OVERNIGHT MARKETS AND NEWS

Mar E-mini S&Ps (ESH18 -0.38%) this morning are down -0.42% and European stocks are down -1.17% ahead of Fed Chair Powell's second day of testimony before Congress. His comments on Tuesday roiled the markets as they fueled speculation the Fed may quicken the pace of monetary tightening. The markets are also on edge on U.S. trade concerns after people familiar with the matter said President Trump is set to announce steep tariffs on steel and aluminum imports today. Asian stocks settled mostly lower: Japan -1.56%, Hong Kong +0.65%, China +0.44%, Taiwan -0.27%, Australia -0.71%, Singapore -0.12%, South Korea closed for holiday, India -0.40%. China's Shanghai Composite recovered from a 1-week low and closed higher after a gauge of Chinese manufacturing activity unexpectedly rose after the Feb Caixin (flash) manufacturing PMI unexpectedly rose +0.1 to a 6-month high of 51.6.

The dollar index (DXY00 +0.21%) is up +0.12% at a 1-1/2 month high on expectations for more hawkish testimony today from Fed Chair Powell. EUR/USD (^EURUSD) is down -0.10% at a 1-1/2 month low. USD/JPY (^USDJPY) is up +0.01%.

Jun 10-year T-note prices (ZNM18 +0.27%) are up +9 ticks.

The China Feb Caixin (flash) manufacturing PMI unexpectedly rose +0.1 to a 6-month high of 51.6, stronger than expectations of -0.2 to 51.3.

The Eurozone Jan unemployment rate was unch at a 9-year low of 8.6%, right on expectations.

The Eurozone Feb Markit manufacturing PMI was revised upward to 58.6 from the previously reported 58.5.

The German Markit/BME manufacturing PMI was revised higher to 60.6 from the previously reported 60.3.

Japan Feb consumer confidence unexpectedly fell -0.4 to a 5-month low of 44.3, weaker than expectations of +0.1 to 44.8.

Japan Q4 capital spending rose +4.3% y/y, stronger than expectations of +3.0% y/y. Q4 capital spending ex-software rose +4.7% y/y, stronger than expectations of +2.7% y/y.

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) weekly initial unemployment claims (expected +3,000 to 225,000) vs. previous -7,000 to 222,000 and weekly continuing claims (expected +50,000 to 1.925 million) vs. previous -73,000 to 1.875 million, (2) Jan personal spending (expected +0.2%) vs. Dec +0.4%, (3) Jan personal income (expected +0.3%) vs. Dec +0.4%, (4) Jan PCE deflator (expected +0.4% m/m and +1.7% y/y) vs. Dec +0.1% m/m and +1.7% y/y, (5) Jan core PCE deflator (expected +0.3% m/m and +1.5% y/y) vs.Dec +0.2% m/m and +1.5% y/y, (6) revised-Feb Markit manufacturing PMI (expected -0.1 to 55.8) vs. prelim-Feb +0.4 to 55.9, (7) Fed Chair Powell testifies on Fed’s semi-annual monetary report to Congress before the Senate Banking Committee, (8) Jan construction spending( expected +0.3%) vs. Dec +0.7%, (9) Feb ISM manufacturing index (expected -0.5 to 58.6) vs. Jan -0.2 to 59.1 and Feb ISM prices paid (expected -2.7 to 70.0) vs. Jan +4.3 to 72.7, (10) Feb total vehicle sales (expected 17.15 million) vs. Jan 17.07 million. Feb domestic vehicle sales (expected 13.30 million) vs. Jan 13.10 million.

Notable S&P 500 earnings reports today include: Centene (consensus $0.93), Beckton Dickson (2.41), Gartner (1.32), AmerisourceBergen (1.35), Emerson Electric (0.55), Laboratory Corp of America Holdings (2.38), Allergan PLC (4.74), Archer-Daniels-Midland (0.70), General Motors (1.38), Cummins (2.68), S&P Global (1.61), TransDigm (2.80).

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

Equity conferences this week: Bank of America Merrill Lynch Global Agriculture and Chemicals Conference on Wed-Thu, Keefe, Bruyette, & Woods Cards, Payments & Financial Technology Symposium on Thu, Simmons Energy Conference - Panel on Thu.

OVERNIGHT U.S. STOCK MOVERS

Monster Beverage (MNST -1.25%) dropped nearly 8% in after-hours trading after it reported Q4 net sales of $810.4 million, weaker than consensus of $843.0 million.

Portola Pharmaceuticals (PTLA -6.21%) slumped 10% in after-hours trading after it said on an earnings call that the FDA may want additional data on its AndexXa in a randomized study.

Health Insurance Innovations (HIIQ +0.16%) jumped 7% in after-hours trading after it reported Q4 adjusted Ebitda of $10.5 million, higher than consensus of $8.05 million, and then said it sees full-year adjusted Ebitda of $54 million to $57 million, better than consensus of $49.1 million

Box Inc (BOX +0.21%) tumbled 10% in after-hours trading after it forecast a Q1 adjusted loss per share between -8 and -9cents, a wider loss than consensus of -7 cents.

Hostess Brands (TWNK -6.13%) rose 4% in after-hours trading after it reported Q4 adjusted EPS of 17 cents, better than consensus of 14 cents, and then forecast full-year adjusted EPS of 65 cents to 70 cents, the midpoint higher than consensus of 67 cents.

Builders Firstsource (BLDR  -2.39%) rallied 13% in after-hours trading after it reported Q4 net sales of $1.78 billion, higher than consensus of $1.69 billion.

Corium International (CORI -0.38%) fell almost 4% in after-hours trading after it announced that it intends to offer $100 million of convertible senior notes due 2025.

Kratos Defense & Security Solutions (KTOS +0.58%) gained nearly 3% in after-hours trading after it reported Q4 adjusted EPS of 9 cents, above consensus of 7 cents.

QEP Resources (QEP +0.23%) rose 6% in after-hours trading after it reported an unexpected Q4 adjusted EPS of $1.13, stronger than consensus for a loss of -6 cents per share.

Sorrento Therapeutics (SRNE +17.75%) gained almost 5% in after-hours trading, on top of the 17% in gained in Wednesday's session after its Scilex won FDA approval for its non-opiod ZTLido for relief of a pain associated with shingles.

Habit Restaurants (HABT  -2.81%) climbed nearly 10% in after-hours trading after it forecast full-year revenue of $389 million to $393 million, higher than consensus of $389.3 million.

MARKET COMMENTS

Mar S&P 500 E-mini stock futures (ESH18 -0.38%) this morning are down -11.50 points (-0.42%). Wednesday's closes: S&P 500 -1.33%, Dow Jones -1.16%, Nasdaq -1.27%. The S&P 500 on Wednesday closed lower on negative carry-over from a slide in Chinese stocks on economic concerns after the China Feb manufacturing PMI fell -1.0 to 50.3, weaker than expectations of -0.2 to 51.1 and the slowest pace of expansion in 1-1/2 years. Stocks were also undercut by the unexpected -4.7% drop in U.S. Jan pending home sales, weaker than expectations of a +0.5% m/m increase and the biggest decline in 7-1/2 years.

Jun 10-year T-note prices (ZNM18 +0.27%) this morning are up +9 ticks. Wednesday's closes: TYM8 +8.00, FVM8 +3.00. Jun 10-year T-notes on Wednesday closed higher on the unexpected -4.7% m/m decline in U.S. Jan pending home sales, weaker than expectations of +0.5% m/m and the biggest drop in 7-1/2 years. T-note prices were also boosted by the -3.8point decline in the Feb Chicago PMI to a 6-month low of 61.9, weaker than expectations of -1.6 to 64.1.

The dollar index (DXY00 +0.21%) this morning is up +0.107 (+0.12%) at a 1-1/2 month high. EUR/USD (^EURUSD) is down -0.0012 (-0.10%) at a 1-1/2 month low and USD/JPY (^USDJPY) is up +0.01 (+0.01%). Wednesday's closes: Dollar Index +0.258 (+0.29%), EUR/USD -0.0039 (-0.32%), USD/JPY -0.65 (-0.61%). The dollar index on Wednesday rose to a 5-week high and closed higher on positive carry-over from Tuesday's comments from Fed Chair Powell who said that the data since the Dec FOMC meeting suggests a strengthening economy and that the U.S. "economic outlook remains strong." There was also weakness in EUR/USD which fell to a 1-1/4 month low after Eurozone Feb CPI rose +1.2% y/y, the slowest pace of increase in 14 months, and may prompt the ECB to delay ending QE.

Apr crude oil (CLJ18 -0.76%) this morning is down -45 cents (-0.73%) and Apr gasoline (RBJ18 -0.65%) is -0.0116 (-0.60%). Wednesday's closes: Apr WTI crude -1.37 (-2.17%), Apr gasoline -0.0597 (-3.01%). Apr crude oil and gasoline on Wednesday closed lower on the rally in the dollar index to a 5-week high and on the +0.1% increase in U.S. crude production the week of Feb 23 to a record high of 10.283 million bpd. Gasoline prices were undercut by the +2.48 million bbl increase in EIA gasoline inventories to a 1-year high, more than expectations of +600.000.

Metals prices this morning are weaker with Apr gold (GCJ18 -0.73%) -6.7 (-0.51%) at a 3-week low, May silver (SIK18-0.77%) -0.097 (-0.59%), and May copper (HGK18 -0.73%) -0.022 (-0.69%) at a 2-week low. Wednesday's closes: Apr gold -0.7 (-0.05%), May silver -0.027 (-0.16%), May copper -0.0540 (-1.69%). Metals on Wednesday closed lower with May copper at a 2-week low. Metals prices were undercut by dollar strength as the dollar index rose to a 5-week high, and by the unexpected decline in U.S Jan pending home sales. Copper prices were undercut by the weaker-than-expected China Feb PMI report.