OVERNIGHT MARKETS AND NEWS

Mar E-mini S&Ps (ESH18 +0.45%) this morning are up +0.40% ahead of this morning's U.S. economic data on Jan consumer prices and Jan retail sales. European stocks are up +0.68% on signs of economic strength in Europe after Eurozone Dec industrial production rose more than expected and Eurozone Q4 GDP came in right on expectations. On the negative side, energy stocks are under pressure with Mar WTI crude oil (CLH18 -0.63%) down -0.66% after API data late Tuesday showed U.S. crude inventories rose +3.95 million bbl last week. Asian stocks settled mixed: Japan -0.95%, Hong Kong +2.27%, China +0.45%, Taiwan closed for holiday, Australia -0.25%, Singapore -0.36%, South Korea +1.14%, India -0.42%. Chinese stocks settled higher ahead of the week-long Lunar New Year holiday that begins tomorrow while Japan's Nikkei Stock index dropped to a 4-month low on weaker-than-expected Japan Q4 GDP and as USD/JPY tumbled to a 1-1/4 year low, which reduces the earnings prospects for Japanese exporters.

The dollar index (DXY00 +0.02%) is up +0.04%. EUR/USD (^EURUSD) is down -0.10%. USD/JPY (^USDJPY) is down -0.41% at a 1-1/4 year low.

Mar 10-year T-note prices (ZNH18 +0.04%) are little changed, up +0.5 of a tick.

Eurozone Dec industrial production rose +0.4% m/m and +5.2% y/y, stronger than expectations of +0.1% m/m and +4.2% y/y with the +5.2% y/y gain the largest year-on-year increase in 6-1/3 years.

Eurozone Q4 GDP was left unrevised at +0.6% q/q and +2.7% y/y.

Japan Q4 GDP rose +0.5% (q/q annualized), weaker than expectations of +1.0% (q/q annualized) and the slowest pace of growth in 2-years. The Q4 GDP deflator was unch y/y, right on expectations. Q4 private consumption rose +0.5% q/q, stronger than expectations of +0.4% q/q, and Q4 business spending rose +0.7% q/q, weaker than expectations of +1.1% q/q.

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) weekly MBA mortgage applications (previous +0.7% with purchase sub-index unch and refi sub-index +0.9%), (2) Jan CPI (expected +0.3% m/m and +1.9% y/y, Dec +0.1% m/m and +2.1% y/y) and Jan CPI ex food & energy (expected +0.2% m/m and +1.7% y/y, Dec +0.3% m/m and +1.8% y/y), (3) Jan retail sales (expected +0.2% and +0.5% ex autos, Dec +0.4% and +0.4% ex autos), (4) Dec business inventories (expected +0.3%, Nov +0.4%), (5) EIA weekly Petroleum Status Report.

Notable S&P 500 earnings reports today include: TripAdvisor (consensus $0.14), Marathon Oil (0.02), Williams Cos (0.21), Hilton (0.45), Agilent (0.58), Interpublic Group (0.77), NetApp (0.91), Applied Materials (0.98), Marriott (1.00), Dr Pepper Snapple (1.16), Wyndham (1.35).

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

Equity conferences this week: Credit Suisse Energy Summit on Mon-Wed, Credit Suisse Financial Services Forum on Tue-Wed, Goldman Sachs Technology and Internet Conference on Tue-Thu, ACI European Biopolymer Summit on Wed, Capital Link Cyprus Shipping Forum on Wed, Bank of America Merrill Lynch Insurance Conference on Wed-Thu, LEERINK Partners Global Healthcare Conference on Wed-Thu.

OVERNIGHT U.S. STOCK MOVERS

Northrup Grumman (NOC +1.75%) was upgraded to 'Buy' from 'Hold' at Jeffries.

Baidu (BIDU +1.79%) rose nearly 5% in after-hours trading after it reported Q4 adjusted Ebitda of $1.05 billion, above consensus of $991.7 million, and said Q4 adjusted profit per ads was $2.29, better than consensus of $2.12.

Avis Budget Group (CAR -1.59%) was downgraded to 'Sell' from 'Neutral' at Goldman Sachs with a price target of $33.

Diamondback Energy (FANG -0.84%) climbed 5% in after-hours trading after it reported Q4 adjusted EPS of $1.56. higher than consensus of $1.51, and then initiated a 50-cent cash dividend starting in Q1 of 2018.

Neuocrine Biosciences (NBIX +1.85%) fell over 5% in after-hours trading after it reported Q4 EPS of 7 cents, well below consensus of 24 cents.

Global Blood Therapeutics (GBT +0.67%) was rated a new 'Buy' at Janney Montgomery Scott LLC with a 12-month target price of $75.

Century Communities (CCS +1.21%) jumped almost 6% in after-hours trading after it reported Q4 adjusted EPS of $1.01, well above consensus of 61 cents.

Antero Resources (AR -0.34%) moved up over 3% in after-hours trading after it reported Q4 adjusted EPS of 23 cents, better than consensus of 18 cents.

Twillo (TWLO +2.52%) rallied almost 7% in after-hours trading after it reported Q4 revenue of $115.2 million, above consensus of $103.6 million, and then said it sees Q1 revenue of $115 million to $117 million, higher than consensus of $108.3 million.

MaxLinear (MXL +1.11%) slid 2% in after-hours trading after it reported Q4 net revenue of $113.7 million, below consensus of $114.0 million, and said it sees Q1 revenue of $110 million to $114 million, weaker than consensus of $116.7 million.

Carbonite (CARB +2.60%) rallied over 7% in after-hours trading after it said its sees full-year 2018 EPS of $11.45 to $1.55, stronger than consensus of $1.01.

Western Union (WU -0.10%) rose 3% in after-hours trading after it reported Q4 revenue of $1.44 billion, better than consensus of $1.40 billion.

Pieris Pharmaceuticals (PIRS +6.42%) dropped almost 9% in after-hours trading after it offered 5.5 million shares of common stock in an underwritten public offering.

Fossil Group (FOSL +7.75%) soared nearly 60% in after-hours trading after it reported an unexpected +2% increase in Q4 comparable sales, much better than consensus for a -6% decline.

Zion Oil & Gas (ZN +86.96%) gained over 2% in after-hours trading after it soared 87% in Tuesday's trading after finding "clear evidence" of oil and gas in the deeper portion of the Megiddo-Jezreel well.

Tetraphase Pharmaceuticals (TTPH -0.55%) plunged over 50% in after-hours trading after it said a Phase 3 trial of its Eravacycline did not achieve co-primary endpoints in patients with complicated urinary tract infections. Rival drugmaker Achaogen (AKAO +1.20%) rose almost 4% in after-hours trading on the news.

MARKET COMMENTS

Mar S&P 500 E-mini stock futures (ESH18 +0.45%) this morning are up +10.75 points (+0.40%). Tuesday's closes: S&P 500 +1.39%, Dow Jones +1.70%, Nasdaq +1.73%. The S&P 500 on Tuesday closed higher on upbeat comments from Cleveland Fed President Mester who said, "I expect the economy will work through this episode of market turbulence and in my view, the underlying fundamentals supporting the economy are very sound." Stocks were also supported by reduced interest rate concerns after the 10-year T-note yield declined. Stocks were undercut by heightened trade concerns after President Trump said tariffs are an option on foreign steel and aluminum producers.

Mar 10-year T-note prices (ZNH18 +0.04%) this morning are up +0.5 of a tick. Tuesday's closes: TYH8 +3.50, FVH8 +0.75. Mar 10-year T-notes on Tuesday closed higher on carry-over support from a rally in German bunds to a 4-session high and on some short-covering ahead of Wednesday's U.S. inflation data on Jan consumer prices. T-note prices were undercut by hawkish comments from Cleveland Fed President Mester who said she sees U.S. tax cuts adding to growth and that further rate hikes are needed this year and next.

The dollar index (DXY00 +0.02%) this morning is up +0.035 (+0.04%). EUR/USD (^EURUSD) is down -0.0012 (-0.10%) and USD/JPY (^USDJPY) is down -0.44 (-0.41%) at a 1-1/4 year low. Tuesday's closes: Dollar Index -0.505 (-0.56%), EUR/USD +0.0060 (+0.49%), USD/JPY -0.84 (-0.77%). The dollar index on Tuesday closed lower on concern the Trump administration's budget plans will expand the U.S. budget and current account deficits. The dollar was also undercut by the decline in T-note yields, which undercut the dollar's interest rate differentials.

Mar crude oil (CLH18 -0.63%) this morning is down -39 cents (-0.66%) and Mar gasoline (RBH18 -0.80%) is -0.0153(-0.91%). Tuesday's closes: Mar WTI crude -0.10 (-0.17%), Mar gasoline +0.0068 (+0.41%). Mar crude oil and gasoline on Tuesday settled mixed. Crude oil prices were undercut by the warning from the IEA that ramped up U.S. shale-oil production threatens to swamp global markets with crude supplies along with its prediction that the U.S. may unseat Russia later this year as the world's top crude producer. Crude oil prices were also undercut by expectations for Wednesday's EIA crude inventories to climb +3.0 million bbl. Crude oil prices found support from the weaker dollar.

Metals prices this morning are mixed with Apr gold (GCJ18 +0.23%) +2.2 (+0.17%) at a 1-week high, Mar silver (SIH18+0.28%) +0.022 (+0.13%), and Mar copper (HGH18 +0.08%) is -0.005 (-0.16%). Tuesday's closes: Apr gold +4.0 (+0.30%), Mar silver -0.042 (-0.25%), Mar copper +0.0760 (+2.46%). Metals on Tuesday settled mixed. Metals prices were boosted by a weaker dollar and by short-covering ahead of U.S. inflation data Wednesday on Jan consumer prices. Metals prices were undercut by a hawkish comment from Cleveland Fed President Mester that further Fed rate hikes are needed this year and next.