was downgraded to 'Outperform' from 'Strong Buy' at Raymond James.

Teradata (TDC +2.75%) may open higher this morning after it was upgraded to 'Market-perform' from 'Underperform' at Bernstein.

Vornado (VNO +0.14%) said after the market closed Friday that it sees a Q1 charge of 11 cents on New York City property transfer taxes.

IPG Photonics (IPGP +0.34%) will replace Scripps Networks in the S&P 500 prior to the open of trading on Wednesday, March 7.

New York Mortgage Trust (NYMT +1.99%) will replace ALLETE in the S&P SmallCap 600 prior to the open of trading on Wednesday, March 7.

ALLETE (ALE -0.03%) will replace IPG Photonics in the S&P MidCap 400 prior to the open of trading on Wednesday, March 7.

Clearside Biomedical (CLSD +11.24%) gained nearly 3% in after-hours trading after it said it will release results on Monday before the market opens from its Phase 3 clinical trial of its suprachhoroidal CLS-TA in patients with macular edema.

MARKET COMMENTS

Mar S&P 500 E-mini stock futures (ESH18 -0.28%) this morning are down -7.75 points (-0.29%). Friday's closes: S&P 500 -1.33%, Dow Jones -1.68%, Nasdaq -1.52%. The S&P 500 on Friday rebounded from a 2-week low and closed higher on strength in energy stocks as crude oil recovered from a 2-week low and closed higher by +0.43%. Stocks were also supported by the University of Michigan U.S. Feb consumer sentiment report of -0.2 to 99.7, a smaller decline than expectations of -0.4 to 99.5. The main bearish factor was carry-over concern about the risk of a trade war after President Trump announced sanctions on U.S. steel and aluminum imports.

Jun 10-year T-note prices (ZNM18 +0.09%) this morning are up +3.5 ticks. Friday's closes: TYM8 -13.50, FVM8 -7.00. Jun 10-year T-notes on Friday closed lower on concern that U.S. tariffs on steel and aluminum imports could start a trade war that leads to reduced foreign demand for U.S. debt from China and Japan, the two largest holders of U.S. debt. T-note prices were also undercut by the slightly stronger-than-expected University of Michigan U.S. Feb consumer sentiment.

The dollar index (DXY00 +0.19%) this morning is up +0.132 (+0.15%). EUR/USD (^EURUSD) is down -0.0017 (-0.14%) and USD/JPY (^USDJPY) is down -0.11 (-0.10%). Friday's closes: Dollar Index -0.389 (-0.43%), EUR/USD +0.0050 (+0.41%), USD/JPY -0.49 (-0.46%). The dollar index on Friday closed lower on long liquidation on concern the action by the U.S. to impose tariffs on metals imports could start a trade war that undercuts economic growth. USD/JPY slumped to a 1-1/4 year low due to comments from BOJ Governor Kuroda who said the BOJ may be looking to exit its QE program next year.

Apr crude oil (CLJ18 +0.05%) this morning is up +4 cetns (+0.07%) and Apr gasoline (RBJ18 -0.58%) is -0.0101 (-0.53%). Friday's closes: Apr WTI crude +0.26 (+0.43%), Apr gasoline +0.0050 (+0.26%). Apr crude oil and gasoline on Friday recovered from 2-week lows and closed higher on a weaker dollar, and on news that OPEC Feb crude production fell -80,000 bpd to a 10-month low of 32.28 million bpd. Crude oil prices were undercut by increased crude exports from Libya after Libya Feb crude exports climbed +22% m/m to a 3-1/2 year high of 1.19 million bpd, and the decline in the crack spread to a 1-week low, which reduces the incentive for refiners to purchase crude oil to refine into gasoline.

Metals prices this morning are mixed with Apr gold (GCJ18 +0.08%) +1.5 (+0.11%), May silver (SIK18 +0.36%) +0.054 (+0.33%), and May copper (HGK18 -0.32%) -0.009 (-0.27%). Friday's closes: Apr gold +18.2 (+1.39%), May silver +0.190 (+1.17%), May copper +0.0015 (+0.05%). Metals on Friday closed higher on a weaker dollar, and the decline in the S&P 500 to a 2-week low, which boosted the safe-haven demand for precious metals. Copper prices were undercut by the rise in weekly Shanghai copper inventories by +41,755 MT to a 10-1/2 month high of 260,287 MT.