OVERNIGHT MARKETS AND NEWS

Mar E-mini S&Ps (ESH18 +0.37%) this morning are up +0.31% and European stocks are up +0.05% ahead of the results of the 2-day FOMC meeting later this afternoon. President Trump's State of the Union address Tuesday night offered few clues on U.S. policy, although Mar COMEX copper prices (HGH18 +0.97%) are up +1.05% after he asked Congress to approve a $1.5 trillion infrastructure spending plan. Losses in energy stocks limited gains in the overall market with Mar WTI crude oil (CLH18 -0.79%) down -0.62% at a 1-week low after API data late Tuesday showed U.S. crude inventories rose +3.23 million bbl last week. European stocks found support on signs of slack inflation that may keep the ECB from ending stimulus after Eurozone Jan CPI rose +1.3% y/y, the slowest pace of increase in 6-months. Also, ECB Executive Board member Coeure said Eurozone inflation will converge "only very gradually" toward the ECB's goal, justifying the need to continue providing stimulus. Strength in Germany's economy, Europe's largest, also provided support to European stocks after the German Jan unemployment rate fell to a record low of 5.4%. Asian stocks settled mixed: Japan -0.83%, Hong Kong +0.86%, China -0.21%, Taiwan +0.24%, Australia +0.25%, Singapore -0.42%, South Korea -0.01%, India -0.19%. An unexpected decline in Chinese manufacturing activity undercut most Asian markets after the China Jan manufacturing PMI unexpectedly fell -0.3 to 51.3, the slowest pace of increase in 8-months.

The dollar index (DXY00 -0.25%) is down -0.30%. EUR/USD (^EURUSD) is up +0.45%. USD/JPY (^USDJPY) is down -0.02%.

Mar 10-year T-note prices (ZNH18 +0.13%) are up +4 ticks.

The China Jan manufacturing PMI unexpectedly fell -0.3 to 51.3, weaker than expectations of no change at 51.6 and the slowest pace of expansion in 8 months. The Jan non-manufacturing PMI unexpectedly rose +0.3 to 55.3, stronger than expectations of -0.1 to 54.9.

Eurozone Jan CPI rose +1.3% y/y, stronger than expectations of +1.2% y/y, but still the slowest pace of increase in 6-months. The Jan core CPI rose +1.0% y/y, right on expectations.

ECB Executive Board member Coeure said Eurozone inflation will converge "only very gradually" toward the ECB's goal, justifying the need to continue providing stimulus.

The German Jan unemployment change fell -25,000 to 2.415 million, stronger than expectations of -17,000. The Jan unemployment rate fell -0.1 to 5.4%, right on expectations and the lowest since German reunification in 1990.

German Dec retail sales fell -1.9% m/m, weaker than expectations of -0.4% m/m and the biggest monthly decline in 4-years.

Japan Dec industrial production rose +2.7% m/m, stronger than expectations of +1.5% m/m and the largest increase in 8-months.

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) weekly MBA mortgage applications (previous +4.5% with purchase sub-index +6.1% and refi sub-index +0.9%), (2) Jan ADP employment (expected +180,000, Dec +250,000), (3) Q4 employment cost index (expected +0.6%, Q3 +0.7%), (4) Jan Chicago PMI (expected -3.8 to 64.0, Dec +2.2 to 67.8), (5) Dec pending home sales (expected +0.5% m/m and +2.7% y/y, Nov +0.2% m/m and +0.6% y/y), (6) EIA weekly Petroleum Status Report, (7) FOMC announces interest rate decision (1.25%-1.50% fed funds target range expected unchanged).

Notable S&P 500 earnings reports today include: Facebook (consensus $1.95), Microsoft (0.86), Boeing (2.90), Avery Dennison (1.25), Unum (1.08), Eli Lilly (1.07), Nasdaq (1.01), Invesco (0.70), AT&T (0.65), eBay (0.58), Johnson Controls (0.53), PayPal (0.52), Symantec (0.44), Duke Realty (0.30).

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

Equity conferences this week: none.

OVERNIGHT U.S. STOCK MOVERS

Biogen (BIIB -1.64%) was upgraded to 'Buy' from 'Neutral' at UBS with a price target of $410.

Time Warner (TWX -0.05%) was upgraded to 'Buy' from 'Neutral' at MoffetNathanson.

Apple (AAPL -0.59%) is down almost 1% in pre-market trading after it was downgraded to 'Market Perform' from 'Outperform' at BMO Capital Markets.

Align Technology (ALGN -2.42%) rose nearly 4% in after-hours trading after it reported Q4 net revenue of $421.3 million, better than consensus of $396.1 million, and said it sees Q1 net revenue of $400 million to $410 million, above consensus of $396 million.

Electronic Arts (EA +0.89%) climbed almost 7% in after-hours trading after it reported Q3 adjusted EPS of $2.21, better than consensus of $2.20, and then raised guidance on full-year 2018 adjusted EPS to $4.25 from a prior view of $4.20, higher than consensus of $4.22.

Shutterfly (SFLY +0.64%) rallied 17% in after-hours trading after it said it sees full-year EPS of $1.94 to $2.38, well above consensus of $1.60.

Knight-Swift Transportation (KNX -2.93%) jumped 8% in after-hours trading after it reported Q4 adjusted EPS of 52 cents, stronger than consensus of 39 cents.

Juniper Networks (JNPR -0.56%) tumbled over 8% in after-hours trading after it said it sees Q1 adjusted EPS of 22 cents to 28 cents, well below consensus of 42 cents.

Super Micro Computer (SMCI +0.61%) dropped 6% in after-hours trading after CFO Howard Hideshima resigned effective immediately and will be replaced by Keven Bauer, previously SVP of corporate development and strategy.

Immersion (IMMR +7.40%) jumped 8% in after-hours trading after it announced it had signed a multi-year license agreement with Marquardt for its patented haptic technology for use in automotive solutions.

Advanced Micro Devices (AMD -3.38%) gained 2% in after-hours trading after it said Q1 revenue will be about $1.55 billion, which indicates growth of 31% from an adjusted total of $1.18 billion for the same period a year earlier, above consensus of 27% growth.

Syros Pharmaceuticals (SYRS -2.25%) fell nearly 5% in after-hours trading after it announced a proposed underwritten public offering of $40 million in shares of its common stock.

Bellicum Pharmaceuticals (BLCM -5.53%) plunged over 40% in after-hours trading after it received notice from the FDA that U.S. studies of its BPX-501 have been placed on a clinical hold after three cases of encephalopathy were deemed as possibly related to BPX-501.

Cerus (CERS  -2.46%) slid over 7% in after-hours trading after it announced a proposed underwritten public offering of $50 million in shares of its common stock.

MARKET COMMENTS

Mar S&P 500 E-mini stock futures (ESH18 +0.37%) this morning are up +8.75 points (+0.31%). Tuesday's closes: S&P 500 -1.09%, Dow Jones -1.37%, Nasdaq -0.82%. The S&P 500 on Tuesday tumbled to a 1-week low and closed lower on heightened interest rate concerns that sparked long liquidation in stocks after the 10-year T-note yield rose to a new 3-3/4 year high of 2.73%. There was also weakness in health-care stocks after Amazon.com, Berkshire Hathaway and JPMorgan Chase said they will collaborate on a new independent health-care company for their employees. Energy stocks slumped as crude oil prices dropped -1.62%. A bullish factor was the Conference Board's Jan U.S. consumer confidence that rose +2.3 to 125.4, stronger than expectations of +0.9 to 123.0.

Mar 10-year T-note prices (ZNH18 +0.13%) this morning are up +4 ticks. Tuesday's closes: TYH8 -5.50, FVH8 -1.25. Mar T-notes on Tuesday fell to a new contract low and the 10-year T-note yield rose to a 3-3/4 year high. T-note prices were undercut by stronger-than-expected U.S. economic data on Nov S&P CoreLogic composite-20 home prices and the Conference Board's Jan U.S. consumer confidence, which bolsters the outlook for tighter Fed policy. There was also concern the Treasury may announce on Wednesday in its quarterly refunding announcement that it intends to increase the sizes of the 10-year T-note and 30-year T-bond auctions. Losses were limited after a slide in stocks boosted safe-haven demand for T-notes.

The dollar index (DXY00 -0.25%) this morning is down -0.271 (-0.30%). EUR/USD (^EURUSD) is up +0.0056 (+0.45%) and USD/JPY (^USDJPY) is down -0.02 (-0.02%). Tuesday's closes: Dollar Index -0.148 (-0.17%), EUR/USD +0.0019 (+0.15%), USD/JPY -0.18 (-0.17%). The dollar index on Tuesday closed lower on the sell-off in stocks, which undercut USD/JPY as it boosted safe-haven demand for the yen. There was also long liquidation in the dollar ahead of President Trump's State of the Union address Tuesday night where he may ramp up protectionist rhetoric on U.S. trade policy.

Mar crude oil (CLH18 -0.79%) this morning is down -40 cents (-0.62%) at a 1-week low and Mar gasoline (RBH18 -0.97%) is -0.0150 (-0.80%) at a 2-week low. Tuesday's closes: Mar WTI crude -1.06 (-1.62%), Mar gasoline -0.0453 (-2.36%). Mar crude oil and gasoline on Tuesday closed lower with Mar gasoline at a 1-week low. Crude oil prices were undercut by expectations for Wednesday's EIA data to show U.S. crude inventories rose +1.0 million bbl, the first increase in eleven weeks.

Metals prices this morning are higher with Feb gold (GCG18 +0.50%) +6.8 (+0.51%), Mar silver (SIH18 +0.95%) +0.157 (+0.92%), and Mar copper (HGH18 +0.97%) +0.034 (+1.05%). Tuesday's closes: Feb gold -4.9 (-0.37%), Mar silver -0.069(-0.40%), Mar copper -0.005 (-0.16%). Metals on Tuesday settled mixed. Precious metals prices were undercut by stronger-than-expected U.S. economic data on Nov S&P CoreLogic composite-20 home prices and the Conference Board's Jan U.S. consumer confidence that bolstered the case for additional rate hikes. There was also concern that Chinese industrial metals demand will weaken with the upcoming week-long Lunar holiday next month.