Overnight Markets and News

Jun E-mini S&Ps (ESM18 -0.74%) this morning are down -0.70% and European stocks are down -1.25%, both at 2-week lows, on global trade concerns as a person familiar with the matter said President Trump is set to announce today about $50 billion of tariffs against China over intellectual-property violations. European stocks were also under pressure on signs of a slowdown in manufacturing activity after the Eurozone Mar Markit manufacturing PMI fell -2.0 to 56.6, the slowest pace of expansion in a year. The weaker-than-expected economic data along with the slide in stock prices has fueled demand for government bonds as the 10-year German bund yield fell to a 2-month low of 0.551%. The BOE is expected to maintain its benchmark interest rate at 0.50% and keep its asset purchase target at 435 billion pounds following today's BOE policy meeting. Asian stocks settled mixed: Japan +0.99%, Hong Kong -1.09%, China -0.53%, Taiwan -0.05%, Australia -0.22%, Singapore -0.56%, South Korea +0.53%, India -0.39%. China's Shanghai Composite fell to a 2-week low on trade concerns and after the PBOC raised interest rates in open market operations when they sold 10-billion yuan of 7-day reverse repos at 2.55%, up from 2.50% in a previous operation.

The dollar index (DXY00 -0.12%) is down -0.08% at a 1-month low as trade concerns weighed on the dollar. EUR/USD (^EURUSD -0.12%) is down -0.13%. USD/JPY (^USDJPY -0.36%) is down -0.42% at a 2-week low.

Jun 10-year T-note prices (ZNM18 +0-115) are up +12.5 ticks.

The Eurozone Mar Markit composite PMI fell -1.8 to 55.4, weaker than expectations of -0.3 to 56.8 and the slowest pace of expansion in 14 months.

The Eurozone Mar Markit manufacturing PMI fell -2.0 to 56.6, weaker than expectations of -0.5 to 58.1 and the slowest pace of expansion in a year.

The German Mar Markit/BME manufacturing PMI fell -2.2 to 58.4, weaker than expectations of -0.8 to 59.8 and the slowest pace of expansion in 8 months.

The German Mar IFO business climate fell -0.7 to an 11-month low of 114.7, stronger than expectations of -0.8 to 114.6.

The Japan Mar Nikkei manufacturing PMI fell -0.9 to 53.2, the slowest pace of expansion in 5 months.

U.S. Stock Preview

Key U.S. news today includes: (1) weekly initial unemployment claims (expected -1,000 to 225,000, previous -4,000 to 226,000) and continuing claims (expected -6,000 to 1.873 million, previous +4,000 to 1.879 million), (2) USDA weekly Export Sales, (3) Jan FHFA house price index (expected +0.4% m/m, Dec +0.3% m/m), (4) Mar Markit manufacturing PMI (expected +0.2 to 55.5, Feb -0.2 to 55.3), (5) Feb leading indicators (expected +0.5%, Jan +1.0%), (6) Mar Markit U.S. services PMI (expected +0.1 to 56.0, Feb 55.9), (7) Mar Kansas City Fed manufacturing activity (expected unch at 17, Feb +1 to 17), (8) Treasury auctions $11 billion 10-year TIPSm, (9) USDA Feb Cold Storage.

Notable Russell 1000 earnings reports today include: Nike (consensus $0.53), Carnival (0.43), Accenture (1.49), Michaels Cos (1.18), Conagra (0.57), Micron Technology (2.75), Cintas (1.27).

U.S. IPO's scheduled to price today: Sunlands Online Education Group (STG), Dropbox (DBX), PolyPid (POLY).

Equity conferences this week: Bank of America Merrill Lynch Global Industrials Conference on Tue-Thu, ACI European Fuels Markets & Refining Strategy Conference on Thu, Gabelli & Company Waste Conference on Fri.

Market Comments

Jun S&P 500 E-mini stock futures (ESM18 -0.74%) this morning are down -19.00 points (-0.70%) at a 2-week low. Wednesday's closes: S&P 500 -0.18%, Dow Jones -0.18%, Nasdaq -0.47%. The S&P 500 on Wednesday closed lower on the U.S. Q4 current account deficit of -$125.2 billion, the largest deficit in 9 years, and a more hawkish Fed after the FOMC signaled a steeper path for future rate increases as they raised the 2019 median fed funds rate forecast to 2.9% from 2.7% and raised the 2020 median fed funds rate forecast to 3.4% from 3.1%. Stocks found support from the +3.0% increase in U.S. Feb existing home sales to 5.54 million (stronger than expectations of +0.4% to 5.40 million) and a rally in energy stocks after crude oil prices rose +2.57% to a 1-1/2 month high.

Jun 10-year T-note prices (ZNM18 +0-115) this morning are up +12.5 ticks. Wednesday's closes: TYM8 -3.50, FVM8 -1.75. Jun 10-year T-notes on Wednesday fell to a 3-week low and closed lower on the rally in crude oil prices to a 1-1/2 month high, which lifted inflation expectations as the 10-year T-note breakeven inflation rate rose to a 1-week high. In addition, the FOMC meeting results were hawkish as the FOMC raised its 2019 median fed funds rate forecast to 2.9% from 2.7% and the 2020 median fed funds forecast to 3.4% from 3.1%.

The dollar index (DXY00 -0.12%) this morning is down -0.069 (-0.08%) at a 1-month low. EUR/USD (^EURUSD -0.12%) is down -0.0016 (-0.13%) and USD/JPY (^USDJPY -0.36%) is down -0.45 (-0.42%) at a 2-week low. Wednesday's closes: Dollar Index -0.588 (-0.65%), EUR/USD +0.0096 (+0.78%), USD/JPY -0.48 (-0.45%). The dollar index on Wednesday closed lower on the U.S. Q4 current account deficit of -$128.2 billion, the largest deficit in 9 years and on the FOMC's median forecast for only two more 25 bp rate hikes this year, less than some market projections for three more rate hike this year.

May crude oil (CLK18 -0.09%) this morning is down -24 cents (-0.37%) and May gasoline (RBK18 -0.31%) is -0.0113 (-0.56%). Wednesday's closes: May WTI crude +1.63 (+2.57%), May gasoline +0.0471 (+2.38%). May crude oil and gasoline on Wednesday closed higher with May crude at a 1-1/2 month high and May gasoline at a 3-week high. Crude oil prices were boosted by a weaker dollar and the unexpected -2.62 million bbl decline in EIA crude inventories versus expectations for a build of +3.0 million bbl. Crude oil prices were also boosted by comments from President Trump reiterating that he may withdraw from the Iran nuclear deal, which raises the risk of Iran’s crude exports being curbed by renewed sanctions.

Metals prices this morning are higher with Apr gold (GCJ18 +0.66%) +7.7 (+0.58%), May silver (SIK18 +0.71%) +0.111 (+0.68%), and May copper (HGK18 +0.25%) +0.008 (+0.25%). Wednesday's closes: Apr gold +9.6 (+0.73%), May silver +0.234 (+1.45%), May copper +0.0205 (+0.67). Metals on Wednesday closed higher on a weaker dollar and the stronger-than-expected U.S. Feb existing home sales, which was supportive for copper prices.

Overnight U.S. Stock Movers

Trivago NV (TRVG +1.96%) was down over 2% in pre-market trading after it was downgraded to 'Underweight' from 'Neutral' at JPMorgan Chase.

FCB Financial Holdings (FCB +0.45%) was rated a new 'Sell' at UBS with a price target of $48.

Booking Holdings (BKNG +0.27%) was rated a new 'Buy' at Mizuho Securities USA with a price target of $2,600.

Five Below (FIVE -2.67%) gained +0.3% in after-hours trading after it forecast Q1 net sales of $290 million to $294 million, higher than consensus of $284.6 million.

Guess? (GES +3.60%) jumped 9% in after-hours trading after it reported Q4 adjusted EPS of 62 cents, higher than consensus of 54 cents, and forecast full-year EPS of 86 cents to 98 cents, the midpoint above consensus of 90 cents.

Evercore (EVR +0.43%) will replace Snyder's-Lance in the S&P MidCap 400 prior to the open of trading on Monday, Mar 26.

Tabula Rasa HealthCare (TRHC +0.60%) will replace Almost Family in the S&P SmallCap 600 prior to the open of trading on Monday, Apr 2.

ITT Inc (ITT +1.26%) was rated a new 'Buy' at D.A. Davidson with a price target of $60.

Herman Miller (MLHR -0.45%) fell 2% in after-hours trading after it forecast Q4 sales of $590 million to $610 million, below consensus of $612 million.

Altair Engineering (ALTR -1.22%) rose over 3% in after-hours trading after it forecast 2018 total revenue of $362 million to $366 million, better than consensus of $359.3 million.

Quad/Graphics (QUAD +0.30%) fell over 8% in after-hours trading after it acquired a majority stake in Rise Interactive, although no terms were mentioned.

Resonant (RESN -4.54%) slid almost 5% in after-hours trading after it announced that it will sell $20 million of its common stock in an underwritten public offering.