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05 July 2016
OVERNIGHT
MARKETS AND NEWS
Sep
E-mini S&Ps (ESU16 -0.66%) are down -0.44% and European
stocks are down -1.16% as a decline in commodity prices drags down
mining stocks and energy producers. Also, fallout from the Brexit vote is
beginning to emerge as commercial-property companies slumped and the British
pound tumbled -0.95% to a fresh 30-3/4 year low after Standard Life
Investments suspended trading in its 2.9 billion pound ($3.9 billion) UK Real
Estate fund as withdrawals surged. In addition, Italian bank stocks sold-off,
with Banca Monte dei Paschi di Siena SpA down over 7% to a record low, after a
person familiar with the matter said Italy is considering injecting fresh
capital into Italy's third-biggest bank ahead of stress test results. Asian stocks
settled mostly lower: Japan -0.67%, Hong Kong -1.46%, China +0.60%,
Taiwan 0.51%, Australia -1.02%, Singapore -0.21%, South Korea -0.29%,
India -0.415.China's Shanghai Composite was a bright spot as it rallied to
a 2-1/4 month high and the Chinese yuan fell to a 5-1/2 year low against the
dollar on speculation the PBOC will take steps to boost economic growth after a
front-page commentary in the state-run China Securities Journal said the PBOC
is likely to fine-tune monetary policy in the second half of this year with
targeted reserve-requirement ratio cuts or possibly across-the-board cuts. The Total Investment & Insurance
Solutions
The
dollar index (DXY00 -0.04%) is down -0.11% at a 1-week low.
EUR/USD (^EURUSD) is down -0.01%. USD/JPY (^USDJPY)
is down -0.76%.
Sep
T-note prices (ZNU16 +0.49%) are up +21 ticks.
The
BOE cut its capital requirements for UK banks and pledged to implement other
measures to shore up financial stability in the wake of the Brexit vote. The
BOE's Financial Policy Committee lowered the countercyclical-capital buffer rate
for UK exposures to zero from 0.5%, a move the BOE said would raise the
capacity for lending to households and businesses by as much as 150 billion
pounds. The Total Investment &
Insurance Solutions
Key
U.S. news today includes: (1) Jun New York ISM (May 37.2), (2) May factory
orders (expected -0.8%, Apr +1.9% and +0.5% ex transportation), (3) New
York Fed President William Dudley (voter) participates in a roundtable
discussion on local business conditions with members of the Greater Binghamton
Chamber of Commerce, (4) USDA weekly grain export inspections, and (5) USDA
Weekly Crop Progress. The Total
Investment & Insurance Solutions
Russell
1000 companies reporting earnings today: none.
U.S.
IPO's scheduled to price today: none.
Equity
conferences this week include: none.
The Total Investment & Insurance
Solutions
Tesla
(TSLA +1.99%)
dropped over 4% in pre-market trading after the company delivered 14,370
automobiles in Q2, below expectations of 17,000.
Illumina
(ILMN +0.25%)
was downgraded to 'Underweight' from 'Equalweight' at Morgan Stanley. The Total Investment & Insurance
Solutions
CenterPoint
Energy (CNP +0.21%)
was downgraded to 'Hold' from 'Buy' at Tudor Pickering & Co. The Total Investment & Insurance
Solutions
Nordstrom
(JWN +0.47%)
was upgraded to 'Hold' from 'Sell' at Miller Tabak & Co.
Netflix
(NFLX +5.67%)
was downgraded to 'Hold' from 'Buy at Needham.
Cerner
Corp. (CERN +0.53%)
was downgraded to 'Market Perform' from 'Outperform' at Raymond James. The Total Investment & Insurance
Solutions
CyberArk
Software Ltd. (CYBR -0.45%) was upgraded to 'Overweight' from
'Equal-weight' at Barclays with a target price of $60.
Esperion
Therapeutics (ESPR +4.76%) was downgraded to 'Hold' from 'Buy' at
Wallachbeth Capital with a 12-month price target of $35.
According
to people familiar with the matter, Aetna (AET -1.78%) is
preparing to sell assets worth several billion dollars as it seeks to silence
regulatory concerns over its proposed $37 billion takeover of Humana.
Eiger
BioPharmaceuticals (EIGR +0.45%) was rated a new 'Outperform' at Oppenheimer
with an 18-month target price of $34.
September
E-mini S&Ps (ESU16 -0.66%) this morning are down -9.25 points
(-0.44%). Friday's closes: S&P 500 +0.19%, Dow Jones +0.11%, Nasdaq +0.45%.
The S&P 500 on Friday climbed to a 1-week high and settled higher on
favorable interest rate developments as UK gilt yields and U.S. T-note yields
fell to record lows on optimism that central banks will expand easing measures
to mitigate the negative effects of the Brexit vote. Stocks were also boosted
by the unexpected +1.9 point increase in the U.S. Jun ISM manufacturing PMI to
53.2, stronger than expectations of unch at 51.3 and the fastest pace of
expansion in 16 months. Stocks were undercut by S&P's cut in its U.S. 2016
GDP estimate to 2.0% from a previous estimate of 2.3%. The Total Investment & Insurance Solutions
Sep
10-year T-note prices (ZNU16 +0.49%) this morning are up +21 ticks. Friday's
closes: TYU6 +3.00. FVU6 -0.75. Sep T-notes on Friday closed higher
as the 10-year T-note yield fell to an all-time low of 1.377%. T-note prices
were boosted by carryover support from a rally in UK gilts and Japanese 10-year
bonds to all-time highs and speculation that foreign demand for U.S. government
debt will increase as yields on 10-year U.S. Treasuries are still above zero
while yields on German bunds and Japanese 10-year bonds are below zero. T-notes
were undercut by news that the Jun ISM manufacturing index rose to a 16-month
high.
The
dollar index (DXY00 -0.04%) this morning is down -0.103 (-0.11%)
at a 1-week low. EUR/USD (^EURUSD) is down -0.0001 (-0.01%). USD/JPY (^USDJPY)
is down -0.78 (-0.76%). Friday's closes: Dollar Index -0.507 (-0.53%),
EUR/USD +0.0030 (+0.27%), USD/JPY -0.68 (-0.66%). The dollar index on
Friday closed lower on S&P's cut in its U.S. 2016 GDP estimate to 2.0% from
a prior estimate of 2.3% and on strength in EUR/USD after the Eurozone Jun
Markit manufacturing PMI was revised upward to a 6-month high of 52.8 from
52.6.
Aug
WTI crude oil (CLQ16 -2.71%) this morning is down -$1.17 a barrel
(-2.39%). Aug gasoline (RBQ16 -2.87%) is down -0.0395 (-2.61%).
Friday's closes: CLQ6 +0.66 (+1.37%), RBQ6 +0.0122 (+0.81%). Aug crude oil and
gasoline on Friday closed higher on a weaker dollar and signs of economic
strength after the Jun ISM manufacturing index expanded at its fastest pace in
16 months. Gasoline prices were boosted by expectations for strong gasoline
demand as the AAA expects a record 43 million Americans to travel at least 50
miles by car this Fourth of July holiday, up +1.3% y/y. The Total Investment & Insurance Solutions
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