Overnight Markets And News

Jun E-mini S&Ps (ESM18 +0.15%) this morning are up +0.11% at a fresh 2-1/2 month high and European stocks are up +0.64% at a 1-week high. Strength in technology stocks is leading the overall market higher and mining companies and metal producers are stronger as well with the price of Jul COMEX copper (HGN18 +0.32%) up +0.43% at a 6-week high. Copper prices remained underpinned on supply concerns after copper workers at the Escondida copper mine in Chile, the world's biggest, have not ruled out a strike as they negotiate for higher wages. Weakness in energy producers is limiting the upside in the overall market with Jul WTI crude oil (CLN18 -0.54%) down -0.37% at a new 1-3/4 month low. Crude oil prices are under pressure as people familiar with the matter said the U.S. government has asked Saudi Arabia and some other OPEC producers to boost their crude production by about 1 million bpd. U.S. retail gasoline prices have pushed up to 3-year highs after the U.S. reimposed sanctions on Iran. The Asian stocks settled mostly higher: Japan +0.28%, Hong Kong +0.31%, China +0.74%, Taiwan -0.08%, Australia -0.51%, Singapore +0.45%, South Korea +0.29%, India -0.31%. Asian bourses garnered support from Monday's rally in U.S. equity markets to 2-1/2 month highs with Japan's Nikkei Stock Index climbing to a 1-week high.

The dollar index (DXY00 +0.09%) is up +0.08%. EUR/USD (^EURUSD -0.14%) is down -0.13%. USD/JPY (^USDJPY-0.05%) is down -0.02%.

Sep 10-year T-note prices (ZNU18 +0-055) are up +4.5 ticks.

The Eurozone May Markit services PMI was revised lower to 53.8 from the originally reported 53.9, the slowest pace of expansion in 16-months.

Eurozone Apr retail sales rose +0.1% m/m, weaker than expectations of +0.5% m/m.

The UK May Markit services PMI rose +1.2 to 54.0, stronger than expectations of +0.2 to 53.0.

Japan Apr household spending unexpectedly fell -1.3% y/y, weaker than expectations of +0.8% y/y and the biggest decline in a year.

U.S. Stock Preview

Key U.S. news today includes: (1) final-May Markit U.S. services PMI (expected unrevised at 55.7, prelim-May +1.1 to 55.7), (2) May ISM non-manufacturing PMI (expected +0.8 to 57.6, Apr -2.0 to 56.8), (3) Apr JOLTS job openings (expected -290,000 to 6.350 million, Mar +472,000 to 6.55 million).

Notable Russell 1000 earnings reports today include: HD Supply (consensus $0.64), Guidewire Software (-0.01).

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

Equity conferences this week: Gartner Infrastructure & Operations Management Summit on Tue, Goldman Sachs Lodging, Gaming, Restaurant & Leisure Conference on Tue, Royal Bank of Canada Global Energy Conference on Tue, Jefferies Global Healthcare Conference on Tue-Wed, Bank of America Merrill Lynch Global Technology, Media & Telecom Conference on Tue-Thu, Robert W. Baird & Co. Global Consumer, Technology & Services Conference on Tue-Thu, NAREIT REITWeek Investor Conference on Tue-Thu, Apple Worldwide Developers Conference on Tue-Fri, Deutsche Bank Global Industrials & Materials Summit on Wed-Thu, Sandler O'Neill Global Exchange and Brokerage Conference on Wed-Thu, Baird Global Consumer, Technology & Services Conference on Thu, Gabelli Movie & Entertainment Conference on Thu, Piper Jaffray Consumer Marketplace Conference on Thu.

Market Comments

June S&P 500 E-minis (ESM18 +0.15%) this morning are up +3.00 points (+0.11%) at a new 2-1/2 month high. The S&P 500 on Monday climbed to a 2-1/2 month high and settled higher: S&P 500 +0.45%, Dow Jones +0.72%, Nasdaq +0.84%. Bullish factors included (1) optimism the U.S. economic recovery will continues after last Friday's U.S. payrolls report showed a larger-than-expected increase in non-farm payrolls and in hourly earnings and the ISM report showed U.S. manufacturing activity expanded at a faster pace in May, (2) carry-over support from a rally in European stocks as political tensions in Italy eased with the formation of a coalition government, which pushed the yield om the 10-year Italian government bond down to a 1-week low of 0.2508%. Bearish factors included (1) the -0.8% decline in U.S. Apr factory orders, weaker than expectations of -0.5%, and (2) weakness in energy stocks as crude oil prices fell -1.61% to a 1-3/4 month low.

Sep 10-year T-notes (ZNU18 +0-055) this morning are up +4.5 ticks. Sep 10-year T-notes on Monday closed lower: TYU8 -11.00, FVU8 -6.75. Bearish factors included (1) carry-over weakness from a slide in German bunds as Italian political risks eased, and (2) the rally in the S&P 500 to a 2-1/2 month high, which curbs safe-haven demand for T-notes.

The dollar index (DXY00 +0.09%) this morning is up +0.076 (+0.08%) . EUR/USD (^EURUSD -0.14%) is down -0.0015 (-0.12%). USD/JPY (^USDJPY -0.05%) is down -0.02 (-0.02%). The dollar index on Monday closed lower: Dollar Index -0.171 (-0.18%), EUR/USD +0.0040 (+0.34%), USD/JPY +0.28 (+0.26%). Bearish factors included (1) strength in EUR/USD which rose to a 1-week high as Italian political risks subsided after Italy's populist parties agreed on a coalition government, and (2) the weaker-than-expected U.S. Apr factory orders.

Metals prices this morning are mixed with Aug gold (GCQ18 -0.19%) -2.7 (-0.21%), Jul silver (SIN18 -0.25%) -0.041 (-0.25%) and Jul copper (HGN18 +0.32%) +0.014 (+0.43%) at a 6-week high. Metals on Monday settles mixed with Jul copper at a 1-1/2 week high: Aug gold -2.00 (-0.15%), Jul silver -0.010 (-0.06%), Jul copper +0.0360 (+1.16%). Bullish factors included (1) a weaker dollar, and (2) the potential for lower global copper supplies on strike concerns as wage negotiations begin for copper workers at Chile's copper mine at Escondida, the world's biggest. Bearish factors included (1) the rally in the S&P 500 to a 2-1/2 month high, which reduced the safe-haven demand for precious metals, and (2) the weaker than expected U.S. Apr factory orders.

Jul WTI crude oil prices (CLN18 -0.54%) this morning are down -24 cents (-0.37%) at a fresh 1-3/4 month low and Jul gasoline (RBN18 -1.50%) is down -0.0279 (-1.31%) at a 4-week low. Jul crude oil and gasoline on Monday closed lower with Jul crude at a 1-3/4 month low and Jul gasoline at a 3-1/2 week low: Jul crude -1.06 (-1.61%), Jul gasoline -0.0210 (-0.98%). Bearish factors included (1) a statement from OPEC members that stressed the need to ensure stable oil supplies as energy ministers from Saudi Arabia, the U.A.E., Kuwait, Algeria and Oman "emphasized the need for healthy market conditions that stimulate adequate investments in the energy sector in order to ensure stable oil supplies are made available in a timely manner to meet growing demand and offset declines in some parts of the world," and (2) negative carry-over from Friday’s data from Baker Hughes that showed U.S. active oil rigs in the week ended Jun 1 rose by +2 to a 3-year high of 861.

Overnight U.S. Stock Movers

Occidental Petroleum (OXY +0.31%) was upgraded to 'Buy' from 'Neutral' at Citigroup with a price target of $97.

TD Ameritrade (AMTD +1.56%) was rated a new 'Buy' at Compass Point Research & Trading LLC with a price target of $74.

Netflix (NFLX +0.52%) will replace Monsanto in the S&P 100 prior to the open of trading on Thursday, June 7.

Twitter (TWTR +3.36%) jumped 5% in after-hours trading when after it was announced that it will replace Monsanto in the S&P 500 prior to the open of trading on Thursday, June 7.

HealthEquity (HQY +0.35%) climbed nearly 5% in after-hours trading after it forecast full-year revenue of $278 million to $284 million, well above consensus of $227.4 million.

Starbucks (SBUX +0.28%) lost more than 1% in after-hours trading after Executive Chairman Howard Schultz said he will step down effective June 26.

Portola Pharmaceuticals (PTLA +0.02%) slid more than 2% in after-hours trading after it reported the retirement of CEO Bill Lis, effective August 1.

Dish Network (DISH -0.17%) rose more than 3% in after-hours trading after it was reported that co-founder Charles Ergen bought 100,000 shares of the company's stock.

Mylan NV (MYL -0.88%) gained 4% in after-hours trading after the FDA approved its biosimilar of Amgen's Neulasta drug.

Deciphera Pharmaceuticals (DCPH +47.86%) fell 7% in after-hours trading after it filed to sell 3.75 million shares of its common stock via Piper Jaffray and JP Morgan Chase.

Smartsheet (SMAR +1.03%) rose nearly 5% in after-hours trading after it reported Q1 revenue of $36.3 million, better than consensus of $33.3 million, and forecast Q2 revenue of $38.5 million to $39.5 million, above consensus of $37.2 million.

PolarityTE (COOL +1.83%) dropped more than 6% in after-hours trading after it was said to offer $25 million of its common stock at $24.50 to $26.00 a share, via Cantor Fitzgerald.

Quanex Building Products (NX -1.19%) climbed 3% in after-hours trading after it reported Q2 adjusted EPS of 14 cents, higher than consensus of 11 cents.

Ascena Retail Group (ASNA +10.24%) tumbled 11% in after-hours trading after it forecast a Q3 adjusted loss per share of -5 cents to a 5 cent profit, the midpoint below consensus of a profit of 3.5 cents.