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OVERNIGHT MARKETS AND NEWS
December E-mini S&Ps (ESZ15 +0.65%) are up +0.44% and European stocks are up +0.61%, both at 2-1/2 week highs, as a +1.65% rally in Nov crude oil (CLX15 +1.94%) to a 5-week high and a +0.51% increase in Dec copper (HGZ15 +1.10%) to a 2-week high boosted energy and commodity producers. Also, Morgan Stanley upgraded their recommendation on miners to 'Attractive,' which boosted Anglo American Plc, Rio Tinto Group and BHP Billiton Ltd. to up more than 4%. In addition, increased M&A activity boosted stocks as SABMiller gained over 1% after Anheuser-Busch InBev NV raised its offer for SABMiller to $104 billion. Asian stocks settled higher: Japan +0.75%, Hong Kong +3.13%, China closed for holiday, Taiwan +1.20%, Australia +0.59%, Singapore +2.22%, South Korea +1.39%, India +0.38%. Japan's Nikkei Stock Index climbed to a 2-1/2 week high as the rally in crude oil bolstered energy producers. USD/JPY is weaker after the BOJ refrained from additional stimulus measures following today's 2-day policy meeting and after BOJ Governor Kuroda said that inflation will climb toward the BOJ's 2.0% target once the effect of lower oil prices dissipates. The BOJ will update its outlook for inflation and economic growth on Oct 30.
The dollar index (DXY00 +0.02%) is up +0.03%. EUR/USD (^EURUSD) is down -0.11%% on speculation the ECB may expand QE after German Aug industrial production unexpectedly fell. USD/JPY (^USDJPY) is down -0.12%.
Dec T-note prices (ZNZ15-0.19%) are down -8 ticks.
German Aug industrial production unexpectedly fell -1.2%, weaker than expectations of +0.2% m/m and the biggest decline in a year. On an annual basis, Aug industrial production rose +2.3% y/y, weaker than expectations of +3.3% y/y.
UK Aug industrial production rose +1.0% m/m, stronger than expectations of +0.3% m/m and the largest increase in 18 months. On an annual basis, Aug industrial production rose +1.9% y/y, stronger than expectations of +1.2% y/y.
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) weekly MBA mortgage applications (previous -6.7% with purchase sub-index -5.6% and refi sub-index -7.5%), (2) San Francisco Fed President John Williams' speech at the Gonzaga University School of Business Administration, (3) Aug consumer credit (expected +$19.500 billion, Jul +$19.097 billion), (4) the Treasury's auction of $21 billion of 10-year T-notes.
There are 7 of the Russell 2000 companies report earnings today: Monsanto (consensus -$0.03), Constellation Brands (1.32), RMP Intl (0.81), Global Payments (1.43), Acuity Brands (1.62), Lumentum Holdings (0.20).
U.S. IPO's scheduled to price today: CPI Card Group (PMTS), CytomX Therapeutics (CTMX), Allegiance Bancshares (ABTX).
Equity conferences during the remainder of this week include: 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
Anglo American Plc (AAUKY +4.59%) , Rio Tinto Group (RIO +0.43%) and BHP Billiton Ltd. (BHP +1.63%) are all up more than 4% in pre-market trading after Morgan Stanley upgraded the metals and mining sectors to 'Attractive' saying the sectors trade at historically attractive valuations.
Exxon-Mobile (XOM +1.41%) and Schlumberger (SLB +2.57%) are both up over 1% in pre-market trading as the price of crude oil rose to a 5-week high.
SABMiller (SBMRY-3.45%) is up over 1% in pre-market trading after Anheuser-Busch InBev NV raised its offer for the company to $104 billion.
Ross Stores (ROST-2.97%) were rated a new 'Buy' at Citigroup with a price target of $59.
Michael Kors (KORS-1.18%) were rated a new 'Sell' at Citigroup with a price target of $38.
Team Inc. (TISI-3.22%) reported Q1 EPS of 23 cents, better than consensus of 22 cents.
Nu Skin (NUS +1.57%) sank over 12% in after-hours trading after it reported preliminary Q3 revenue of $570 million-$573 million, less than consensus of $600 million-$620 million.
Yum! Brands (YUM +0.45%) slumped over 15% in after-hours trading after it reported Q2 adjusted EPS of $1.00, lower than consensus of $1.06 and said the pace of recovery in China is below expectations.
Allegheny Technologies (ATI +2.12%) forecast a Q3 adjusted loss of -27 cents to -32 cents, wider than consensus of a -23 cent loss.
U.S. Steel (X +3.24%) fell 1% in after-hours trading after it said it was examining consolidation of its North American flat-rolled steel operations and may temporarily idle its Granite City, Il plant and cut jobs.
Adobe (ADBE-0.80%) tumbled over 7% in after-hours trading after it said it sees fiscal 2016 adjusted EPS of $2.70, well below consensus of $3.20.
Dec E-mini S&Ps (ESZ15 +0.65%) this morning are up +8.75 points (+0.44%). Tuesday's closes: S&P 500 -0.36%, Dow Jones +0.08%, Nasdaq -0.57%. The S&P 500 on Tuesday closed lower on the IMF's cut its global growth forecast for 2015 to 3.1% from July's estimate of 3.3% and for 2016 to 3.6% from July's 3.8%. In addition, there was weakness in health-care companies after Celgene and Vertex Pharmaceuticals both lost more than 5%. On the positive side, energy producers rose as crude oil prices climbed to a 1-month high.
Dec 10-year T-notes (ZNZ15-0.19%) this morning are down -8 ticks. Tuesday's closes: TYZ5 +6.50, FVZ5 +2.75. Dec T-note prices on Tuesday settled higher on weakness in stocks, which boosted the safe-haven demand for T-notes, and on global growth concerns that may further delay a Fed interest rate increase after the IMF cut its 2015/16 global GDP estimates.
The dollar index (DXY00 +0.02%) this morning is up +0.030 (+0.03%). EUR/USD (^EURUSD) is down -0.0012 (-0.11%). USD/JPY (^USDJPY) is down-0.14 (-0.12%). Tuesday's closes: Dollar Index -0.651 (-0.68%), EUR/USD +0.0084 (+0.75%), USD/JPY -0.23 (-0.19%). The dollar index on Tuesday closed lower on continued negative carryover from last Friday's weaker-than-expected U.S. Sep payroll report that pushed back expectations for a Fed interest rate increase from this year to Q1-2016. EUR/USD received a boost on reduced expectations of additional ECB stimulus after ECB Governing Council member Liikanen said speculation of additional ECB easing is "premature."
Nov crude oil (CLX15 +1.94%) this morning is up +80 cents (+1.65%) at a 2-week high and Nov gasoline (RBX15 +0.34%) is up +0.0011 (+0.08%). Tuesday's closes: CLX5 +2.27 (+4.91%), RBX5 +0.0411 (+2.97%). Nov crude oil and gasoline on Tuesday climbed to 1-month highs and settled sharply higher on a weaker dollar and on reduced U.S. crude production after the U.S. Energy Department in its Short-Term Energy Outlook said U.S. Sep crude output was down -120,000 bpd. Crude oil prices continue to see strength from Middle East tensions after at least one Russian fighter jet on Monday violated Turkish/NATO air space.
GLOBAL EVENT CALENDAR10/07/2015
Weekly MBA mortgage applications, previous -6.7% with purchase sub-index -5.6% and refi sub-index -7.5%.
EIA Weekly Petroleum Status Report.
Treasury auctions $21 billion of 10-year T-notes.
San Francisco Fed President John Williams speaks at the Gonzaga University School of Business Administration.
Aug consumer credit expected +$19.500 billion, Jul +$19.097 billion.
Japan Aug leading index CI expected -1.6 to 103.4, Jul 105.0. Aug coincident index expected -0.8 to 112.3, Jul 113.1.
Japan Aug machine orders expected +2.3% m/m and +3.5% y/y, Jul -3.6% m/m and +2.8% y/y.
BOJ announces interest rate decision followed by a press conference with BOJ Governor Haruhiko Kuroda.
German Aug industrial production expected +0.2% m/m and +3.3% y/y, Jul +0.7% m/m and +0.5% y/y.
UK Aug industrial production expected +0.3% m/m and +1.2% y/y, Jul -0.4% m/m and +0.8% y/y.
UK Aug manufacturing production expected +0.3% m/m and -0.2% y/y, Jul -0.8% m/m and -0.5% y/y.
UK Sep NIESR GDP estimate, Aug +0.5% q/q.
UK Sep RICS house price balance expected 55%, Aug 53%.
U.S. STOCK CALENDAR10/07/2015
RPM International Inc
Q1 2016 Earnings Release
Constellation Brands Inc
Q2 2016 Earnings Release
Q4 2015 Earnings Release
Global Payments Inc
Q1 2016 Earnings Release
Acuity Brands Inc
Q4 2015 Earnings Release
Business Update Call
Global Payments Inc
Q1 2016 Earnings Call
Investor & Analyst Meeting
Flowers Foods Inc
Acquisitions of Daves Killer Bread and Alpine Valley Bread By Flowers Foods