Morning Call For Thursday, June 8
OVERNIGHT MARKETS AND NEWS
Jun E-mini S&Ps (ESM17 +0.14%) this morning are up +0.16% and European stocks are up +0.66% after Eurozone Q1 GDP was revised higher +0.6% q/q from +0.5% q/q, the fastest pace of expansion in 2-years. Stock moves were contained, however, ahead of several market-moving events today that include the outcome of the ECB meeting and press conference from ECB President Draghi, the UK general election and the testimony by former FBI Director Comey to a Senate committee. Asian stocks settled mixed: Japan -0.38%, Hong Kong +0.34%, China +0.32%, Taiwan +0.15, Australia +0.17%, Singapore +0.29%, South Korea +0.19%, India -0.19%. Japanese stocks fell after Japan Q1 GDP was unexpectedly revised lower, while Chinese stocks rallied, with the Shanghai Composite climbing to a 1-month high, after China's May trade data showed both exports and imports rose more than expected.
The dollar index (DXY00 +0.13%) is up +0.15%. EUR/USD (^EURUSD) is down -0.20%. USD/JPY (^USDJPY) is up +0.25%.
Sep 10-year T-note prices (ZNU17 -0.14%) are down -6 ticks.
The China May trade balance was in surplus by +$40.81 billion, narrower than expectations of +$47.8 billion. May exports rose +8.7% y/y, stronger than expectations of +7.2% y/y. May imports rose +14.8% y/y, stronger than expectations of +8.3% y/y.
Eurozone Q1 GDP was revised upward to +0.6% q/q and +1.9% y/y from the originally reported +0.5% q/q and +1.7% y/y with the +0.6% q/q gain the fastest pace of increase in 2-years.
The Japan Q1 GDP was unexpectedly revised downward to +1.0% (q/q annualized) from +2.2% (q/q annualized), weaker than expectations of an upward revision to +2.4% (q/q annualized).
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) weekly initial unemployment claims (expected -8,000 to 240,000, previous +13,000 to 248,000) and continuing claims (expected +5,000 to 1.920 million, previous -9,000 to 1.915 million), (2) USDA weekly Export Sales.
Notable Russell 2000 earnings reports today include: JM Smucker (consensus $1.72), Vail Resorts (4.90), VeriFone Systems (0.30).
U.S. IPO's scheduled to price today: Plymouth Industrial REIT (PLYM).
Equity conferences: Jefferies Global Health Care Conference on Tue-Fri, Deutsche Bank Global Industrials and Materials Summit on Wed-Thu, Sandler O'Neill Global Exchange and Brokerage Conference on Wed-Thu, Goldman Sachs European Financial Conference on Wed-Fri, Macquarie Group Ltd Canadian Energy Conference on Thu, Gabelli & Company Entertainment Conference on Thu, Citi Small and Mid Cap Conference on Thu-Fri.
OVERNIGHT U.S. STOCK MOVERS
Sanderson Farms (SAFM +2.37%) was initiated with a 'Buy' at Mizuho Securities USA with a 12-month target price of $142.
T-Mobile (TMUS -0.29%) was initiated with a 'Buy' at Drexel Hamilton with a price target of $80.
Molson-Coors Brewing (TAP -6.50%) was downgraded to 'Sell' from 'Neutral' at Bryan Garnier.
Brown-Forman ({=BF-B=}) was downgraded to 'Neutral' from 'Outperform' at Credit Suisse.
Kite Pharma (KITE +7.12%) was upgraded to 'Buy' from 'Neutral' at BTIG LLC with a 12-month target price of $100.
Tyson Foods (TSN +1.85%) was initiated with a 'Buy' at Mizuho Securities USA with a 12-month target price of $71.
Deckers Outdoor (DECK +0.23%) lost 1% in after-hours trading after it was downgraded to 'Neutral' from 'Buy' at Buckingham Research.
Argan (AGX +1.32%) rose 4% in after-hours trading after it reported Q1 revenue of $230.5 million, higher than consensus of $190.5 million.
Greif (GEF +1.07%) tumbled over 9% in after-hours trading after it reported Q2 adjusted EPS of 67 cents, below consensus of 74 cents.
Verint Systems (VRNT -1.29%) rallied over 3% in after-hours trading after it reported Q1 adjusted EPS of 49 cents, well above consensus of 39 cents.
Okta (OKTA +3.38%) climbed over 5% in after-hours trading after it reported Q1 revenue of $53 million, above consensus of $48.22 million, and then said it sees full-year revenue of $233 million-$236 million, higher than consensus of $226.8 million.
MidSouth Bancorp (MSL +1.08%) dropped nearly 4% in after-hours trading after it announced that it had commenced a public offering of $50 million of its common stock.
Tailored Brands (TLRD +5.75%) gained nearly 2% in after-hours trading after it reported Q1 adjusted EPS of 27 cents, better than consensus of 19 cents.
MARKET COMMENTS
June E-mini S&Ps (ESM17 +0.14%) this morning are up +4.00 points (+0.16%). Wednesday's closes: S&P 500 +0.16%, Dow Jones +0.18%, Nasdaq +0.36%. The S&P 500 on Wednesday closed higher on increased chances that the ECB will be dovish and take its time in tapering QE after a report that the ECB will cut its Eurozone inflation forecasts at Thursday's ECB policy meeting. There was also strength in technology stocks. Stocks were undercut by the -5.13% plunge in crude oil prices to a 4-week low, which undercut energy stocks, and by long liquidation pressure ahead of Thursday's UK general election, the monthly ECB meeting, and former FBI Director Comey's testimony to Congress.
Sep 10-year T-notes (ZNU17 -0.14%) this morning are down -6 ticks. Wednesday's closes: TYU7 -7.50, FVU7 -4.75. Sep 10-year T-notes on Wednesday closed lower on long-liquidation pressure after a sharp 2-week rally that pushed T-note prices up to a contract high on Tuesday. Losses were limited by carry-over support from a rally in German bunds to a 6-week high after a report said the ECB at Thursday's policy meeting will cut its Eurozone inflation forecasts for 2017 through 2019.
The dollar index (DXY00 +0.13%) this morning is up +0.145 (+0.15%). EUR/USD (^EURUSD) is down -0.0022 (-0.20%) and USD/JPY (^USDJPY) is up +0.28 (+0.25%). Wednesday's closes: Dollar index +0.112 (+0.12%), EUR/USD -0.0020 (-0.18%), USD/JPY +0.41 (+0.37%). The dollar index on Wednesday closed higher on weakness in EUR/USD on a report that Eurozone officials will cut their Eurozone inflation forecasts at Thursday's ECB policy meeting. The dollar was also boosted by higher T-note yields that boosted the dollar's interest rate differentials.
Jul WTI crude oil prices (CLN17 -0.37%) this morning are up +27 cents (+0.59%) and July gasoline (RBN17 +0.61%) is +0.0189 (+1.27%). Wednesday's closes: Jul crude -2.47 (-5.13%), Jul gasoline -0.0632 (-4.07%). Jul crude oil and gasoline on Wednesday sold off to 4-week lows and closed sharply lower. Crude oil prices were undercut by the unexpected +3.295 million bbl increase in EIA crude inventories (vs expectations for a -3.0 million bbl) and by the unexpected +3.32 million bbl increase in EIA gasoline inventories (vs expectations for a -50,000 bbl decline).
Disclosure: None.