Morning Call: Strength in mining stocks and metal producers lifts the overall market; Jun E-mini S&Ps up +0.12% at a 2-3/4 month high; Jul COMEX copper up +0.49% at a 5-1/4 month nearest-futures high.
Barchart.com - Thu Jun 07, 6:37AM CDT
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Overnight Markets and News

Jun E-mini S&Ps (ESM18 +0.12%) this morning are up +0.12% at a 2-3/4 month high and European stocks are up +0.33%. Strength in mining stocks and metal producers are leading the overall market higher as Jul COMEX copper (HGN18 +0.37%) climbs +0.49% to a 5-1/4 month nearest-futures high. Supply concerns are fueling gains in copper due to rising labor tensions at Chile's Escondida copper mine, the world's biggest, as workers there may strike if ongoing contract negotiations falter. Gains in European stocks were limited on economic concerns after German Apr factory orders unexpectedly declined for a fourth month. Also, a rally in EUR/USD to a 3-week high undercut European exporter stocks. EUR/USD gained, and the 10-year German bund yield rose to a 2-week high of 0.517% after hawkish comments Wednesday from ECB members bolstered the outlook for the ECB to announce an end to its QE program at next Thursday's policy meeting. Asian stocks settled mostly higher: Japan +0.87%, Hong Kong +0.81%, China -0.18%, Taiwan +0.45%, Australia +0.53%, Singapore +0.15%, South Korea +0.60%, India +0.81%. Chinese stocks closed lower due to ongoing trade tensions with the U.S., while Japan's Nikkei Stock Index climbed to a 2-week high as Wednesday's rally in USD/JPY to a 2-week high boosted Japanese exporter stocks.

The dollar index (DXY00 -0.31%) is down -0.34% to a 3-week low. EUR/USD (^EURUSD +0.34%) is up +0.49% at a 3-week high. USD/JPY (^USDJPY -0.08%) is down -0.19%.

Sep 10-year T-note prices (ZNU18 -0-020) are down -2.5 ticks at a 1-1/2 week low on negative carry-over from a slide in German bunds to a 2-week low.

UK May Halifax house prices rose +1.5% m/m, stronger than expectations of +1.0% m/m.

German Apr factory orders unexpectedly fell -2.5% m/m, weaker than expectations of +0.8% m/m and the fourth consecutive month that factory orders have declined.

The Japan Apr leading index CI rose +1.1 to 105.6, right on expectations, The Apr coincident index rose +1.7 to 117.7, slightly weaker than expectations of +1.5 to 117.8.

U.S. Stock Preview

Key U.S. news today includes: (1) weekly initial unemployment claims (expected unch at 221,000, previous -13,000 to 221,000) and continuing claims (expected +12,000 to 1.738 million, previous -16,000 to 1.726 million), (2) USDA weekly Export Sales, (3) Apr consumer credit (expected +$14.0 billion, Mar +$11.622 billion).

Notable Russell 1000 earnings reports today include: Vail Resorts (consensus $6.12), JM Smucker (2.18), Broadcom (4.68), Cooper Cos (2.84).

U.S. IPO's scheduled to price today: MeiraGTx Holdings (MGTX).

Equity conferences this week: Bank of America Merrill Lynch Global Technology, Media & Telecom Conference on Tue-Thu, Robert W. Baird & Co. Global Consumer, Technology & Services Conference on Tue-Thu, NAREIT REITWeek Investor Conference on Tue-Thu, Apple Worldwide Developers Conference on Tue-Fri, Deutsche Bank Global Industrials & Materials Summit on Wed-Thu, Sandler O'Neill Global Exchange and Brokerage Conference on Wed-Thu, Baird Global Consumer, Technology & Services Conference on Thu, Gabelli Movie & Entertainment Conference on Thu, Piper Jaffray Consumer Marketplace Conference on Thu.

Market Comments

June S&P 500 E-minis (ESM18 +0.12%) this morning are up +3.25 points (+0.12%) at a 2-3/4 month high. Wednesday's closes: S&P 500 +0.86%, Dow Jones +1.40%, Nasdaq +0.60%. The S&P 500 on Wednesday climbed to a fresh 2-1/2 month high and closed higher on reduced US-China trade tensions after China offered to buy more U.S. products and the Trump administration said it is finalizing a deal that will allow China's ZTE Corp to resume purchases from its American suppliers. Stocks were also supported by news that the U.S. Apr trade deficit shrank to -$46.2 billion, narrower than expectations of -$49.0 billion and the narrowest deficit in 7 months, which was positive for Q2 GDP.

Sep 10-year T-notes (ZNU18 -0-020) this morning are down -2.5 ticks at a new 1-1/2 week low. Wednesday's closes: TYU8 -13.50, FVU8 -7.75. Sep 10-year T-notes on Wednesday fell to a 1-1/2 week low and closed lower on the rally in the S&P 500 to a new 2-1/2 month high, which curbs the safe-haven demand for T-notes. T-notes were also undercut by negative carry-over from a slide in German bunds to a 1-week low on hawkish ECB commentary that suggests the ECB may signal an end to its QE program at next Thursday's policy meeting.

The dollar index (DXY00 -0.31%) this morning is down -0.319 (-0.34%) at a 3-week low. EUR/USD (^EURUSD +0.34%) is up +0.0058 (+0.49%) at a 3-week high. USD/JPY (^USDJPY -0.08%) is down -0.21 (-0.19%). Wednesday's closes: Dollar Index -0.238 (-0.25%), EUR/USD +0.0056 (+0.48%), USD/JPY +0.39 (+0.36%). The dollar index on Wednesday fell to a 2-week low and closed lower on the weaker-than-expected U.S. Q1 non-farm productivity report. There was also strength in EUR/USD which climbed to a 2-week high on hawkish comments from ECB Governing Council member Knot who said, "it's reasonable to announce the end of the net asset purchases soon," and from ECB Chief Economist Praet who said, "it's clear that next week the Governing Council will have to make the assessment on whether to end QE."

Metals prices this morning are higher with Aug gold (GCQ18 +0.12%) +1.0 (+0.08%), Jul silver (SIN18 +0.49%) +0.061 (+0.37%) at a 6-week nearest-futures high and Jul copper (HGN18 +0.37%) is up +0.016 (+0.49%) at a 5-1/4 month nearest-futures high. Wednesday's closes: Aug gold -0.80 (-0.06%), Jul silver +0.151 (+0.91%), Jul copper +0.0635 (+1.99%). Metals on Wednesday settled mixed with Jul silver at a 3-week high and Jul copper at a 3-1/4 month highs. Metals prices were boosted by the decline in the dollar index to a 2-week low and by fund buying of copper on concern that labor unrest may lead to a strike that curbs copper production at Chile's copper mine at Escondida, the world's biggest. The rally in stocks curbed the safe-haven demand for precious metals.

Jul WTI crude oil prices (CLN18 +1.07%) this morning are p +0.58 cents (+0.90%) and Jul gasoline (RBN18 +1.46%) is +0.0242 (+1.17%). Wednesday's closes: Jul crude -0.79 (-1.21%), Jul gasoline -0.0362 (-1.72%). Jul crude oil and gasoline on Wednesday closed lower with Jul gasoline at a 1-month low. Crude oil prices were undercut by the unexpected +2.07 million bbl increase in EIA crude inventories (more than expectations of -2.0 million bbl), the +4.6 million bbl increase in EIA gasoline supplies (more than expectations of +500,000 bbl), and by the +0.3% increase in U.S crude production the week of Jun 1 to a record high 10.8 million bpd.

Overnight U.S. Stock Movers

Darden Restaurants (DRI +1.85%) was upgraded to 'Buy' from 'Hold' at SunTrust Robinson Humphrey with a price target of $110.

Wingstop (WING +0.95%) was upgraded to 'Outperform' from 'Neutral' at Wedbush with a price target of $59.

Five Below (FIVE +3.07%) rallied 10% in after-hours trading after it reported Q1 EPS of 39 cents, better than consensus of 32 cents, and then forecast full-year EPS of $2.42 to $2.48, well above consensus of $1.80.

Thor Industries (THO +2.70%) fell 5% in after-hours trading after it reported Q3 EPS of $2.53, below consensus of $2.58.

United Natural Foods (UNFI -1.39%) gained nearly 3% in after-hour trading after it reported Q3 revenue of $2.65 billion, above consensus of $2.58 billion, and then forecast full-year revenue of $10.23 billion to $10.28 billion, stronger than consensus of $10.10 billion.

Okta (OKTA -0.81%) moved up by 3% in after-hours trading after it reported Q1 revenue of $83.6 million, higher than consensus of $78.8 million, and then forecast full-year revenue of $353 to $357 million, better than consensus of $347.1 million.

Comtech Telecommunications (CMTL -2.15%) rose 4% in after-hours trading after it reported Q3 net sales of $147.9 million, above consensus of $145.6 million, and forecast full-year adjusted Ebitda of $73.5 million to $76.5 million, better than consensus of $73.3 million.

ABM Industries (ABM +1.01%) climbed almost 3% in after-hours trading after it reported Q2 revenue of $1.58 billion, higher than consensus of $1.54 billion.

First Solar (FSLR -4.65%) was downgraded to 'Sell' from 'Neutral' at Goldman Sachs with a price target of $48.

Zscaler (ZS +1.73%) rallied 13% in after-hours trading after it reported Q3 revenue of $49.2 million, stronger than consensus of $46.1 million, and then forecast full-year revenue of $184 million to $185 million, better than consensus of $179.9 million.

Turtle Beach (HEAR +6.27%) ga1ned more than 1% in after-hours trading after it signed an Esports partnership with Allegiance Gaming.

Cloudera (CLDR +0.47%) slid 4% in after-hours trading after it forecast full-year revenue of $435 million to $445 million, the midpoint below consensus of $440.9 million.

Essendant (ESND -0.49%) tumbled nearly 8% in after-hours trading after it received a second request from the FTC regarding its merger with the S.P. Richards business held by Genuine Parts, which extends the waiting period for the merger until 30 days after Essendant and Genuine Parts have complied with the request.

American Superconductor (AMSC +0.86%) dropped more than 11% in after-hours trading after it reported Q4 revenue of $13.5 million, below consensus of $14.5 million, and forecast Q1 revenue of $11 million to $13 million, weaker than consensus of $16.3 million.

Proteostasis Therapeutics (PTI +1.45%) plunged more than 35% in after-hours trading after Phase I data for its PTI-801 drug for treatment of cystic fibrosis failed to show statistically significant changes in forced expiratory volume.