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OVERNIGHT MARKETS AND NEWS
December E-mini S&Ps (ESZ15 +0.29%) are up +0.65% and European stocks are up +0.59% at a 1-week high on signs of stabilization in Chinese manufacturing activity that pushed up the price of oil (CLX15 +2.24%) by +2.42% and fueled a rally in energy and basic-resource companies. Copper prices (HGZ15 +0.26%) also climbed +0.56% to a 1-week high, which gave miners a lift with Anglo American Plc and BHP Billiton both up nearly 3%. Asian stocks settled higher: Japan +1.92%, Hong Kong and China closed for holiday, Taiwan +1.40%, Australia +1.80%, Singapore +0.39%, South Korea +0.81%, India +0.25%. An unexpected increase in the China Sep manufacturing PMI bolstered confidence in China's economic outlook and gave global stocks a lift, while a bigger than expected decline in Japan Q3 Tankan large manufacturing business conditions undercut the yen and gave Japanese stocks a lift on speculation that the BOJ may need to expand stimulus.
The dollar index (DXY00-0.04%) is up +0.03%. EUR/USD (^EURUSD) is down -0.27%. USD/JPY (^USDJPY) is up +0.08%.
Dec T-note prices (ZNZ15 +0.01%) are down -2 ticks.
The China Sep manufacturing PMI unexpectedly rose +0.1 to 49.8, better than expectations of no change at 49.7. The Sep non-manufacturing PMI remained unch at 53.4.
The Japan Q3 Tankan large manufacturing business conditions fell -3 from last quarter to 12, a bigger decline than expectations of -2 to 13.
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) Sep Challenger job cuts (Aug +2.9% y/y), (2) weekly initial unemployment claims (expected +4,000 to 271,000, previous +3,000 to 267,000) and continuing claims (expected -12,000 to 2.230 million, previous -1,000 to 2.242 million), (3) final-Sep Markit manufacturing PMI (expected unch at 53.0, prelim-Sep unch at 53.0), (4) Aug construction spending (expected +0.5%, Jul +0.7% m/m), (5) Sep ISM manufacturing index (expected -0.5 to 50.6, Aug -1.6 to 51.1), (6) San Francisco Fed President John Williams' speech on the economic outlook to Salt Lake Area Community Leaders, and (7) Sep total vehicle sales (expected 17.60 million, Aug 17.72 million).
There are 2 of the Russell 2000 companies that report earnings today: McCormick & Co (consensus $0.87), Micron Technology (0.87).
U.S. IPO's scheduled to price today include: Novocure (NVCR), Civitas Solutions (CIVI).
Equity conferences during the remainder of this week include: Leerink Partners Rare Disease Roundtable Conference on Thu.
OVERNIGHT U.S. STOCK MOVERS
SanDisk (SNDK +10.67%) was raised to 'Overweight' from 'Equalweight' at Morgan Stanley with a price target of $75.
McCormick (MKC +1.22%) reported Q3 EPS of 85 cents, below consensus of 87 cents.
Microsoft (MSFT +1.89%) was raised to 'Neutral' from 'Underperform' at Bank of America.
Universal Health Services (UHS +3.01%) was raised to 'Overweight' from 'Sector Weight' at Keybanc Capital Markets with a $145 price target.
Celgene (CELG +2.69%) was raised to 'Overweight' from 'Neutral' at JPMorgan Chase with a $152 price target.
Bristol-Meyers Squiibb (BMY +0.42%) received approval from the U.S. FDA for its Opdivo, Yervoy regiment usedto treat metastatic melanoma.
Schnitzer (SCHN +0.74%) raised guidance on Q4 adjusted continuing operation EPS to 27 cents-30 cents, above consensus of 24 cents.
Verisk Analytics (VRSK +2.30%) rose nearly 5% in after-hours trading after it was announced the company will replace Joy Global in the S&P 500 as of the close of trading on Oct 7.
Joy Global (JOY +0.95%) fell over 2% in after-hours trading after it was announced the company will be replaced in the S&P 500 by Verisk Analytics.
PBF Energy (PBF +2.21%) climbed over 4% in after-hours trading after the company said it bought the 155,000 barrel-per-day Torrance, CA, refinery from Exxon Mobil for $537.5 million plus working capital to be valued at closing.
Concho Resources (CXO +1.76%) fell 4% in after-hours trading after it announced an offering of 7 million shares of common stock.
Northrop Grumman (NOC +1.47%) won a U.S. Air Force contract worth up to $3.2 billion to build and service the Global Hawk drone.
Dec E-mini S&Ps (ESZ15 +0.29%) this morning are up +12.50 points (+0.65%). Wednesday's closes: S&P 500 +1.91%, Dow Jones +1.47%, Nasdaq +2.39%. The S&P 500 on Wednesday closed sharply higher on the +200,000 increase in the Sep ADP employment change, stronger than expectations of +190,000. There was also bargain hunting in raw-material producers and health-care stocks that have been beaten down recently. The main bearish factor for stocks was the -5.7 point decline in the Sep Chicago PMI to a 4-month low of 48.7.
Dec 10-year T-notes (ZNZ15 +0.01%) this morning are down -2 ticks. Wednesday's closes: TYZ5 -2.50, FVZ5 -1.00. Dec T-note prices on Wednesday closed lower on the the sharp rally in stocks, which curbed safe-haven demand for Treasuries, and on the stronger-than-expected Sep ADP employment report of +200,000. T-notes found underlying support from the decline in the Sep Chicago PMI to a 4-month low.
The dollar index (DXY00-0.04%) this morning is up +0.030 (+0.03%). EUR/USD (^EURUSD) is own -0.0030 (-0.27%). USD/JPY (^USDJPY) is up +0.10 (+0.08%). Wednesday's closes: Dollar Index +0.495 (+0.52%), EUR/USD -0.0072 (-0.64%), USD/JPY +0.14 (+0.12%). The dollar index on Wednesday closed higher on the larger-than-expected increase in Sep ADP employment report, which bolsters the case for a Fed interest rate increase this year. There was also weakness in EUR/USD on speculation the ECB may expand stimulus measures to fight deflation after Eurozone Sep CPI unexpectedly fell-0.1% y/y, weaker than expectations of unch y/y and the first decline in 6 months.
Nov crude oil (CLX15 +2.24%) this morning is up +$1.09 a barrel (+2.42%) and Nov gasoline (RBX15 +3.06%) is up +0.0419 (+3.07%). Wednesday's closes: CLX5 -0.14 (-0.31%), RBX5 -0.0170 (+1.26%). Nov crude oil and gasoline Wednesday settled mixed. Crude oil and gasoline were undercut by the unexpected +3.955 million bbl increase in EIA crude inventories (vs expectations of -500,000 bbl) and the unexpected +3.254 million bbl jump in EIA gasoline inventories (vs expectations of -500,000 bbl). Supportive factors included the -0.4% decline in U.S. crude production in the week ended Sep 25 to a 9-3/4 month low of 9.1 million bpd and the -1.068 million bbl decline in crude inventories at Cushing to a 6-1/2 month low.
GLOBAL EVENT CALENDAR10/01/2015
Sep Challenger job cuts, Aug +2.9% y/y.
Weekly initial unemployment claims expected +4,000 to 271,000, previous +3,000 to 267,000. Weekly continuing claims expected -12,000 to 2.230 million, previous -1,000 to 2.242 million.
USDA weekly Export Sales.
Final-Sep Markit manufacturing PMI expected unch at 53.0, prelim-Sep unch at 53.0.
Aug construction spending expected +0.5%, Jul +0.7% m/m.
Sep ISM manufacturing index expected -0.5 to 50.6, Aug -1.6 to 51.1. Sep ISM new orders sub-index, Aug -4.8 to 51.7. Sep ISM employment sub-index, Aug -1.5 to 51.2. Sep ISM prices paid sub-index expected +1.0 to 40.0, Aug -5.0 to 39.0.
Treasury announces amount of 3-year T-notes (previous $24 billion), 10-year T-notes (previous $21 billion) and 30-year T-bonds (previous $13 billion) to be auctioned Oct 6-8.
San Francisco Fed President John Williams speaks on the economic outlook to Salt Lake Area Community Leaders.
Sep total vehicle sales expected 17.60 million, Aug 17.72 million. Sep domestic vehicle sales expected 13.80 million, Aug 13.80 million.
Japan Sep vehicle sales, Aug +2.3% y/y.
Japan Aug jobless rate expected unch at 3.3%. Aug job-to-applicant ratio expected unch at 1.21.
Japan Aug overall household spending expected +0.3% y/y, Jul -0.2% y/y.
Revised German Sep Markit/BME manufacturing PMI, previous -0.8 to 52.5.
Revised Eurozone Sep Markit manufacturing PMI, previous -0.3 to 52.0.
ECB President Mario Draghi speaks at the Atlantic Council Global Citizens Award ceremony in Washington, D.C.
UK Sep Markit manufacturing PMI expected -0.2 to 51.3, Aug 51.5.