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13 July 2016
OVERNIGHT MARKETS AND NEWS
Sep E-mini S&Ps (ESU16 +0.03%) are up +0.12% and European
stocks are up +0.30% at a 2-week high on speculation central bank actions will
be sufficient to contain the fallout from the Brexit vote. The BOE is expected
to lower interest rates Thursday and Japanese Prime Minister Abe has ordered
more fiscal stimulus. Strength in commodity producers is leading the overall
market higher as the price of copper (HGU16 +1.42%) jumped +1.42% to a 2-1/4 month
high. On the negative side, energy producers are lower as the price of crude
oil (CLQ16 -1.26%) is down -1.37% after API data late yesterday showed
U.S. crude stockpiles unexpectedly rose +2.2 million bbl.
Asian stocks settled
higher: Japan +0.84%, Hong Kong +0.46%, China +0.37%, Taiwan +0.18%, Australia
+0.66%, Singapore +0.30%, South Korea +0.85%, India +0.03%. Asian stock markets
followed other global bourses higher as China's Shanghai Composite rose to a
2-3/4 month high and Japan's Nikkei Stock Index climbed to a 1-month high. The
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The dollar index (DXY00 -0.05%) is down -0.11%. EUR/USD (^EURUSD)
is up +0.19%. USD/JPY (^USDJPY) is up +0.12%.
Sep T-note prices (ZNU16 +0.18%) are up +5 ticks.
Eurozone May industrial production fell -1.2% m/m, a bigger decline than
expectations of -0.8% m/m. The
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The China Jun trade
balance shrank to a surplus of $48.11 billion, a bigger surplus than
expectations of $45.65 billion. Jun exports fell -4.8% y/y, a smaller decline than
expectations of -5.0% y/y, and Jun imports fell -8.4% y/y, a bigger decline than expectations
of -6.2% y/y.
Key U.S. news today
includes: (1) weekly MBA mortgage applications (previous +14.2% with purchase
sub-index +4.3% and refi sub-index +20.8%), (2) Jun import price index
(expected +0.5% m/m and -4.6% y/y, May +1.4% m/m and -5.0% y/y), (3) the Treasury's auction of
$12 billion of 30-year T-bonds, (4) Jun monthly budget statement (expected
+$23.0 billion, May -$52.507 billion), (5) Fed Beige Book, (6) Philadelphia Fed
President Patrick Harker (non-voter) speaks on the economic outlook at an event
in Philadelphia, and (7) EIA Weekly Petroleum Status Report.
Russell 1000 companies
reporting earnings today: CSX (consensus $0.44), Yum Brands (0.74), PacWest
Bancorp (0.69).
U.S. IPO's scheduled to
price today: none.
Equity conferences this week include: none. The
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Bank of America (BAC +2.50%) was rated a new 'Buy' at
Berenberg with a price target of $15.
Whiting Petroleum (WLL +12.53%) was upgraded to 'Outperform'
from 'Neutral' at Credit Suisse.
Darden Restaurants (DRI +0.29%) was downgraded to 'Market
Perform' from 'Outperform' at Wells Fargo Securities.
Alexion Pharmaceuticals
(ALXN +0.04%) was rated a new 'Outperform'
at RBC Capital Markets with a 12-month price target of $188.
Michaels Cos (MIK +0.14%) dropped over 3% in after-hours
trading after it started a secondary offering of 11 million shares of common
stock.
Chesapeake Lodging Trust (CHSP +1.09%) slipped nearly 1% in
after-hours trading after it said Q2 pro forma revpar rose +2.2%, below an
April 28 forecast of up +4%-6%, citing continued headwinds at the start of the
second half of the year. The Total Investment & Insurance
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AAR Corp. (AIR +4.33%) sank 10% in after-hours
trading after it said it sees 2017 EPS continuing operations of $1.30-$1.40,
well below consensus of $2.07.
Teva Pharmaceutical
Industries Ltd. (TEVA +3.00%)
gained nearly 2% in after-hours trading after it raised guidance on Q2 revenue
to $4.9 billion-$5.0 billion from a prior view of $4.8 billion-$4.9 billion.
Fastenal (FAST -3.46%) was downgraded to 'Hold' from
'Buy' at Edward Jones.
Minneapolis Fed
President Kashkari (non-voter) said the Fed can continue to be patient on
raising interest rates as "there's not a huge urgency to raise rates
because inflation is coming up low."
Juno Therapeutics (JUNO +1.68%) surged 33% in after-hours
trading after the FDA removed the clinical hold on Juno's Phase 2 study of
JCAR015 to treat lymphoblastic leukemia.
Avinger (AVGR -0.44%) lowered guidance on 2016
revenue to $19 million-$23 million from a prior view of $25 million-$30
million.
Orexigen Therapeutics (OREX +0.50%) rallied over 4% in after-hours
trading after its top shareholder, Baupost, said it may convert/exercise
notes/warrants of up to 4.7 million common shares. The
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Sep E-mini S&Ps (ESU16 +0.03%) this morning are up +2.50
points (+0.12%). Tuesday's closes: S&P 500 +0.70%, Dow Jones +0.66%, Nasdaq
+0.50%. The S&P 500 on Tuesday climbed to a fresh all-time high and closed
moderately higher on carry-over support from a +1.7% rally in European stocks
on reduced political uncertainty in Britain with Home Secretary May prepared to
take over as the UK's next prime minister. Stocks were also boosted by a good
beginning to U.S. Q2 company earnings season as Alcoa jumped 5% after it
reported better-than-expected Q2 earnings. The Total Investment
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Sep 10-year T-note
prices (ZNU16 +0.18%) this morning are up +5 ticks.
Tuesday's closes: TYU6 -20.50,
FVU6 -9.25. Sep T-notes on Tuesday fell to a
1-week low and closed sharply lower on reduced safe-haven demand with the the
rally in the S&P 500 to a new record high and on hawkish comments from
Cleveland Fed President Mester who said she thinks "a gradual upward tilt
for interest rates is appropriate for the U.S. economy."
The dollar index (DXY00 -0.05%) this morning is down -0.110 (-0.11%), EUR/USD (^EURUSD)
is up +0.0021 (+0.19%) and USD/JPY (^USDJPY)
is up +0.13 (+0.12%). Tuesday's closes: Dollar Index -0.130 (-0.13%), EUR/USD +0.0003 (+0.03%),
USD/JPY +1.89 (+1.84%). The dollar index on Tuesday closed lower on the
larger-than-expected decline in U.S. May JOLTS job openings to a 5-month low
and strength in GBP/USD on reduced political uncertainty in Britain as Home
Secretary May is prepared to take over as the UK's next prime minister. USD/JPY
jumped to a 2-week high after Japanese Prime Minister Abe said he wants to
"accelerate" Japan's exit from deflation, which suggests he favors
additional yen-negative stimulus measures.
Aug WTI crude oil (CLQ16 -1.26%) prices this morning are down -64 cents
(-1.37%) and Aug gasoline prices (RBQ16 -1.84%)
are down -0.0268(-1.87%).
Tuesday's closes: CLQ6 +2.04 (+4.56%), RBQ6 +0.0466 (+3.37%). Aug crude oil and
gasoline on Tuesday closed sharply higher on a weaker dollar, the rally in the
S&P 500 to a record high, and expectations for Wednesday's weekly EIA data
to show that U.S. crude inventories fell -3.5 million bbl. The
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