Morning Call: Global stocks stabilize after Tuesday's rout; Sep E-mini S&Ps up +0.30%; Dollar index up +0.17% at a fresh 11-month high; Jul copper down -0.20% at a 3-week low. - Wed Jun 20, 6:39AM CDT
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 ESU18 - S&P 500 E-Mini

Overnight Markets and News

Sep E-mini S&Ps (ESU18 +0.22%) this morning are up +0.30% and Europeans stocks are up +0.63% as global stock markets stabilize after Tuesday's plunge. Energy stocks are leading the overall market higher with Aug WTI crude oil (CLQ18 +0.18%) up +0.06% after the API reported late Tuesday afternoon that U.S. crude stockpiles fell -3.02 million bbl last week. European exporter stocks are also moving higher as EUR/USD weakened after ECB Governing Council member Nowotny said EUR/USD is weakening "primarily due" to divergent central bank interest rate policies. Asian stocks settled higher: Japan +1.24%, Hong Kong +0.77%, China +0.27%, Taiwan +0.21%, Australia +1.15%, Singapore +0.44%, South Korea +0.89%, India +0.74%. Chinese stocks recovered early losses and closed higher after PBOC Governor Yi Gang said policy makers are prepared for outside shocks and pledged to use monetary policy "comprehensively." Strength in Japanese exporters led the Nikkei Stock Index higher after USD/JPY rebounded from Tuesday's 1-week low.

The dollar index (DXY00 +0.04%) is up +0.17% at a new 11-month high. EUR/USD (^EURUSD -0.17%) is down -0.23%. USD/JPY (^USDJPY -0.01%) is down -0.03%.

Sep 10-year T-note prices (ZNU18 -0-035) are down -1.5 ticks.

ECB Governing Council member Nowotny said EUR/USD is weakening "primarily due to the development of interest rate policy where the ECB wants to keep its rates on hold at least until summer of next year, while the U.S. has announced rate hikes, so that the difference between European and U.S. rates becomes stronger."

German May PPI rose +0.5% m/m and +2.7% y/y, stronger than expectations of +0.4% m/m and +2.5% y/y with the +2.7% y/y gain the fastest year-on-year increase in 7 months.

UK Jun CBI trends total orders rose +16 to a 5-month high of 13, stronger than expectations of +5 to 2. The Jun CBI trends selling prices fell -6 to 13, the lowest in 11 months.

U.S. Stock Preview

Key U.S. news today includes: (1) weekly MBA mortgage applications (previous -1.5% to 365.3 with purchase sub-index -1.5% to 249.0 and refi sub-index -1.5% to 992.2), (2) Q1 current account balance (expected -$129.0 billion, Q4 -$128.16 billion), (3) Fed Chair Jerome Powell and ECB President Mario Draghi take part in a policy panel at an event in Sintra, Portugal, (4) May existing home sales (expected +1.1% to 5.52 million, Apr -2.5% to 5.46 million), (5) EIA weekly Petroleum Status Report.

Notable Russell 1000 earnings reports today include: Micron Technology (consensus $3.14).

U.S. IPO's scheduled to price today: Essential Properties Realty Trust (EPRT), Magenta Therapeutics (MGTA), Kezar Life Sciences (KZR), Aptinyx Inc (APTX), I3 Verticals (IIIV), Xeris Pharmaceuticals (XERS), ElectroCore (ECOR), Avrobio (AVRO).

Equity conferences this week: J.P. Morgan Energy Equity Conference on Mon-Wed, Jefferies Global Consumer Conference on Tue-Wed, Oppenheimer Consumer Growth and e-Commerce Conference on Tue-Wed, Citi Chemicals Conference on Thu, National Business Aviation Association Regional Conference on Thu.

Market Comments

Sep S&P 500 E-minis (ESU18 +0.22%) this morning are up +8.25 points (+0.30%). Tuesday's closes: S&P 500 -0.40%, Dow Jones -1.15%, Nasdaq 100 -0.32%. The S&P 500 on Tuesday dropped to a 2-week low and closed lower on concern that the trade war between the U.S. and China will slow global economic growth after China vowed to retaliate "forcefully" against U.S. threats for tariffs on another $200 billion in Chinese imports that President Trump ordered. Stocks were also undercut by the -4.6% drop in U.S. May building permits to an 8-month low of 1.301 million, weaker than expectations of -1.0% to 1.350 million. Energy stocks were weak as crude oil prices tumbled -1.20%.

Sep 10-year T-notes (ZNU18 -0-035) this morning are down -1.5 ticks. Tuesday's closes: TYU8 +8.00, FVU8 +4.75. Sep 10-year T-notes on Tuesday rallied to a 2-week high and closed higher on an escalation of trade concerns between the U.S. and China that sent the S&P 500 down to a 2-week low and boosted the safe-haven demand for T-notes. There was also talk the U.S. housing market may be slowing after May building permits, a harbinger of future building projects, fell to an 8-month low.

The dollar index (DXY00 +0.04%) this morning is up +0.163 (+0.17%) at a fresh 11-month high, EUR/USD (^EURUSD -0.17%) is down -0.0027 (-0.23%) and USD/JPY (^USDJPY -0.01%) is down -0.03 (-0.03%). Tuesday's closes: Dollar Index +0.298 (+0.31%), EUR/USD -0.00033 (-0.28%), USD/JPY -0.49 (-0.44%). The dollar index on Tuesday climbed to an 11-month high and closed higher on weakness in EUR/USD which fell to a 2-1/2 week low on dovish comments from ECB President Draghi who said the ECB "will remain patient in determining the timing of the first interest rate increase." GBP/USD tumbled to a 7-month low after UK Prime Minister May lost a vote on her Brexit legislation in the House of Lords.

Metals this morning are weaker with Aug gold (GCQ18 -0.29%) -3.7 (-0.29%), July silver (SIN18 -0.26%) -0.043 (-0.26%), and July copper (HGN18 -0.11%) -0.006 (-0.20%) at a 3-week low. Tuesday's closes: Aug gold -1.50 (-0.12%), Jul silver -0.117 (-0.71%), Jul copper -5.95 (-1.92%). Metals on Tuesday closed lower with Aug gold at a 6-month low, Jul silver at a 1-month low and Jul copper at a 2-1/2 week low. Metals prices were undercut by the jump in the dollar index to a 11-month high and by an escalation of trade tensions between China and the U.S that may slow global growth and industrial metals demand.

Aug crude oil prices (CLQ18 +0.18%) this morning are up +4 cents (+0.06%) and Aug gasoline (RBQ18 -0.50%) is -0.0094 (-0.46%). Tuesday's closes: Aug crude -0.79 (-1.20%), Aug gasoline -1.69 (-0.83%). Aug crude oil and gasoline on Tuesday closed lower on the rally in the dollar index to an 11-month high and on concerns about global growth from the U.S.-China trade disputes. There was also infighting among OPEC and its allies as Russia pushes for a +1.5 million bpd increase in collective daily crude output, Iran, Iraq and Venezuela say it's too soon to raise output levels.

Overnight U.S. Stock Movers

Planet Fitness (PLNT -1.01%) was rated a new 'Buy' at Berenberg with a price target of $53.

Tractor Supply (TSCO unch) was rated a new 'Accumulate' at Gordon Haskett with a price target of $86.

Duke Energy (DUK +1.69%) was upgraded to 'Buy' from 'Neutral' at Bank of America/Merrill Lynch with a price target of $84.

Silgan Holdings (SLGN -1.83%) was rated anew 'Sell' at UBS with a price target of $25.

Boeing (BA -3.84%) announced that it will sell FedEx 24 cargo aircraft in a deal worth $6.6 billion.

FedEx (FDX -2.00%) gained almost 1% in after-hours trading after it reported Q4 revenue of $17.3 billion, better than consensus of $17.2 billion.

Walgreens Boots Alliance (WBA +0.72%) climbed over 3% in after-hours trading after it was announced that it will replace GE in the Dow Jones Industrial Average prior to the open of trading Tuesday, June 26.

Oracle (ORCL -0.54%) fell 4% in after-hours trading after it forecast Q1 adjusted EPS of 67 cents to 69 cents, below consensus of 72 cents.

Starbucks (SBUX +0.37%) fell more than 2% in after-hours trading after it forecast Q3 global same-store sales up 1%, weaker than consensus of up 2.9%.

Anika Therapeutics (ANIK +2.33%) plunged 25% in after-hours trading after it reported its CINGAL 16-02 for treatment in a clinical trial for knee osteoarthritis did not achieve its primary endpoint.

La-Z-Boy (LZB +0.30%) dropped 8% in after-hour trading after it reported consolidated operating margin for fiscal 2018 was 8.2% versus 8.8% in the prior year period.

Prothena Corp PLC (PRTA +2.88%) gained 1% in after-hours trading after it said the Phase 1b study of its PRX002/RG7935 showed acceptable safety and tolerability profile in patients with Parkinson's disease, meeting the study's primary endpoint.