Overnight Markets And News
Jun E-mini S&Ps (ESM18 +0.09%) this morning are down -0.02% in light trading with Europe and most of Asia closed for the May Day holiday. Weaker-than-expected data on UK manufacturing data and a stronger dollar undercut metals prices and commodity producing stocks. The UK Apr Markit manufacturing PMI fell -1.0 to a 17-month low of 53.9 while the dollar index rose to a 3-1/2 month high. The U.S. late Monday said it would delay until June 1 import tariffs of 25% on steel and 10% on aluminum for the EU, Mexico and Canada. Treasury Secretary Mnuchin leads a team of cabinet members to China this week to try to resolve trade issues. Asian stocks settled higher: Japan +0.18%, Australia +0.54%, India +0.56%. Hong Kong, China Taiwan Singapore and South Korea all closed for holiday. Japan's Nikkei Stock Index rallied to a 2-3/4 month high on stronger-than-expected economic data on Apr car sales and Apr Nikkei manufacturing PMI. Japanese exporters also gained on weakness in the yen which boosts their earnings prospects after USD/JPY climbed to a 2-3/4 month high.
The dollar index (DXY00 +0.43%) is up +0.41% at a 3-1/2 month high on speculation the Fed could signal a more hawkish policy at the end of its 2-day policy meeting on Wednesday. EUR/USD (^EURUSD -0.41%) is down -0.39% at a 3-1/2 month low after a fall in the German 10-year bund yield to a 1-week low undercut the euro's interest rate differentials. USD/JPY (^USDJPY +0.30%) is up +0.28% at a 2-3/4 month high.
Jun 10-year T-note prices (ZNM18 -0-035) are down -2.5 ticks.
The UK Apr Markit manufacturing PMI fell -1.0 to a 17-month low of 53.9, weaker than expectations of -0.3 to 54.8.
UK Mar net consumer credit rose +0.3 billion pounds, weaker than expectations of +1.4 billion pounds and the smallest increase in 5-1/3 years.
The Japan Apr Nikkei manufacturing PMI was revised upward to 53.8 from the previously reported 53.3.
Japan Apr vehicle sales rose +0.5% y/y, the first increase in 7 months.
U.S. Stock Preview
Key U.S. news today includes: (1) revised Apr Markit manufacturing PMI expected unrevised at 56.5 (prelim-Apr +0.9 to 56.5), (2) Mar construction spending (expected +0.5% m/m, Feb +0.1% m/m), (3) Apr ISM manufacturing index (expected -0.9 to 58.4, Mar -1.5 to 59.3), (4) FOMC begins 2-day policy meeting, (5) Apr total vehicle sales (expected 17.10 million, Mar 17.40 million) and Apr domestic vehicle sales (expected 13.40 million, Mar 13.42 million).
Notable S&P 500 earnings reports today include: Apple (consensus $2.65), Aetna (2.97), Cummins (2.93), Allstate (2.60), HCA Healthcare (2.08), L3 Technologies (1.99), Seagate (1.33), Unum (1.25), Eaton (1.06), Merck (1.00), Edison Intl (0.91), Pfizer (0.75), Johnson Controls (0.52), ADM (0.49), Under Armour (-0.06).
U.S. IPO's scheduled to price today: PermRock Royalty Trust (PRT).
Equity conferences this week: Morgan Stanley Technology, Media & Telecom Conference on Tue.
Market Comments
June S&P 500 E-minis (ESM18 +0.09%) this morning are down -0.50 points (-0.02%). Monday's closes: S&P 500 -0.82%, Dow Jones -0.61%, Nasdaq -0.76%. The S&P 500 on Monday closed lower on weaker-than-expected U.S. economic data that included the +0.3% increase in U.S. Mar personal income (slightly weaker than expectations of +0.4%), the +0.4% increase in U.S. Mar pending home sales (weaker than expectations of +0.7% m/m), and the +0.2 point gain the Apr Chicago PMI (weaker than expectations of +0.6 to 58.0). Stocks found support on increased M&A activity after Marathon Petroleum confirmed it will buy Andeavor for $23.3 billion and after T-Mobile agreed to purchase Sprint for $26.5 billion.
June 10-year T-notes (ZNM18 -0-035) this morning are down -2.5 ticks. Monday's closes: TYM8 +4.00, FVM8 +2.00. Jun 10-year T-notes on Monday rose to a 1-week high on carry-over support from a rally in German bunds to a 1-week high after German Apr CPI rose less than expected. T-notes also found support on the weaker-than-expected Mar U.S. pending home sales and Apr Chicago PMI reports.
The dollar index (DXY00 +0.43%) this morning is up +0.373 (+0.41%) at a 3-1/2 month high. EUR/USD (^EURUSD-0.41%) is down -0.0047 (-0.39%) at a 3-1/2 month low. USD/JPY (^USDJPY +0.30%) is up +0.31 (+0.28%) at a 2-3/4 month high. Monday's closes: Dollar Index +0.299 (=0.33%), EUR/USD -0.0052 (-0.43%), USD/JPY +0.29 (+0.27%). The dollar index on Monday closed higher on the +1.9% increase in the U.S. core PCE deflator, the largest increase in 14 months, which was hawkish for Fed policy. There was also weakness in EUR/USD after the German Apr CPI rose less than expected, which was dovish for ECB policy.
Metals prices this morning are weaker with Jun gold (GCM18 -0.75%) -10.1 (-0.77%) at a 1-1/2 month low, Jul silver (SIN18 -0.65%) -0.131 (-0.80%), and Jul copper (HGN18 unch) -0.015 (-0.47%) at a 3-week low. Monday's closes: Jun gold -4.20 (-0.32%), Jul silver -0.096 (-0.58%), Jul copper +0.0045 (+0.15%). Metals on Monday settled mixed with Jun gold and Jul silver at 6-week lows. Metals prices were undercut by a stronger dollar and by an easing of geopolitical risks which reduces the safe-haven demand for precious metals after North Korea offered to denuclearize. Copper found support on the stronger-than-expected China Apr manufacturing PMI report, which was positive for copper demand.
Jun WTI crude oil prices (CLM18 -0.86%) this morning are down -62 cents (-0.90%) and Jun gasoline (RBM18-0.97%) is -0.0220 (-1.03%). Monday's closes: Jun crude +0.47 (+0.69%), Jun gasoline +0.0029 (+0.14%). Jun crude oil and gasoline on Monday closed higher on comments from Israeli Prime Minister Netanyahu who said Iran had a secret plan to build nuclear weapons, which may encourage President Trump to abandon the Iranian nuclear deal by May 12 and reinstate sanctions on Iran. Crude oil prices were undercut by a stronger dollar and by negative carry-over from Friday's data from Baker Hughes that showed active U.S. oil rigs rose by 5 rigs to a 3-year high of 825 rigs.
Overnight U.S. Stock Movers
Regeneron (REGN -2.99%) was downgraded to 'Neutral' from 'Buy' at Guggenheim Securities.
Apple (AAPL +1.81%) was rated a new 'Buy' at D.A. Davidson with a price target of $220.
Lockheed Martin (LMT -0.37%) was awarded a $1.4 billion contract from the U.S. Department of Defense for F-35 logistics services.
Akamai Technologies (AKAM +0.77%) gained more than 4% in after-hours trading after it said it sees Q2 revenue of $658 million to $670 million, higher than consensus of $656.8 million, and forecast full year revenue of $2.69 billion to $2.72 billion, the midpoint above consensus of $2.70 billion.
Inogen (INGN -1.77%) jumped nearly 19% in after-hours trading after it reported Q1 revenue of $79.1 million, above consensus of $62.9 million, and forecast full-year revenue of $310 million to $320 million, higher than consensus of $304.4 million.
Allison Transmission Holdings (ALSN -0.38%) rose 4% in after-hours trading after it reported Q1 net sales of $663 million, well above consensus of $574.8 million.
Tenet Healthcare (THC -1.36%) climbed almost 5% in after-hours trading after it said it sees full-year adjusted EPS of $1.36 to $1.70, well above consensus of 92 cents.
Cognex (CGNX +0.09%) tumbled nearly 16% in after-hours trading after it forecast Q2 revenue of $200 million to $210 million, below consensus of $216.2 million.
Electronics for Imaging (EFII -3.65%) rose 9% in after-hours trading after it reported Q1 revenue of $239.9 million, above consensus of $236.7 million.
Nutrisystem (NTRI +1.58%) rallied almost 10% in after-hours trading after it reported Q1 revenue of $210.9 million, better than consensus of $207 million, and forecast full-year revenue of $693 million to $708 million, the midpoint above consensus of $697.5 million.
Integrated Device Technology (IDTI -3.54%) climbed nearly 4% in after-hours trading after it reported Q4 adjusted EPS of 46 cents, better than consensus of 44 cents.
Karyopharm Therapeutics (KPTI -13.66%) surged over 20% in after-hours trading after it said it results from a study of its Selinexor drug to treat myeloma showed "great potency" with two complete remissions and it plans to move the drug into an earlier treatment course.
Transocean Ltd (RIG -0.40%) slid 2% in after-hours trading after it reported a Q1 adjusted loss per share of -48 cents, wider than consensus of -37 cents.
MagnaChip Semiconductor (MX unch) rallied 7% in after-hours trading after it reported Q1 revenue of $165.8 million, better than consensus of $161 million, and forecast Q2 revenue of $182 million to $188 million, stronger than consensus of $176 million.