OVERNIGHT MARKETS AND NEWS

Jun E-mini S&Ps (ESM17 +0.07%) this morning are up +0.01% and European stocks are down -0.33%. U.S. equities ae being led higher by strength in energy producing stocks as Jul WTI crude oil (CLN17 +0.79%) climbs +0.89 to a 1-month high. Crude oil rallied after Saudi Arabian Energy Minister Khalid Al-Falih said that all oil producers participating in a deal to curb crude output are "on board" for an extension of crude production cuts for another 9 months. M&A activity was another positive for equity prices after Clariant AG agreed to buy Huntsman for $6.4 billion. European stocks were under pressure on Brexit concerns after Brexit Secretary Davis sad the UK may quit the Brexit talks unless the EU drops its demand for a "divorce payment" of up to 100 billion euros. Asian stocks settled mixed: Japan +0.45%, Hong Kong +0.86%, China -0.48%, Taiwan +0.50%, Australia +0.76%, Singapore -0.10%, South Korea +0.86%, India +0.35%.

The dollar index (DXY00 -0.13%) is down -0.11% at a 6-1/4 month low. EUR/USD (^EURUSD) is up +0.19% at a 6-1/4 month high on hawkish comments from German Chancellor Merkel who said the Euro is "too weak". USD/JPY (^USDJPY) is up +0.16%.

Jun 10-year T-note prices (ZNM17 -0.07%) are down -3.5 ticks.

German Chancellor Merkel said Germany's trade surplus is the result of the euro which is "too weak" because of ECB policy and that additional investment in Germany could help to reduce the trade surplus.

The Japan Apr trade balance was in surplus by 481.7 billion yen, narrower than expectations of 520.7 billion yen. Apr exports rose +7.5% y/y, weaker than expectations of +8.0% y/y, and Apr imports rose +15.1% y/y, stronger than expectations of +14.8% y/y.

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) Apr Chicago Fed national activity index (expected +0.02 to 0.10, Mar -0.19 to 0.08), (2) Philadelphia Fed President Patrick Harker (voter) speaks on the link between physical and economic wellbeing to the Jefferson College of Health Professions and Jefferson College of Pharmacy Commencement Ceremony, (3) Fed Governor Lael Brainard gives a speech on “The Roles of Opportunity and Inclusion in Strengthening the U.S. Economy” at the Minneapolis Fed, (4) USDA weekly grain export inspections, (5) USDA Apr Cold Storage, (6) USDA crop conditions and planting progress.

Notable Russell 2000 earnings reports today include: Booz Allen (consensus $0.43), Agilent (0.48), Nordson (1.31).

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

Equity conferences: American Gas Association Financial Forum on Mon; MUFG Japan REITs Conference on Mon; Electrical Products Group Conference on Mon-Wed; J.P. Morgan Global Technology, Media and Telecom Conference on Mon-Wed; UBS Global Health Care Conference on Mon-Thu; Wolfe Global Transportation Conference on Tue-Wed; Jefferies Global Automotive Aftermarket Investor Conference on Wed; UBS Auto & Auto Supplier 1x1 Conference on Thu.

OVERNIGHT U.S. STOCK MOVERS

Ford Motor Co. (F +0.74%) is up 3% in pre-market trading on news that the company is replacing CEO Mark Fields with Jim Hackett.

Huntsman (HUN +3.37%) jumped over 5% in pre-market trading after Clariant AG agreed to buy the company in an all-stock deal valued at about $6.4 billion.

Mylan (MYL -0.55%) rose over 1% in pre-market trading after it was upgraded to 'Overweight' from 'Equal Weight' at Barclays.

Qualcomm (QCOM +2.76%) gained more than 1% in pre-market trading after it was upgraded to 'Overweight' from ‘Neutral' at JPMorgan Chase.

Plains All American (PAA +2.24%) was upgraded to 'Outperform' from 'Market Perform' at Raymond James with a 12-month target price of $32.

Nutanix (NTNX unch) was upgraded to 'Buy' from 'Neutral' at Goldman Sachs with a 12-month target price of $31.

Zoe's Kitchen (ZOES +1.68%) was downgraded to 'Neutral' from 'Outperform' at Baird.

Applied Optoelectronics (AAOI -0.69%) was initiated with a 'Strong Buy' at Needham & Co. with a 12-month target price of $85.

Scotts Miracle-Gro (SMG +0.88%) was rated a new 'Gradually Accumulate' at Great Lakes Review with a 12-month target price of $105.

Myovant Sciences Ltd (MYOV +0.17%) climbed 4% in after-hours trading after it said a Phase 2 study by Takeda of relugolix in Japanese women with endometriosis-associated pain met its primary endpoint and significantly reduced pelvic pain versus a placebo.

MARKET COMMENTS

June E-mini S&Ps (ESM17 +0.07%) this morning are up +0.25 points (+0.01%). Friday's closes: S&P 500 +0.68%, Dow Jones +0.69%, Nasdaq +0.45%. The S&P 500 on Friday closed higher on short-covering after the steep decline seen mid-week, on strength in energy stocks after crude oil prices rose +2.03% to a 1-month high, and on strength in commodity stocks on the fall in the dollar index to a 6-1/4 month low.

June 10-year T-notes (ZNM17 -0.07%) this morning are down -3.5 ticks. Friday's closes: TYM7 -3.00, FVM7 -1.50. Jun 10-year T-notes on Friday closed lower on reduced safe-haven demand with the rally in stocks, and on the +2.03% rally in crude oil to a 1-month high, which boosted inflation expectations.

The dollar index (DXY00 -0.13%) this morning is down -0.105 (-0.11%) to a 6-1/4 month low. EUR/USD (^EURUSD) is up +0.0021 (+0.19%) to a 6-1/4 month high and USD/JPY (^USDJPY) is up +0.16%. Friday's closes: Dollar index -0.737 (-0.75%), EUR/USD +0.0103 (+0.93%), USD/JPY -0.23 (-0.210%). The dollar index on Friday sold off to a 6-1/4 month low and closed lower on dovish comments from St. Louis Fed President Bullard who said that recent economic data have been weak and the FOMC's projected rate for raising interest rates may be too steep. In addition, there was strength in EUR/USD which climbed to a 6-1/4 month high on the 9-3/4 year high in the Eurozone May consumer confidence index and on ECB Governing Council member Vasiliauskas' comment that the ECB should use its June meeting to start building a case for unwinding of QE.

July WTI crude oil prices (CLN17 +0.79%) this morning are up +45 cents (+0.89%) to a 1-month high and July gasoline (RBN17 +0.48%) is up +0.0095 (+0.58%) to a 1-month high. Friday's closes: Jul crude +1.01 (+2.03%), Jul gasoline +0.0437 (+2.72%). Jul crude oil and gasoline on Friday moved higher with Jul crude at a 1-month high and Jul gasoline at a 3-1/2 week high. Crude oil prices were boosted by the slide in the dollar index to a 6-1/4 month low and by expectations for OPEC to extend its crude production cuts to Mar 2018 when it meets on May 25.

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