Overnight Markets And News

Sep E-mini S&Ps (ESU18 -0.31%) this morning are down -0.20% and European stocks are down -0.37% on global trade concerns after Reuters reported that China asked the World Trade Organization (WTO) for authorization to impose trade sanctions on the U.S. Losses in European stocks were contained after the German ZEW economic confidence index unexpectedly rising for a second month. Another positive is signs of progress in EU and U.S. trade talks after the Trump administration said it will seek fast-track approval from Congress for a trade deal being negotiated with the EU. Asian stocks settled mixed: Japan +1.30%, Hong Kong -0.72%, China -0.18%, Taiwan +0.25%, Australia +0.62%, Singapore -0.35%, South Korea -0.42%, India -1.34%. Concerns bout escalation of trade tensions between the U.S. and China weighed on the yuan and Chinese stocks as the yuan fell to a 2-wek low against the dollar as the Shanghai Composite tumbled to a 2-1/2 year low. Japanese stocks rallied after the yen weakened against the dollar for a third day, which boosted Japanese exporter stocks.

The dollar index (DXY00 +0.09%) is up +0.11%. EUR/USD (^EURUSD -0.06%) is down -0.09%. USD/JPY (^USDJPY+0.20%) is up +0.22%.

Dec 10-year T-note prices (ZNZ18 -0-045) are down -5 ticks at a 1-month low as supply pressures weigh on T-notes with the Treasury set to auction $73 billion of T-notes and T-bonds this week.

The German Sep ZEW survey expectations of economic growth unexpectedly rose +3.4 to 76.0, stronger than expectations of -0.6 to 72.0.

The UK Jul ILO unemployment rate remained unch at 4.0%, right on expectations and the lowest in 43-1/2 years.

UK Jul average weekly earnings rose 2.6% 3-mo avg/year-over-year, stronger than expectations of +2.4% 3-mo avg/year-over-year. Jul average weekly earnings ex-bonus rose +2.9% 3-mo avg/year-over-year, stronger than expectations of +2.8% 3-mo avg/year-over-year.

U.S. Stock Preview

Key U.S. news today includes: (1) Jul JOLTS job openings (expected +13,000 to 6.675 million, Jun +3,000 to 6.662 million), (2) Jul wholesale trade sales (expected +0.1% m/m, Jun -0.1%) and final-Jul wholesale inventories (expected unrevised at +0.7% m/m), (3) Treasury auctions $35 billion 3-year T-notes.

Notable Russell 2000 earnings reports today include: none.

U.S. IPO's scheduled to price today: NIO Inc (NIO).

Equity conferences during the remainder of this week: 18th Annual EmTech Conference on Tue, Wells Fargo Net Lease REIT Forum on Tue, Houston IT Symposium on Tue, Credit Suisse Basic Materials Conference on Tue-Thu, Bank of America Merrill Lynch Global Health Care Conference on Wed-Thu, CL King & Associates Best Ideas Conference on Wed-Thu, Deutsche Bank Technology Conference on Wed-Thu, Goldman Sachs Communacopia Conference on Wed-Thu, Barclays Global Financial Services Conference on Wed-Fri, Morgan Stanley Global Health Care Conference on Wed-Fri, Morgan Stanley Laguna Conference on Wed-Fri, BMO Capital Markets Back to School Conference on Thu.

Market Comments

Sep S&P 500 E-minis (ESU18 -0.31%) this morning are down -5.75 points (-0.20%). Monday's closes: S&P 500 +0.19%, Dow Jones -0.23%, Nasdaq 100 +0.23%. The S&P 500 on Monday closed higher on carry-over support from a rally in European stocks as Italian bank stocks climbed on reduced Italian political risks after Italian Finance Minister Tria said Italy's impending budget will be within EU fiscal rules, and after EU chief negotiator Barnier said a Brexit deal within 2 months is realistic. Stocks were also supported by news that U.S. Jul consumer credit rose +$16.64 billion, stronger than expectations of +$14.0 billion.

Dec 10-year T-notes (ZNZ18 -0-045) this morning are down -5 ticks at a 1-month low. Monday's closes: TYZ8 +0.5, FVZ8 -0.25. Dec 10-year T-notes on Monday closed little changed. T-note prices were supported by weakness in energy prices that reduced inflation expectations and by dovish comments from Atlanta Fed President Bostic who said the Fed should pause from further rate hikes once it reaches a neutral interest rate. T-note prices were undercut by supply pressures with the Treasury auctioning $73 billion of T-notes and T-bonds this week.

The dollar index (DXY00 +0.09%) this morning is up +0.104 (+0.11%), EUR/USD (^EURUSD -0.06%) is down -0.0010 (-0.09%), and USD/JPY (^USDJPY +0.20%) is up +0.25 (+0.22%). Monday's closes: Dollar Index -0.215 (-0.23%), EUR/USD +0.0041 (+0.35%), USD/JPY +0.14 (+0.13%). The dollar index on Monday closed lower on strength in EUR/USD which moved higher after the 10-year German bund yield jumped to a 1-month high, which improved the euro's interest rate differentials. There was also strength in GBP/USD, which climbed to a 1-1/4 month high, after EU chief negotiator Barnier said a Brexit deal within 2 months was realistic.

Metals prices this morning are mixed with Dec gold (GCZ18 -0.03%) -1.0 (-0.08%), Dec silver (SIZ18 -0.25%) -0.031 (-0.22%) and Dec copper (HGZ18 -0.25%) +0.003 (+0.10%). Monday's closes: Dec gold -0.6 (-0.05%), Dec silver +0.011 (+0.08), Dec copper +0.55 (+0.21%). Metals on Monday settled mixed. Metals prices were boosted by a decline in the dollar and by signs of tighter copper supplies after LME copper inventories fell -7,425 MT to a 7-1/2 month low of 238,750 MT. Gold closed lower on continued fund selling after long gold positions in ETFs fell to a 10-1/4 month low Friday.

Oct WTI crude oil prices (CLV18 +0.37%) this morning are up +26 cents (+0.38%) and Oct gasoline (RBV18 +1.23%) is +0.0225 (+1.15%). Monday's closes: Oct crude oil -0.21 (-0.31%), Oct gasoline -1.08 (-0.55%). Oct crude oil and gasoline on Monday closed lower on concern that an escalation of the China/U.S. trade war will curb global economic growth and energy demand. Crude oil prices were also undercut by forecasts for Wednesday’s weekly EIA data to show that crude oil supplies at Cushing, the delivery point for WTI crude oil futures, will increase by +900,000 bbl. Crude oil prices were supported by the weaker dollar. 

Overnight U.S. Stock Movers

Wingstop (WING -3.20%) was downgraded to 'Neutral' from 'Buy' at Goldman Sachs with a price target of $66.

Nike (NKE +2.24%) was upgraded to 'Buy' from 'Hold' at Canaccord Genuity with a price target of $95.

Casey's General Stores (CASY +1.57%) rose nearly 3% in after-hours trading after it reported Q1 revenue of $2.59 billion, stronger than consensus of $2.57 billion.

Nutanix (NTNX  +0.95%) gained more than 3% in after-hours trading after it announced that it had closed a $20 million contract with the U.S. Department of Defense, the largest deal in the company's history.

National Oilwell Varco (NOV -1.33%) was rated a new 'Buy' at Stifel with a price target of $54.

Krystal Biotech (KRYS +4.99%) was rated a new 'Overweight' at Cantor Fitzgerald with a price target of $28.

Limoneira (LMNR +2.78%) slumped 16% in after-hours trading after it cut its outlook for fiscal 2018 Ebitda to $22.5 million to $23.5 million from a prior view of $$23 million to $25 million.

U.S. Silica (SLCA -1.49%) was rated a new 'Buy' at Stifel with a price target of $26.

NN Inc (NNBR -0.50%) slid almost 4% in after-hours trading after it announced that it is commencing an underwritten public offering of 12.5 million shares of its common stock.

Halliburton (HAL -0.30%) was rated a new 'Buy' at Stifel with a price target of $45.

Sonos (SONO +13.28%) tumbled nearly 14% in pre-market trading after it forecast full-year adjusted Ebitda of between $59 million and $62 million, the midpoint below consensus of $61.4 million.

Endocyte (ECYT +11.38%) fell more than 4% in after-hours trading when it announced that it intends to offer and sell $175 million of its common stock in an underwritten public offering.

Avid Bioservices (CDMO +0.70%) jumped 10% in after-hours trading after it reported a Q1 loss per share of -6 cents, narrower than consensus of -9 cents.

Pacific Biosciences of California (PACB +1.95%) dropped 8% in after-hours trading when it announced that it intends to offer and sell shares of its common stock in an underwritten public offering.