OVERNIGHT MARKETS AND NEWS

Dec E-mini S&Ps (ESZ16 +0.13%) are up +0.05% on increased M&A activity after CenturyLink agreed to buy Level 3 in a deal valued at about $34 billion. Gains were limited on concern that U.S. Presidential candidate Clinton's election prospects may suffer after the FBI reopened an investigation into her use of an unauthorized e-mail server. Oil producing stocks are also lower and undercut European stocks which are down -0.55%. Crude oil prices (CLZ16 -0.53%) are down -0.53% after weekend talks between OPEC and other major oil producers failed to come to an agreement on output cuts. Another negative for European stocks was the unexpected decline in German Sep retail sales which fell by the most in over 2 years. Asian stocks settled mostly lower: Japan -0.12%, Hong Kong -0.09%, China -0.12%, Taiwan -0.18%, Australia +0.64%, Singapore -0.08%, South Korea -0.23%, India closed for holiday. China's Shanghai Composite fell to a 1-week low after China's 1-year interest rate swaps climbed to a 1-1/2 year high of 2.76%, which bolstered speculation the PBOC will try to keep money rates high to curb asset bubbles. Japanese stocks were undercut on weaker-than-expected economic data on industrial production and retail sales.

The dollar index (DXY00 +0.26%) is up +0.20%. EUR/USD (^EURUSD) is down -0.31%. USD/JPY (^USDJPY) is up +0.22%.

Dec 10-year T-note prices (ZNZ16 +0.02%) are up +1 tick.

Eurozone Q3 GDP grew +0.3% q/q and +1.6% y/y, right on expectations.

The Eurozone Oct CPI rose +0.5% y/y, right on expectations. The Oct core CPI rose +0.8% y/y, right on expectations.

German Sep retail sales unexpectedly fell -1.4% m/m, weaker than expectations of +0.2% m/m and the biggest decline in over 2 years.

Japan Sep industrial production was unch m/m and rose +0.9% y/y, weaker than expectations of +0.9% m/m and +1.9% y/y.

Japan Sep retail sales was unch m/m and fell -1.9% y/y, weaker than expectations of +0.2% m/m and -1.8% y/y.

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) Sep personal spending (expected +0.5%, Aug unch) and Sep personal income (expected +0.4%, Aug +0.2%), (2) Sep PCE deflator (expected +0.2% m/m and +1.2% y/y, Aug +0.1% m/m and +1.0% y/y) and Sep PCE core deflator (expected +0.1% m/m and +1.7% y/y, Aug +0.2% m/m and +1.7% y/y), (3) Oct Chicago PMI (expected -0.2 to 54.0, Sep +2.7 to 54.2), (4) Oct Dallas Fed manufacturing activity (expected +5.5 to 1.8, Sep +2.5 to -3.7), (5) USDA weekly grain export inspections, (6) USDA Weekly Crop Progress.

Notable S&P 500 earnings reports today include: NextEra Energy (consensus $1.67), Southern Co (1.17), Tesoro (1.43), Vornado Realty Trust (1.28), General Growth Properties (0.35), Cardinal Health (1.21, Lowes (0.69, Dominion Resources (1.08), among others.

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

Equity conferences this week include: Gabelli & Company Automotive Aftermarket Symposium on Mon, Needham Next-Gen Storage Networking Conference on Wed, Goldman Sachs Industrials Conference on Wed-Thu, BancAnalysts Association of Boston Conference on Thu-Fri.

OVERNIGHT U.S. STOCK MOVERS

Level 3 Communications (LVLT +4.20%) jumped 4% in pre-market trading after CenturyLink agreed to buy the company in a cash, stock deal valued at $34 billion.

General Electric (GE +2.06%) is up 1% and Baker Hughes (BHI +8.38%) jumped nearly 9% in pre-market trading after GE agreed to combine its oil and gas business with Baker Hughes.

Time Warner (TWX -0.94%) was upgraded to 'Outperform' from 'Market Perform' at FBR Capital Markets with a 12-month target price of $104.

Cinemark (CNK unch) was upgraded to 'Buy' from 'Neutral' at Goldman Sachs with a 12-month target price of $46.

Fortune Brands Home & Security (FBHS -0.54%) was upgraded to 'Overweight' from 'Neutral' at JPMorgan Chase with a 12-month target price of $68.

AutoNation (AN -4.13%) was downgraded to 'Neutral' from 'Buy' at Bank of America/Merrill Lynch.

Home Depot (HD +1.08%) and Lowe's (LOW -0.19%) were both downgraded to 'Neutral' from 'Overweight' at Piper Jaffray.

Chevron (CVX +3.90%) was upgraded to 'Buy' from 'Neutral' at Goldman Sachs with a 12-month price target of $118.

Sherwin-Williams (SHW -1.16%) said that it believes that "no or minimal" divestitures will be necessary to complete its acquisition of Valspar (VAL-7.14%) and said it expects the deal to close by the end of Q1-2017.

Tesla (TSLA -1.98%) CEO Elon Musk late Friday unveiled a new type of solar roof that will be offered by Tesla after its intended acquisition of Solar City (SCTY -0.53%). Musk also introduced a Powerwall 2 product with 14kWh of storage.

Crispr Therapeutics (CRSP +5.82%) rallied in after-hours trading after news that Bayer in a 13D filing disclosed a 12.8% stake in the company. In addition, GlaxoSmithKline (GSK -0.69%) disclosed an 8.3% stake in CRSP.

Baidu's (BIDU +2.56%) rating was cut to neutral from outperform at Macquarie.

MARKET COMMENTS

Dec E-mini S&Ps (ESZ16 +0.13%) this morning are up +1.00 point (+0.05%). Friday's closes: S&P 500 -0.31%, Dow Jones -0.05%, Nasdaq -0.50%. The S&P 500 on Friday closed lower due to FBI Director Comey's announcement of a FBI review of a new batch of Clinton-related emails, which caused a 10 point drop in the betting odds for a Clinton win. Stocks were also undercut by the weaker-than-expected -0.7 point drop in the final-Oct University of Michigan U.S. consumer sentiment index and by concern about the sharp 26 bp rise in the 10-year T-note yield over the past several weeks as the 10-year yield on Friday edged to a new 5-month high. Stocks received a boost from the stronger-the-expected Q3 GDP report of +2.9%, which had positive implications for earnings although it also increased the odds for a Fed rate hike in December.

Dec 10-year T-notes (ZNZ16 +0.02%) this morning are up +1 tick. Friday's closes: TYZ6 +1, FVZ6 +3. Dec 10-year T-notes on Friday posted a 5-month low but recovered to close slightly higher on increased safe-haven demand on political uncertainty after FBI Director Comey announced the review of a new batch of Clinton-related emails. T-notes were undercut by the stronger-than-expected U.S. Q3 GDP report of +2.9%, which increased the chances for a December Fed rate hike. T-notes were also hurt by the rise in the 10-year breakeven inflation expectations rate to a 1-1/4 year high of 1.75% on Thursday.

The dollar index (DXY00 +0.26%) this morning is up +0.192 (+0.20%). EUR/USD (^EURUSD) is down -0.0034 (-0.31%). USD/JPY (^USDJPY) is up +0.23 (+0.22%). Friday's closes: Dollar index -0.540 (-0.55%), EUR/USD +0.0088 (+0.81%), USD/JPY -0.55 (-0.55%). The dollar index on Friday closed moderately lower on U.S. political uncertainty with the news that the FBI is reviewing a new batch of Clinton-related emails. The dollar index found underlying support from the stronger-than-expected U.S. Q3 GDP report of +2.9% and from favorable U.S. interest rates differentials with the 10-year T-note yield edging to a new 5-month high.

Dec crude oil prices (CLZ16 -0.53%) are down -26 cents (-0.53%) and Dec gasoline (RBZ16 -0.05%) is down -0.0078 (-0.54%). Friday's closes: Dec crude -1.02 (-2.05%), Dec gasoline -0.0228 (-1.54%). Dec crude oil and gasoline on Friday closed with fairly sharp losses on the lack of an agreement by the OPEC committee charged with deciding on individual country quota cuts to meet OPEC's production cut agreement. Crude oil prices found underlying support from the fairly sharp sell-off in the dollar index.