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OVERNIGHT MARKETS AND NEWS
March E-mini S&Ps (ESH16 +0.75%) are up +0.32% as global stocks attempt to recover after China took steps to alleviate market stress. The PBOC set a higher reference rate for the yuan today, the first time it has done so in the last nine sessions, which strengthened the yuan against the dollar. U.S. stocks fell back from their best levels after crude oil erased an overnight rally and is now lower by -0.27%. European stocks are down -0.55% after German Nov industrial production unexpectedly declined. Asian stocks settled mixed: Japan -0.39%, Hong Kong +0.59%, China +1.97%, Taiwan +0.53%, Australia -0.39%, Singapore +0.78%, South Korea +0.75%, India +0.33%. China's Shanghai Composite rebounded from a 3-1/4 month low and closed higher after the government suspended a circuit-breaker system that had halted Chinese equity trading on Monday and Thursday when stock losses reached -7%. Chinese stocks also found support on signs that state-controlled funds were said to be buying equities.
The dollar index (DXY00 +0.54%) is up +0.50%. EUR/USD (^EURUSD) is down -0.56%. USD/JPY (^USDJPY) is up +0.53%.
Mar T-note prices (ZNH16-0.17%) are down -6 ticks.
ECB Governing Council member Lane said "no door has been closed" in relation to QE, even as there's "plenty of evidence" that the ECB's sovereign-debt purchase program is working.
German Nov industrial production of -0.3% m/m and +0.1% y/y was weaker than expectations of +0.5% m/m and +0.5% y/y.
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) Dec non-farm payrolls (expected +200,000, Nov +211,000) and Dec unemployment rate (expected unch at 5.0%, Nov unch at 5.0%), (2) Nov wholesale trade sales (expected unch m/m, Oct unch m/m) and Nov wholesale inventories (expected -0.1% m/m, Oct -0.1% m/m), (3) San Francisco Fed President John Williams' speech on the economic outlook to the California Association of Bankers in Santa Barbara, CA, (4) Richmond Fed President Jeffrey Lacker's comments on his 2016 economic outlook to the Maryland Bankers Association, and (5) Nov consumer credit (expected +$18.5 billion, Oct +$15.982 billion).
There are 2 of the Russell 3000 companies that report earnings today: Acuity Brands (consensus $1.58), Global Payments (0.75).
U.S. IPO's scheduled to price today: none.
Equity conferences today: none.
OVERNIGHT U.S. STOCK MOVERS
Foot Locker (FL-1.21%) was upgraded to 'Buy' from 'Neutral' at Bank of America.
Dupont (DD-2.97%) was upgraded to 'Outperform' from Market Perform' at Bernstein who also raised their price target on the stock to $81 from $71.
Williams-Sonoma (WSM +1.47%) was downgraded to 'Neutral' from 'Buy' at Buckingham Research Group.
Five Below (FIVE-0.18%) gained over 2% in after-hours trading after it raised guidance on Q4 sales to $323 million-$326 million from a December outlook of $318 million-$323 million, above estimates of $320 million.
Helen of Troy (HELE-1.34%) climbed over 3% in after-hours trading after it reported Q3 adjusted EPS of $2.07, higher than consensus of $1.93.
Freeport-McMoRan (FCX-9.08%) was downgraded to 'Neutral' from 'Outperform' at Macquarie.
Synnex (SNX-2.15%) reported Q4 adjusted EPS of $1.80, stronger than consensus of $1.75, but then lowered guidance on Q1 adjusted EPS to $1.34-$1.39, below consensus of $1.54.
The Gap (GPS +5.73%) slipped over 6% in after-hours trading after it reported December comparable same-store-sales fell -5.0% y/y, a bigger decline than expectations of -3.9% y/y.
Container Store Group (TCS-5.15%) slumped over 10% in after-hours trading after it reported an unexpected Q3 adjusted EPS loss of -4 cents, weaker than consensus of a 5 cent profit, and then lowered guidance on Q4 EPS to 19 cents-22 cents, well below consensus of 29 cents.
Alcoa (AA-3.95%) said it will close an aluminum smelter in Evansville, IN and curtail capacity at its Point Comfort, TX refinery to increase the competitiveness of its upstream business.
Suppliers of Apple products fell in after-hours trading with Skyworks Solutions (SWKS-2.88%) and Invensense (INVN-0.32%) down 3%, Avago Technologies (AVGO-3.18%) down 5%, and NXP Semiconductors (NXPI-5.41%) and Broadcom (BRCM-1.57%) both down 2% after Cirrus Logic and Qorvo blamed weakness in mobile products for their slowdown in revenue growth.
Cirrus Logic (CRUS unch) tumbled over 8% in after-hours trading after it reported Q3 preliminary revenue of $347 million, below consensus of $386 million.
Qorvo (QRVO +2.29%) lowered guidance on Q3 revenue to $629 million from a prior estimate of $720 million-$730 million, well below consensus of $723.8 million.
Mar E-mini S&Ps (ESH16 +0.75%) this morning are up +6.25 points (+0.32%). Thursday's closes: S&P 500 -2.37%, Dow Jones -2.32%, Nasdaq -3.11%. The S&P 500 on Thursday sank to a 3-month low and closed sharply lower on carry-over weakness from the -7% plunge in the Chinese stock market, the Chinese government's eighth day of devaluing the yuan, and weakness in energy and raw-material producers after crude oil fell to a 12-year low and copper slumped to a 6-1/2 year low. Stocks recovered from their worst levels on speculation Chinese markets may stabilize after China's regulator suspended circuit breakers that had halted stock trading in China twice this week once losses reached 7%.
Mar 10-year T-notes (ZNH16-0.17%)this morning are down -6 ticks. Thursday's closes: TYH6 +8.00, FVH6 +6.75. Mar-T-notes on Thursday climbed to a 2-month high on (1) increased safe-haven demand with the sharp sell-off in global equity markets, and (2) speculation that the financial turmoil in China will delay the Fed's next rate hike. T-notes fell back from their best levels as stocks recovered from their lows on speculation Chinese stock markets may stabilize after China's regulator suspended a circuit breaker that had halted stock trading twice this week.
The dollar index (DXY00 +0.54%) this morning is up +0.494 (+0.50%). EUR/USD (^EURUSD) is down -0.0061 (-0.56%). USD/JPY (^USDJPY) is up +0.62 (+0.53%). Thursday's closes: Dollar Index -0.962 (-0.97%), EUR/USD +0.0151 (+1.40%), USD/JPY -0.80 (-0.68%). The dollar index on Thursday closed lower on speculation that this week's sell-off in global equity markets may prompt the Fed to delay the next interest rate increase. In addition, USD/JPY fell to a 4-1/2 month low as the sell-off in global equity markets boosted the safe-haven demand for the yen.
Feb crude oil (CLG16 +0.72%) this morning is down -9 cents (-0.27%) and Feb gasoline (RBG16 +0.35%) is down -0.0067 (-0.58%). Thursday's closes: CLG6 -0.71 (-2.09%), RBG6 -0.0122 (-1.05%). Feb crude oil and gasoline on Thursday closed lower with Feb crude at a 12-year nearest-futures low and Feb gasoline at a 6-3/4 year low. Energy prices were undercut by the slump in global stock markets and by negative carryover from Wednesday’s EIA inventory report that showed a +917,000 bbl increase in crude supplies at Cushing to a record high of 63.91 million bbl and a +10.58 million bbl surge in weekly EIA gasoline inventories to a 9-1/2 month high. Prices recovered from their worst levels on as the dollar moved lower.
GLOBAL EVENT CALENDAR01/08/2016
Dec non-farm payrolls expected +200,000, Nov +211,000. Dec private payrolls expected +200,000, Nov +197,000. Dec manufacturing payrolls expected unch, Nov -1,000. Dec unemployment rate expected unch at 5.0%, Nov unch at 5.0%.
Dec avg hourly earnings expected +0.2% m/m and +2.8% y/y, Nov +0.2% m/m and +2.3% y/y. Dec avg weekly hours all employees expected unch at 34.5 hours.
Nov wholesale trade sales expected unch m/m, Oct unch m/m. Nov wholesale inventories expected -0.1% m/m, Oct -0.1% m/m.
San Francisco Fed President John Williams speaks on the economic outlook to the California Association of Bankers in Santa Barbara, CA.
Richmond Fed President Jeffrey Lacker delivers his 2016 economic outlook to the Maryland Bankers Association.
Nov consumer credit expected +$18.5 billion, Oct +$15.982 billion.
Japan Nov leading index CI expected -0.3 to 103.9, Oct 104.2. Nov coincident index expected -1.6 to 111.6, Oct 113.3.
German Nov industrial production expected +0.5% m/m and +0.5% y/y, Oct +0.2% m/m and unch y/y.
German Nov trade balance expected +20.2 billion euros, Oct +22.3 billion euros. Nov exports expected +0.5% m/m, Oct -1.3% m/m. Nov imports expected +1.0% m/m, Oct -3.3% m/m.
China Dec CPI expected +1.6% y/y, Nov +1.5% y/y. Dec PPI expected -5.8% y/y, Nov -5.9% y/y.