Overnight Markets And News

Jun E-mini S&Ps (ESM18 +0.43%) this morning are up +0.43% at a 2-week high and European stocks are up +0.16% at a 3-month high. A rally in energy stocks is boosting the overall market with a +2.58% surge in Jun WTI crude oil(CLM18 +2.85%) to a 3-1/2 year high. Crude oil has moved sharply higher since President Trump yesterday said the U.S. is withdrawing from the Iran nuclear deal and re-imposing sanctions on Iran and that buyers of Iranian crude have six months to curb their purchases or face stiff penalties. Crude oil also moved higher after API data late Tuesday showed U.S. crude inventories fell -1.85 million bbl last week. The rally in stocks pushed the 10-year T-note yield up over 3.00% to a 1-week high. Asian stocks settled mixed: Japan -0.44%, Hong Kong +0.44%, China -0.07%, Taiwan +0.11%, Australia +0.26%, Singapore +0.15%, South Korea -0.46%, India +0.29%.

The dollar index (DXY00 -0.10%) is down -0.10%. EUR/USD (^EURUSD +0.16%) is up +0.11%. USD/JPY (^USDJPY+0.50%) is up +0.52%.

Jun 10-year T-note prices (ZNM18 -0-065) are down -8.5 ticks at a 1-week low ahead of the Treasury's auction of $25 billion in 10-year T-notes.

France Mar industrial production unexpectedly fell -0.4% m/m, weaker than expectations of +0.4% m/m. Mar manufacturing production rose +0.1% m/m, weaker than expectations of +0.9% m/m.

UK Apr BRC sales like-for-like fell -4.2% y/y, weaker than expectations of -0.8% y/y and the biggest decline in 13 years.

Japan Mar labor cash earnings rose +2.1% y/y, stronger than expectations of +1.0% y/y and the largest increase in 14-3/4 years. Mar real cash earnings rose +0.8% y/y, stronger than expectations of -0.5% y/y and the biggest increase in 1-1/2 years.

U.S. Stock Preview

Key U.S. news today includes: (1) weekly MBA mortgage applications (previous -2.5% to 388.6 with purchase sub-index -1.6% to 258.1 and refi sub-index -3.5% to 1104.9), (2) Apr PPI final demand (expected +0.2% m/m and +2.8% y/y, Mar +0.3% m/m and +3.0% y/y) and Apr PPI ex food & energy (expected +0.2% m/m and +2.4% y/y, Mar +0.3% m/m and +2.7% y/y), (3) revised Mar wholesale inventories (expected unrevised at +0.5%) and Mar wholesale trade sales (Feb +1.0% m/m), (4) EIA weekly Petroleum Status Report, (5) Treasury auctions $25 billion of 10-year T-notes, (6) Atlanta Fed President Raphael Bostic (voter) speaks on the economic outlook and monetary policy to the World Affairs Council.

Notable S&P 500 earnings reports today include: Ameren (consensus $0.58), Mylan (0.96), Coty (0.12), 21st Century Fox (0.53), Albemarle (1.21), TechnipFMC (0.34), CenturyLink (0.19), Booking Holding (10.70).

U.S. IPO's scheduled to price today: AXA Equitable Holdings (EQH).

Equity conferences this week: Jefferies Global Technology Conference on Wed-Thu, Goldman Sachs Leveraged Finance Conference on Thu, Macquarie Business Services C-Suite Conference on Thu, UBS Utility & MLP Conference on Thu.

Market Comments

June S&P 500 E-minis (ESM18 +0.43%) this morning are up +11.50 points (+0.43%) at a 2-week high. Tuesday's closes: S&P 500 -0.03%, Dow Jones +0.01%, Nasdaq -0.09%. The S&P 500 on Tuesday closed slightly lower on increased geopolitical risks after President Trump scrapped the nuclear deal with Iran and reimposed sanctions on the country. Energy stocks were undercut by the -2.36% slump in crude oil prices. Stocks were supported by news that Mar JOLTS job openings rose sharply by +472,000 to a record 6.55 million, stronger than expectations of +48,000. In addition, there were signs of strength in China's economy, which bolsters the outlook for the global economy, after China Apr exports rose +12.9% y/y, stronger than expectations of +8.0% y/y, and Apr imports rose +21.5% y/y, stronger than expectations of +16.0% y/y.

June 10-year T-notes (ZNM18 -0-065) this morning are down -8.5 ticks at a 1-week low. Tuesday's closes: TYM8 -5.50, FVM8 -3.50. Jun 10-year T-notes on Tuesday closed lower on the larger-than-expected increase in U.S. Mar JOLTS job openings to a record high 6.55 million, which signals a tight labor market that bolsters the case for additional Fed rate hikes. T-note prices were also undercut by supply pressures amidst this week's Treasury refunding operation.

The dollar index (DXY00 -0.10%) this morning is down -0.091 (-0.10%). EUR/USD (^EURUSD +0.16%) is up +0.0013 (+0.11%). USD/JPY (^USDJPY +0.50%) is up +0.57 (+0.52%). Tuesday's closes: Dollar Index +0.371 (+0.40%), EUR/USD -0.0058 (-0.49%), USD/JPY +0.04 (+0.04%). The dollar index on Tuesday rose to a 4-1/4 month high and closed higher on the larger-than-expected increase in U.S. Mar JOLTS job openings to a record 6.55 million, which is hawkish for Fed policy. There was also weakness in EUR/USD which fell to a 4-1/4 month low on increased political risks in Italy after leaders of the Five Star Movement and the League rejected the idea of a non-partisan Italian prime minister and called for elections as soon as July.

Metals prices this morning are mixed with Jun gold (GCM18 -0.41%) -4.8 (-0.37%) at a 1-week low, Jul silver (SIN18-0.04%) -0.012 (-0.07%), and Jul copper (HGN18 +0.07%) +0.002 (+0.07%). Tuesday's closes: Jun gold -0.40 (-0.03%), Jul silver -0.023 (-0.14%), Jul copper -0.0200 (-0.65%). Metals on Tuesday closed lower with Jul copper at a 1-month low. Metals prices were undercut by the rally in the dollar index to a 4-1/4 month high. Copper prices were undercut by demand concerns after LME canceled copper warrants, a sign of demand to remove copper from LME warehouses, fell -6,925 MT to a 2-week low.

Jun WTI crude oil prices (CLM18 +2.85%) this morning are up sharply by +$1.78 a barrel (+2.58%) at a 3-1/2 year high and Jun gasoline (RBM18 +2.35%) is up +0.0446 (+2.11%) at an 8-1/4 month high. Tuesday's closes: Jun crude -1.57 (-2.36%), Jun gasoline -0.0226 (-1.06%). Jun crude oil and gasoline on Tuesday closed lower on the rally in the dollar index to a 4-1/4 month high, the EIA's hike in its U.S. 2018 crude output forecast to 10.72 million bpd from a 10.69 million bpd forecast in Apr, and expectations for Wednesday's weekly EIA crude inventories to increase by +1.0 million bbl. Crude oil prices received support from President Trump's exit from the Iran nuclear deal and the reimposition of sanctions on Iran, which will curb their crude exports and tighten global oil supplies.

Overnight U.S. Stock Movers

Fluor (FLR +0.40%) was upgraded to 'Buy' from 'Underperform' at Bank of America/Merrill Lynch with a price target of $58.

Walt Disney (DIS -0.67%) gained more than 1% in after-hours trading after it reported Q2 adjusted EPS of $1.84, better than consensus of $1.70.

Penumbra (PEN -2.30%) climbed 5% in after-hours trading after it reported Q1 revenue of $102.7 million, better than consensus of $91.8 million, and forecast full-year revenue of $410 million to $415 million, above consensus of $406.1 million.

TripAdvisor (TRIP -1.65%) rallied over 4% in after-hours trading after it reported Q1 adjusted EPS of 30 cents, well above consensus of 16 cents.

ServiceMaster Global Holdings (SERV -1.03%) was rated a new 'Buy' at Buckingham Research Group with a price target of $64.

Twilio (TWLO +0.59%) rose more than 4% in after-hours trading after it reported Q1 revenue of $129.1 million higher than consensus of $115.9 million, and then forecast full-year revenue of $538 million to $544 million, well above consensus of $511.5 million.

Papa John's (PZZA -0.66%) slid 4% in after-hours trading after it reported Q1 revenue of $427.4 million, weaker than consensus of $440.7 million.

Planet Fitness (PLNT -1.93%) fell 3% in after-hours trading after it reported Q1 adjusted EPS of 27 cents, right on expectations.

Electro Scientific Industries (ESIO -0.06%) climbed almost 5% in after-hours trading after it reported Q4 adjusted EPS of $1.02, better than consensus of 87 cents, and forecast Q1 adjusted EPS of 75 cents to 95 cents, the midpoint above consensus of 82 cents.

Zagg (ZAGG +1.77%) jumped 10% in after-hours trading after it forecast 2018 EPS of $1.30 to $1.50, the midpoint above consensus of $1.34.

Extreme Networks (EXTR +3.16%) plunged more than 20% in after-hours trading after it reported Q3 adjusted EPS of 16 cents, below consensus of 21 cents, and then forecast Q4 adjusted EPS of 16 cents to 23 cents, weaker than consensus of 29 cents.

Wendy's (WEN +2.61%) fell more than 6% in after-hours trading after it reported Q1 comparable sales rose +1.6%, below consensus of +1.8%.

Ring Energy (REI +2.20%) dropped nearly 7% in after-hours trading after it reported Q1 adjusted EPS of 11 cents, below consensus of 14 cents.

Ranger Energy Services (RNGR -2.22%) may open to the upside this morning after it reported Q1 revenue of $62.6 million, higher than consensus of $59.8 million.

SunPower (SPWR +0.59%) fell 3% in after-hours trading after it forecast Q2 adjusted gross margin of +6% to +8%, weaker than consensus of +8.53%.