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OVERNIGHT MARKETS AND NEWS
Jun E-mini S&Ps (ESM16 +0.12%) are up +0.13% and European stocks are up +0.08% as energy producing stocks strengthen with the price of crude oil (CLN16 +0.67%) up +0.67% at a fresh 7-1/2 month high. Increased M&A activity is giving stocks a boost as well with Yahoo up nearly 4% in pre-market trading after people familiar with the matter said AT&T made a bid for the company. Mining stocks also rallied, with Arcelor Mittal and Anglo American Plc both up more than 4.5%, as the price of copper (HGN16 +0.55%) is up +0.62% at a 2-week high. Gains in European stocks were limited by weakness in bank stocks, as Banco Popular Espanol SA plunged -20% after it said it will raise about 2.5 billion euros ($2.79 billion) by selling new shares. Asian stocks settled mostly higher: Japan +0.09%, Hong Kong +0.14%, China +0.26%, Taiwan -0.02%, Australia+0.29%, Singapore +0.24%, South Korea -0.14%, India +1.88%.
The dollar index (DXY00-0.13%) is down -0.16%. EUR/USD (^EURUSD) is up +0.21%. USD/JPY (^USDJPY) is down -0.19%.
Jun T-note prices (ZNM16-0.01%) are little changed, down -0.5 of a tick.
Speaking in Singapore, St. Louis Fed President Bullard (voter) said that market expectations for a June interest rate hike are "substantially positive" and that the FOMC can vary the rate rise pace depending on the world and the U.S.
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) St. Louis Fed President James Bullard (voter) delivers a presentation to the Official Monetary and Financial Institutions Forum in Singapore, (2) weekly initial unemployment claims (expected -3,000 to 275,000, previous -16,000 to 278,000) and continuing claims (expected -12,000 to 2.140 million, previous -13,000 to 2.152 million), (3) Apr durable goods orders (expected +0.5% and +0.3% ex-transportation, Mar +0.8% and -0.2% ex-transportation), (4) Apr pending home sales (expected +0.7% m/m and +0.1% y/y, Mar +1.4% m/m and +2.9% y/y), (5) May Kansas City Fed manufacturing activity (expected +1 to -3, Apr +2 to -4), (6) Fed Governor Jerome Powell discusses “Recent Economic Developments, the Productive Potential of the Economy, and Monetary Policy” at the Peterson Institute for International Economics in Washington D.C., (7) the Treasury's auction of $28 billion of 7-year T-notes, and (8) USDA weekly Export Sales.
There are 5 of the S&P 500 companies that report earnings today: Dollar Tree (consensus $0.81), Patterson Cos (0.75), Signet Jewelers (1.94), Ulta Salon (1.29), Dollar General (0.95).
U.S. IPO's scheduled to price today: none.
Equity conferences during the remainder of this week include: none.
OVERNIGHT U.S. STOCK MOVERS
Yahoo! (YHOO-5.17%) rose nearly 4% in pre-market trading after people familiar with the matter said AT&T made a bid for the company.
HP Inc. (HPQ +2.43%) gained 2% in European trading after it reported Q2 adjusted EPS continuing operations of 41 cents, better than consensus of 38 cents.
Williams-Sonoma (WSM +2.40%) climbed over 3% in after-hours trading after it reported Q1 adjusted EPS of 53 cents, higher than consensus of 50 cents.
NetApp (NTAP +1.23%) sank nearly 8% in after-hours trading after it reported Q4 adjusted EPS of 55 cents, weaker than consensus of 58 cents, and said it sees Q1 adjusted EPS of 34 cnts-30 cents, below consensus of 45 cents
PVH (PVH +0.91%) climbed over 6% in after-hours trading after it reported Q1 adjusted EPS of $1.50, higher than consensus of $1.43, and then raised guidance on full-year adjusted EPS to $6.45-$6.55 from a March 23 view of $6.30-$6.50.
Infoblox (BLOX +0.87%) lost over 3% in after-hours trading after it said it sees Q4 adjusted EPS of 5 cents-7 cents, below consensus of 7 cents.
Guess? (GES +1.17%) fell nearly 2% in after-hours trading after it lowered guidance on full-year adjusted EPS to 55 cents-75 cents from a March 16 estimate of 65 cents-85 cents, below consensus of 77 cents,
Trinity Industries (TRN +4.63%) gained almost 1% in after-hours trading after it reported a new $940 million order for wind towers.
CSRA (CSRA +0.79%) lost nearly 1% in after-hours trading after it reported Q4 adjusted EPS of 50 cents, better than consensus of 48 cents, but Q4 revenue of $1.29 billion was below consensus of $1.31 billion.
The Rubicon Project (RUBI +1.53%) slipped 3% in after-hours trading after CFO Todd Tappin resigned to assume the role of president at another company.
WebMD Health (WDMD) dropped over 4% in after-hours trading after it announced that it will offer $300 million of convertible notes due 2023 in a private placement.
Popeyes Louisiana Kitchen (PLKI-0.46%) slid nearly 7% in after-hours trading after it reported Q1 adjusted EPS of 58 cents, below consensus of 64 cents.
Lions Gate Entertainment (LGF +0.20%) jumped over 13% in after-hours trading after it reported Q4 adjusted EPS of 26 cents, well above consensus of 2 cents.
Pure Storage (PSTG +1.10%) tumbled 15% in after-hours trading after it reported that its Q1 operating margin dropped -45.6% versus -28.6% q/q.
Cempra (CEMP +3.43%) climbed nearly 5% in after-hours trading after it said its solithromycin had successful results in its Phase 2 study of community-acquire bacterial pneumonia conducted by Japanese partner Toyama Chemical.
Paragon Shipping (PRGN-0.63%) plunged nearly 50% in after-hours trading after it received a notice of non-compliance from NASDAQ because the company's stockholders' equity as of Dec 31, 2015 was below the $2.5 million requirement. Therefore, the company no longer meets requirement for the NASDAQ and will have to transfer its listing to the OTC market.
June E-mini S&Ps (ESM16 +0.12%) this morning are up +2.75 points (+0.13%). Wednesday's closes: S&P 500 +0.70%, Dow Jones +0.82%, Nasdaq +0.72%. The S&P 500 on Wednesday rose to a 3-week high and closed higher on strength in energy producers after crude oil rallied to a 7-1/2 month high and on increased M&A activity after HP rallied by +9% after it said it will merge its enterprise-services division with Computer Sciences Corp. Stocks were undercut by the unexpected -1.6 point decline in the May Markit U.S. services PMI index to 51.2, weaker than expectations of +0.2 to 53.0.
June 10-year T-note prices (ZNM16-0.01%) this morning are down -0.5 of a tick. Wednesday's closes: TYM6 -3.00, FVM6 -1.00. Jun T-notes on Wednesday closed lower on supply pressures as the Treasury auctioned $47 billion of 5-year T-notes and 2-year floating rate notes and on reduced safe-haven demand after the S&P 500 climbed to a 3-week high. T-notes found support from the unexpected -1.6 point decline in the May Markit U.S. services PMI index.
The dollar index (DXY00-0.13%) this morning is down -0.150 (-0.16%). EUR/USD (^EURUSD) is up +0.0023 (+0.21%). USD/JPY (^USDJPY) is down-0.21 (-0.19%). Wednesday's closes: Dollar Index -0.217 (-0.23%), EUR/USD +0.0014 (+0.13%), USD/JPY +0.20 (+0.18%). The dollar index on Wednesday closed lower on the unexpected decline in the U.S. May Markit services PMI index, which was a sign of economic weakness that may give the Fed pause on raising interest rates. The dollar was also undercut by strength in EUR/USD after the German May IFO business climate index rose to a 5-month high.
July WTI crude oil (CLN16 +0.67%) this morning is up +33 cents (+0.67%) at a fresh 7-1/2 month high. July gasoline (RBN16 +0.14%) is up +0.0042 (+0.25%). Wednesday's closes: CLN6 +0.94 (+1.93%), RBN6 -0.0086 (-0.52%). July crude oil and gasoline on Wednesday settled mixed with July crude at a 7-1/2 month high. Crude oil prices were boosted by the -4.23 million bbl decline in weekly EIA crude inventories, more than expectations of-2.0 million bbl. Crude oil prices were also boosted by the -0.3% decline in U.S. crude production in the week ended May 20 to a 1-1/2 year low of 8.767 million bpd. Gasoline closed lower after weekly EIA gasoline stockpiles unexpectedly rose +2.04 million bbl, more than expectations of -1.5 million bbl.
GLOBAL EVENT CALENDAR05/26/2016
St. Louis Fed President James Bullard (voter) delivers a presentation to the Official Monetary and Financial Institutions Forum in Singapore.
Weekly initial unemployment claims expected -3,000 to 275,000, previous -16,000 to 278,000. Weekly continuing claims expected-12,000 to 2.140 million, previous -13,000 to 2.152 million.
Apr durable goods orders expected +0.5% and +0.3% ex transportation, Mar +0.8% and -0.2% ex transportation. Apr capital goods orders non-defense ex-aircraft expected +0.3%, Mar +0.1%
USDA weekly Export Sales.
Apr pending home sales expected +0.7% m/m and +0.1% y/y, Mar +1.4% m/m and +2.9% y/y
May Kansas City Fed manufacturing activity expected +1 to -3, Apr +2 to -4.
Fed Governor Jerome Powell will discuss Recent Economic Developments, the Productive Potential of the Economy, and Monetary Policy at the Peterson Institute for International Economics in Washington D.C.
Treasury auctions $28 billion of 7-year T-notes.
Revised UK Q1 GDP, previous +0.4% q/q and +2.1% y/y.
UK Mar index of services expected +0.2% m/m and +0.6% 3-mo/3-mo, Feb +0.1% m/m and +0.7% 3-mo/3-mo.
UK Q1 total business investment, Q4 -2.0% q/q and +3.0% y/y.
UK May GfK consumer confidence expected -1 to -4, Apr -3 to -3.
Japan Apr national CPI expected -0.4% y/y, Mar -0.1% y/y. Apr national CPI ex-fresh food expected -0.4% y/y, Mar -0.3% y/y. Apr national CPI ex food & energy expected +0.7% y/y, Mar +0.7% y/y.
Japan May Tokyo CPI expected -0.5% y/y, Apr -0.4% y/y. May Tokyo CPI ex-fresh food expected -0.4% y/y, Apr -0.3% y/y. May Tokyo CPI ex food & energy expected +0.6% y/y, Apr +0.6% y/y.