Morning Call: U.S. and European stocks mixed ahead of the outcome of today's ECB meeting; Sep E-mini S&Ps up +0.02%; Jul WTI crude oil up +0.35% at a 1-1/2 week high. - Thu Jun 14, 6:39AM CDT
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 ESU18 - S&P 500 E-Mini

Overnight Markets and News

Sep E-mini S&Ps (ESU18 +0.04%) this morning are up +0.02% as strength in energy stocks leads the overall market higher with Jul WTI crude oil (CLN18 +0.47%) up +0.35% at a 1-1/2 week high. European stocks are down -0.39% on the prospects for the end of the ECB's QE program. The markets will look to today's ECB meeting for details on when they plan to end their asset-purchase program. Global stock markets remain under pressure after the Fed signaled four possible rate hikes this year after Wednesday's FOMC meeting and global growth concerns increased after China May industrial production and retail came in weaker-than-expected. Asian stocks settled lower: Japan -0.99%, Hong Kong -0.93%, China -0.18%, Taiwan -1.43%, Australia -0.11%, Singapore -1.05%, South Korea -1.78%, India -0.39%. China's Shanghai Composite fell to a 1-year low on concern trade woes will further weaken its economy that is already showing signs of slowing after May industrial output rose less than expected. The Trump administration plans to announce on Friday a final list of tariff targets of Chinese goods and President Trump said he will meet today with his trade team about whether to move forward with those tariffs.

The dollar index (DXY00 -0.41%) is down -0.25%. EUR/USD (^EURUSD +0.28%) is up +0.30%. USD/JPY (^USDJPY -0.31%) is down -0.31%.

Sep 10-year T-note prices (ZNU18 +0-070) are up +6.5 ticks.

UK May retail sales ex auto fuel rose +1.3% m/m, stronger than expectations of +0.3% m/m. May retail sales including auto fuel also rose +1.3% m/m, stronger than expectations of +0.5% m/m.

China May industrial production rose +6.8% y/y, weaker than expectations of +7.0% y/y.

China May retail sales rose +8.5% y/y, weaker than expectations of +9.6% y/y and the smallest increase in 14-3/4 years.

U.S. Stock Preview

Key U.S. news today includes: (1) weekly initial unemployment claims (expected +1,000 to 223,000, previous -1,000 to 222,000) and continuing claims (expected -7,000 to 1.734 million, previous +21,000 to 1.741 million), (2) May retail sales (expected +0.4% and +0.5% ex autos, Apr +0.3% and +0.3% ex autos), (3) May import price index (expected +0.5% m/m and +3.9% y/y, Apr +0.3% m/m and +3.3% y/y), (4) USDA weekly Export Sales, (5) Apr business inventories expected +0.3%, Mar unch.

Notable Russell 1000 earnings reports today include: Adobe (consensus $1.54), Jabil (0.44), Michaels Cos (0.38).

U.S. IPO's scheduled to price today: Puxin (NEW), Avalara (AVLR), Verrica Pharamaceuticals (VRCA).

Equity conferences this week: Goldman Sachs Global Health Care Conference on Tue-Thu, Deutsche Bank Global Consumer Conference on Tue-Thu, William Blair Growth Stock Conference on Tue-Thu, ACI Hospitality Minds Europe Conference on Wed-Thu, UBS Industrials and Transportation Conference on Wed-Thu, RBC Capital Markets Financial Technology Investor Day on Thu, Vertical Research Partners Materials Conference on Thu.

Market Comments

Sep S&P 500 E-minis (ESU18 +0.04%) this morning are up +0.50 points (+0.02%). Wednesday's closes: S&P 500 -0.40%, Dow Jones -0.47%, Nasdaq -0.05%. The S&P 500 on Wednesday retreated from a 3-month high and closed lower on the U.S. May core PPI report of +0.3% m/m and +2.4% y/y, which was stronger than expectations of +0.2% m/m and +2.3% y/y and was hawkish for Fed policy. Stocks were also undercut by the hawkish bent to the post FOMC meeting statement where policy makers raised their end-2018 fed funds rate forecast to 2.4% from 2.1% in March, which implies two more 25 bp rate hikes this year. Stocks were supported by strength in technology stocks as the Nasdaq Composite climbed to a new record high. There was also a rally in energy stocks after Jul WTI crude oil rose +0.42% to a 1-week high.

Sep 10-year T-notes (ZNU18 +0-070) this morning are up +6.5 ticks. Wednesday's closes: TYU8 -7.00, FVU8 -5.25. Sep 10-year T-notes on Wednesday fell to a 3-week low and closed lower on the hawkish Fed dots, which implied two more rate hikes this year. T-note prices were also undercut by the stronger-than-expected U.S. May core PP report and the FOMC's stronger 2018 U.S. GDP and PCE inflation estimates.

The dollar index (DXY00 -0.41%) this morning is down -0.236 (-0.25%). EUR/USD (^EURUSD +0.28%) is up +0.0035 (+0.30%). USD/JPY (^USDJPY -0.31%) is down -0.34 (-0.31%). Wednesday's closes: Dollar Index -0.089 (-0.09%), EUR/USD +0.0046 (+0.39%), USD/JPY -0.03 (-0.03%). The dollar index on Wednesday fell back from a 1-week high and closed lower on U.S.-China trade concerns after President Trump said he'll confront China "very strongly" over trade in coming weeks. EUR/USD saw some strength on short covering ahead of Thursday's ECB meeting. The dollar index was supported by the Fed's hike in its forecasts for the end-2018 and end-2019 fed funds rate.

Metals prices this morning are mixed with Aug gold (GCQ18 +0.56%) +6.9 (+0.53%) at a 2-week high, Jul silver (SIN18 +1.02%) +0.154 (+0.91%) at 1-1/2 month high and Jul copper (HGN18 -0.48%)
-0.018 (-0.54%). Wednesday's closes: Aug gold +1.9 (+0.15%), Jul silver +0.100 (+0.59%), Jul copper +0.0045 (+0.14%). Metals on Wednesday closed higher on the stronger-than-expected U.S. May core PPI report, which was supportive for gold demand as an inflation hedge. Copper prices were supported by labor unrest that may lead to a strike by copper workers at Chile's Escondidia copper mine, the world's largest, after BHP Billiton said that union wage demands are "exaggerated."

Jul WTI crude oil prices (CLN18 +0.47%) this morning are up +23 cents (+0.35%) at a 1-1/2 week high and Jul gasoline (RBN18 -0.43%) is -0.0110 (-0.52%). Wednesday's closes: Jul crude +0.28 (+0.42%), Jul gasoline +0.0352 (+1.69%). Jul crude oil and gasoline on Wednesday closed higher with Jul crude at a 1-week high. Crude oil prices were boosted by the -4.14 million bbl decline in weekly EIA crude inventories (vs expectations of -1.5 million bbl) and the unexpected -2.271 million bbl drop in EIA gasoline supplies (vs expectations of +1.0 million bbl). Crude oil prices were undercut by the large +0.9% w/w increase in U.S. crude production in the week of Jun 8 to a new record high of 10.9 million bpd.

Overnight U.S. Stock Movers

Oracle (ORCL -0.37%) was downgraded to 'Neutral' from 'Overweight' at JPMorgan Chase.

Michaels (MIK +0.87%) may open to the downside this morning after it reported Q1 comparable sales rose +0.4%, weaker than consensus of +0.8%, and then forecast Q2 adjusted EPS of 12 cents to 14 cents, below consensus of 19 cents.

Terex (TEX -1.30%) was downgraded to 'Sell' from 'Neutral' at Goldman Sachs with a price target of $34.

Capital One Financial (COF -0.27%) was upgraded to 'Overweight' from 'Neutral' at Piper Jaffray with a price target of $116.

Wyndham Destinations (WYND -0.60%) was rated a new 'Buy' at Suntrust Robinson Humphrey with a price target of $69.

Twenty-First Century Fox (FOX +7.48%) rose 1% in after-hours trading after Comcast offered $65 billion for the company.

Mylan NV (MYL -0.45%) fell 4% in after-hours trading after the FDA said it found "minor deficiencies" in Mylan's application for its generic drug Advair Diskus.

Tailored Brands (TLRD -2.76%) sank more than 20% in after-hours trading after it reported Q1 consolidated gross margins decreased -0.30% to 42.2% and after it forecast full-year adjusted EPS of $2.35 to $2.50, the midpoint well below consensus of $2.49.

Culp (CULP -0.49%) plunged 15% in after-hours trading after it reported Q4 adjusted EPS of 37 cents, weaker than consensus of 43 cents, and said it expects Q1 sales to fall about 10% y/y.

Teligent (TLGT unch) jumped 10% in after-hours trading after the FDA approved Teligent's Diflorasone Diacetate ointment 0.05%.

Aqua Metals (AQMS -3.98%) dropped almost 8% in after-hours trading after it announced that it intends to sell $20 million in shares of its common stock in an underwritten public offering.