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OVERNIGHT MARKETS AND NEWS
December E-mini S&Ps (ESZ15-0.32%) are down -0.15% as prices consolidate following Monday's sharp rally to a 2-week high. European stocks are up +0.61% at a 2-week high after German Aug factory orders unexpectedly fell and bolstered speculation the ECB may expand monetary stimulus. Gains were limited as basic resource companies and energy producers fell after the price of copper and crude oil declined. Asian stocks settled mostly higher: Japan +1.00%, Hong Kong -0.10%, China closed for holiday, Taiwan +0.50%, Australia +0.33%, Singapore +1.62%, South Korea +0.92%, India +0.55%. Japan's Nikkei Stock Index rallied up to a 2-week high on the prospects for increased trade after Japan, the U.S. and other Pacific-rim countries that make up nearly 40% of the world economy finalized the Trans-Pacific Partnership agreement on Monday. If lawmakers in each country approve the accord, it will guarantee intellectual property rights for drugmakers and reduce tariffs on goods from food to cars and should boost the prospects for increase global trade.
The dollar index (DXY00-0.23%) is down -0.20%. EUR/USD (^EURUSD) is up +0.25%. USD/JPY (^USDJPY) is down -0.08%.
German Aug factory orders unexpectedly fell -1.8% m/m, weaker than expectations of +0.5% m/m. On an annual basis, Aug factory orders rose +1.9% y/y, weaker than expectations of +5.6% y/y.
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) Aug U.S. trade deficit (expected -$48.0 billion, Jul -$41.86 billion), (2) Kansas City Fed President Esther George's appearance as keynote speaker at “The Faster Payments Imperative: Transforming the Market” at an event in Chicago, (3) the Treasury's auction of $24 billion of 3-year T-notes, (4) San Francisco Fed President John Williams' speech to the Urban Land Institute, and (5) the IMF's release of its World Economic Outlook.
There are two of the Russell 2000 companies report earnings today: Pepsico (consensus $1.26), Yum Brands (1.06).
U.S. IPO's scheduled to price today: Pure Storage (PSIG), Aclaris Therapeutics (ACRS).
Equity conferences during the remainder of this week include: The China-Russia E-Commerce Summit on Mon, Oil & Money Conference on Tue, Barclays Select Series Biosimilars Symposium on Wed, Capital Link Shipping Marine Services and Offshore Forum on Wed, and Goldman Sachs EMEA Leveraged Finance Conference on Thu.
OVERNIGHT U.S. STOCK MOVERS
Comerica (CMA +1.61%) was cut to 'Neutral' from 'Overweight' at JPMorgan Chase.
Pepsico (PEP +1.75%) climbed nearly 3% in pre-market trading after it reported Q3 EPS of $1.35, higher than consensus of $1.26.
Greatbatch (GB-0.14%) lowered guidance on fiscal 2015 sales to $685 million-$695 million, weaker than consensus of $714.7 million.
DuPont (DD +4.10%) rose 4% in pre-market trading after the company said Edward Breen will replace Ellen Kullman as chairman and CEO.
PMC-Sierra (PMCS +3.50%) surged 32% in pre-market trading after Skywork Solutions agreed to buy the company for $2 billion.
Computer Sciences Corp. (CSC +1.39%) said it will acquire Australia's UXC for $428 million.
Haemonetics (HAE-2.17%) tumbled over 12% in after-hours trading after it lowered guidance on fiscal 2015 adjusted EPS to $1.65-$1.75 from a Jul projection of $1.98-$2.08, well below consensus of $2.02.
Petrobras (PBR +5.39%) said it will cut its 2015 operating expenses forecast to $29 billion from $30 billion and cut its 2016 operating expenses forecast to $21 billion from $27 billion.
Ruckus Wireless (RKUS +4.25%) climbed 4% in after-hours trading when it was announced the company will join the S&P Smallcap 600 Index as of the close of trading on Wednesday, October 7.
Regulus Therapeutics (RGLS +0.77%) surged over 20% in after-hours trading after it presented new data that demonstrated a favorable pre-clinical profile for its RG-012 drug in treatment of Alport syndrome, a life-threatening genetic kidney disease.
Ilumina (ILMN-0.27%) slumped over 15% in after-hours trading after it lowered guidance on Q3 revenue to $550 million, below consensus of $569.1 million, and also lowered guidance on its Q4 revenue estimate to $570 million, weaker than consensus of $603.2 million.
The Container Store Group (TCS +2.84%) fell 4% in after-hours trading after it reported Q2 adjusted EPS of 6 cents, below consensus of 7 cents.
Dec E-mini S&Ps (ESZ15-0.32%) this morning are down -3.00 points. Monday's closes: S&P 500 +1.83%, Dow Jones +1.85%, Nasdaq +1.50%. The S&P 500 on Monday climbed to a 2-week high and closed sharply higher on carryover support from Friday's weaker-than-expected U.S. Sep payrolls report that pushed back Fed interest rate increase expectations from this year into Q1 of 2016 at the earliest. In addition, basic-resource stocks and energy producers rallied as the price of copper and crude oil moved higher. Stocks were able to shake off the -2.1 point decline in the Sep ISM non-manufacturing PMI, which was weaker than expectations of -1.5 to 57.5.
Dec 10-year T-notes (ZNZ15 +0.11%) this morning are up +1 tick. Monday's closes: TYZ5 -16.50, FVZ5 -9.50. Dec T-notes on Monday closed lower on the rally in the S&P 500 to a 2-week high, which reduced the safe-haven demand for T-notes, and on an increase in inflation expectations after the 10-year T-note breakeven rate rose to a 1-week high.
The dollar index (DXY00-0.23%) this morning is down -0.194 (-0.20%). EUR/USD (^EURUSD)is up +0.0028 (+0.25%). USD/JPY (^USDJPY) is down-0.10 (-0.08%). Monday's closes: Dollar Index +0.276 (+0.29%), EUR/USD -0.0020 (-0.25%), USD/JPY +0.55 (+0.46%). The dollar index on Monday closed higher on strength in USD/JPY after a rally in stocks reduced the safe-haven demand for the yen. In addition, EUR/USD saw weakness on the downward revision in the Eurozone Sep Markit composite PMI and the decline in Eurozone Oct Sentix investor confidence to a 9-month low, which bolstered speculation the ECB may expand stimulus.
Nov crude oil (CLX15-0.69%) this morning is down -11 cents (-0.24%) and Nov gasoline (RBX15-0.15%) is up (+0.36%). Monday's closes: CLX5 +0.72 (+1.58%), RBX5 +0.0441 (+3.29%). Nov crude oil and gasoline on Monday closed higher on last Friday's Baker Hughes report showing that the number of active U.S. oil rigs as of Oct 2 fell -26 to a 5-year low of 614 rigs. Crude oil also closed higher on the escalation of Middle Eastern hostilities after Russian fighter jets flew into Turkish airspace and Turkey warned it would protect its airspace "at any cost."
GLOBAL EVENT CALENDAR10/06/2015
Aug trade balance expected -$48.0 billion, Jul -$41.86 billion.
Kansas City Fed President Esther George is keynote speaker at The Faster Payments Imperative: Transforming the Market at an event in Chicago.
Treasury auctions $24 billion of 3-year T-notes.
San Francisco Fed President John Williams delivers an outlook speech to the Urban Land Institute.
IMF releases its World Economic Outlook.
German Aug factory orders expected +0.5% m/m and +5.6% y/y, Jul -1.4% m/m and -0.6% y/y.
UK Sep new car registrations, Aug +9.6% y/y.
UK Sep BRC shop price index, Aug -1.4% y/y.
ECB President Mario Draghi speaks at an event organized by the ECB in Frankfurt.
U.S. STOCK CALENDAR10/06/2015
Q3 2015 Earnings Release
Q3 2015 Earnings Call
Special Media Event: Windows 10 Devices
Digital Realty Trust Inc
Digital Realty Trust Inc
Investor Day - Afternoon Session
Adobe Systems Inc
Yum! Brands Inc
Q3 2015 Earnings Release
Extraordinary Shareholders Meeting
McDonald's Corp. Begins Offering All-Day Breakfast in U.S. Locations