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OVERNIGHT MARKETS AND NEWS
Jun E-mini S&Ps (ESM16 +0.06%) are down -0.10% and European stocks are down -0.16% ahead of the minutes of the Apr 26-27 FOMC meeting. The minutes take on extra importance after stocks fell yesterday on hawkish Fed commentary. Atlanta Fed President Lockhart said that "currently my assumption is two, possibly three" Fed rate hikes this year and San Francisco Fed President Williams said that "gradual means two to three rate increases this year." Another negative for equities is weakness in mining stocks as the price of copper (HGN16-1.34%) falls -1.60% to a 3-month low. On the positive side, Lowe's is up 3% in pre-market trading after it reported stronger-than-expected Q1 EPS and Tesla is up 3% after Goldman Sachs raised its recommendation on the stock to a 'Buy.' Asian stocks settled mostly lower: Japan -0.05%, Hong Kong -1.45%, China -1.27%, Taiwan +0.24%, Australia -0.74%, Singapore -0.14%, South Korea -0.50%, India -0.27%. Asian stocks retreated as better-than-expected economic data on China Apr new home prices and Japan Q1 GDP reduces the need for additional central bank stimulus measures.
The dollar index (DXY00 +0.19%) is up +0.20% at a 3-week high. EUR/USD (^EURUSD) is down -0.34% at a 3-week low. USD/JPY (^USDJPY) is up +0.24%.
Jun T-note prices (ZNM16-0.16%) are down -6.5 ticks at a 2-week low.
China Apr new home prices rose in 65 cities out of 70 tracked by the government, up from 62 in Mar and the most in 2-1/3 years.
ECB Governing Council member Vasiliauskas said he doesn't expect any "big changes" to ECB staff economic projections in June and said there is "no need" to discuss QE expansion for now.
Japan Q1 GDP grew +1.7% (q/q annualized), much stronger than expectations of +0.3% (q/q annualized). The Q1 GDP deflator rose +0.9% y/y, weaker than expectations of +1.0% y/y and the slowest pace of increase in 2 years.
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) weekly MBA mortgage applications (previous +0.4% with purchase sub-index +0.4% and refi sub-index +0.5%), (2) minutes of the Apr 26-27 FOMC meeting, and (3) EIA Weekly Petroleum Status Report.
There are 9 of the S&P 500 companies that report earnings today: Target (consensus $1.19), Hormel Foods (0.39), Analog Devices (0.63), L Brands (0.55), Cisco Systems (0.55), Urban Outfitters (0.25), salesforce.com (0.23), Lowes (0.85), Staples (0.16).
U.S. IPO's scheduled to price today: Merus BV (MRUS).
Equity conferences today: Electrical Products Group Investor Conference on Mon-Wed, Goldman Sachs Basic Materials Conference on Tue-Wed, Barclays Americas Select Franchise Conference on Tue-Wed, CBI's Life Sciences IT Governance and Cybersecurity Summit on Tue-Wed, Barclays Insurance Forum on Wed, MoffettNathanson Media and Communications Conference on Wed, BMO Capital Markets Farm to Market Conference on Wed-Thu, Citi Car of the Future Symposium on Thu, ITG Global Industrials Conference on Thu, Needham Emerging Technology Conference Thu, Business Analytics Innovation Summit on Thu-Fri, Medical Affairs Summit on Fri.
OVERNIGHT U.S. STOCK MOVERS
Scripps Networks Interactive (SNI +0.36%) was downgraded to 'Sell' from 'Neutral' at Citigroup with a price target of $62.
Lowe's (LOW-1.21%) rose 3% in pre-market trading after it reported Q1 adjusted EPS of 87 cents, higher than consensus of 85 cents.
Tesla (TSLA-1.74%) gained 3% in pre-market trading after it was upgraded to 'Buy' from 'Neutral' at Goldman Sachs.
Host Hotels & Resorts (HST-0.90%) was upgraded to 'Market Perform' from 'Underperform' at Raymond James.
The Children's Place (PLCE +4.13%) was upgraded to 'Buy' from 'Neutral' at Goldman Sachs with a price target of $74.
Brocade Communications Systems (BRCD +0.25%) was rated a new 'Buy' at Bank of America Merrill Lynch with a price target of $10.
Valeant Pharmaceuticals (VRX +7.50%) said it is exploring the sale of some of its cosmetic and pharmaceutical assets to reduce some of its debt.
Acxion (ACXM-1.93%) dropped over 6% in after-hours trading after it lowered guidance on fiscal 2017 adjusted EPS to 55 cents to slightly higher, below consensus of 65 cents.
Dynagas LNG Partners (DLNG +0.38%) reported Q1 adjusted EPS/unit 48 cents, higher than consensus of 45 cents.
Allegheny Technologies (ATI unch) fell over 1% in after-hours trading after it announced plans for a convertible offering of senior notes.
Vipshop Holdings Ltd. (VIPS-1.05%) slumped nearly 10% in after-hours trading after it said its sees Q2 revenue of 12.3 billion yuan-12.8 billion yuan, below consensus of 12.81 billion yuan.
Andersons Inc. (ANDE-2.22%) surged nearly 20% in after-hours trading after HC2 Holdings offered to acquire the company for $37 a share, well above Tuesday's closing price of $25.94.
June E-mini S&Ps (ESM16 +0.06%) this morning are down -2.00 points (-0.10%). Tuesday's closes: S&P 500 -0.94%, Dow Jones -1.02%, Nasdaq-1.32%. The S&P 500 on Tuesday closed lower on concern that the Fed may raise interest rates sooner rather than later after U.S. Apr CPI rose +0.4% m/m (stronger than expectations of +0.3% m/m and the largest increase in 3 years) and the hawkish comment from San Francisco Fed President Williams that it "makes sense" for 2-3 Fed rate hikes this year. Stocks were supported by optimism about the economy after the +0.7% increase in U.S. Apr industrial production (stronger than expectations of +0.3% and the biggest gain in 17 months) and the +6.6% rise in Apr housing starts to 1.172 million (stronger than expectations of +3.3% to 1.125 million).
June 10-year T-note prices (ZNM16-0.16%) this morning are down -6.5 ticks at a 2-week low. Tuesday's closes: TYM6 -14.50, FVM6 -8.75. Jun T-notes on Tuesday posted a 1-1/2 week low and closed lower on the stronger-than-expected Apr housing starts, Apr CPI, and Apr industrial production reports. There were also increased inflation expectations after the 10-year T-note breakeven rate rose to a 2-week high. T-notes received underlying support from safe-haven demand as equities sold off.
The dollar index (DXY00 +0.19%) this morning is up +0.284 (+0.30%) at a 3-week high. EUR/USD (^EURUSD) is down -00038 (-0.34%) at a 3-week low. USD/JPY (^USDJPY) is up +0.26 (+0.24%). Tuesday's closes: Dollar Index -0.024 (-0.03%), EUR/USD -0.0008 (-0.07%), USD/JPY +0.11 (+0.10%). The dollar index on Tuesday closed lower on strength in the currencies of the crude-producing countries of Russia and Canada after the price of crude oil rose to a 7-month high. The dollar failed to receive much of a boost from the sharp increase in expectations for a Fed rate hike this year after the strong U.S. economic reports and the hawkish comments by two Fed officials.
June WTI crude oil (CLM16 +0.06%) this morning is up +16 cents (+0.33%). June gasoline (RBM16-0.04%) is up +0.0003 (+0.02%). Tuesday's closes: CLM6 +0.59 (+1.24%), RBM6 +0.0278 (+1.73%). Jun crude oil and gasoline on Tuesday closed higher with Jun crude at a 7-month high. Crude oil prices were boosted by a weaker dollar and by expectations that Wednesday's weekly EIA data will show that U.S. crude inventories fell -3.5 million bbl and gasoline supplies declined by -1.25 million bbl.
GLOBAL EVENT CALENDAR05/18/2016
Weekly MBA mortgage applications, previous +0.4% with purchase sub-index +0.4% and refi sub-index +0.5%.
EIA Weekly Petroleum Status Report.
Minutes of the Apr 26-27 FOMC meeting.
UK Apr jobless claims change expected +5,000, Mar +6,700. Apr claimant count rate expected unch at 2.1%.
UK Mar avg weekly earnings expected +1.7% 3-mo avg y/y, Feb +1.8% 3-mo avg y/y. Mar avg weekly earnings ex-bonus expected +2.3% 3-mo avg y/y, Feb +2.2% 3-mo avg y/y.
UK Mar ILO unemployment rate expected unch at 5.1% 3-months through Mar, previous 5.1% 3-months through Feb.