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OVERNIGHT MARKETS AND NEWS
Sep E-mini S&Ps (ESU16 unch) are little changed, up +0.03%, and European stocks are down -0.85% on increased chances of a Fed rate hike this year after hawkish Fed comments last Friday at the Fed's annual symposium in Jackson Hole, WY. The outlook for a near-term Fed rate hike has boosted the dollar and undercut commodity prices. Crude oil (CLV16-1.34%) is down -1.34%, which has drug down energy producing stocks, while gold prices (GCZ16-0.21%) are down -0.37% at a 2-month low, which has pushed mining stocks lower. Asian stocks settled mixed: Japan +2.30%, Hong Kong -0.38%, China-0.01%, Taiwan -0.24%, Australia -0.84%, Singapore -0.99%, South Korea +0.10%, India +0.43%. Japanese stocks rose as the Nikkei stock index climbed to a 1-1/2 week high after USD/JPY jumped to a 2-1/2 week high when BOJ Governor Kuroda said the BOJ "will act decisively as we move on." The rally in USD/JPY boosted the outlook for exporters, with Toyota Motor and Mazda Motor up over 4%.
The dollar index (DXY00 +0.17%) is up +0.08% at a 2-week high. EUR/USD (^EURUSD) is down -0.15% at a 2-week low. USD/JPY (^USDJPY) is up +0.33% at a 2-1/2 week high.
Sep T-note prices (ZNU16 +0.11%) are up +3.5 ticks as they recover from a 2-month low posted in overnight trade.
ECB Executive Board member Coeure said "we may see short-term rates being pushed to the effective lower bound more frequently in the event of macroeconomic shocks" if governments don't act to boost the growth potential of Eurozone economies.
BOJ Governor Kuroda said "the BOJ will act decisively as we move on" and the "zero bound is no longer insurmountable" as a policy constraint "in practice." He said the current rate is "still far from such a lower bound" and that will carefully consider how to make the best use of the policy scheme in order to achieve the price stability target.
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) Jul personal spending (expected +0.3%, Jun +0.4%) and Jul personal income (expected +0.4%, Jun +0.2%), (2) Jul PCE deflator (expected unch m/m and +0.8% y/y, Jun +0.1% m/m and +0.9% y/y) and Jul core PCE deflator (expected +0.1% m/m and +1.5% y/y, Jun +0.1% m/m and +1.6% y/y), (3) Aug Dallas Fed manufacturing index (expected -1.7 to -3.0, Jul -1.3), (4) USDA weekly grain export inspections, and (5) USDA Weekly Crop Progress.
Russell 1000 companies that report earnings today: none.
U.S. IPO's scheduled to price today: none.
Equity conferences today: European Society of Cardiolog Meeting on Mon-Tue, 2016 Farm Progress Show on Mon-Wed, Longbow Industrial Manufacturing & Technology Conference on Tue, Simmons European Energy Conference on Tue-Wed, Jefferies LLC Semiconductor, Hardware and Communications Infrastructure Summit on Wed.
OVERNIGHT U.S. STOCK MOVERS
Federal Realty Investment Trust (FRT-0.28%) was upgraded to 'Buy' from 'Neutral' at Mizuho Securities USA with a 12-month target price of $176.
At Home Group (HOME unch) was rated a new 'Buy' at Jeffries with a 12-month target price of $20.
T-Mobile (TMUS-0.69%) was upgraded to 'Outperform' from 'Market Perform' at Wells Fargo Securities.
KeyCorp (KEY +0.49%) was downgraded to 'Neutral' from 'Overweight' at Piper Jaffray.
Harley-Davidson (HOG-1.26%) was downgraded to 'Underperform' from 'Neutral' at Longbow Research with a 12-month target price of $40.
Post Properties (PPS-0.72%) was upgraded to 'Outperform' from 'Market Perform' at Raymond James with a 12-month price target of $72.50.
Netflix (NFLX +0.27%) was rated a new 'Sell' at Axiom Capital with a target price of $80.
Herbalife (HLF-2.31%) climbed over 3% in pre-market trading after Carl Icahn said he bought 2.3 million shares of Herbalife on Friday and now holds 19.3 million shares of the stock.
Caesers Entertainment Corp. (CZR-0.40%) tumbled 10% in after-hours trading after U.S. Bankruptcy Judge Goldgar ruled that Caesers must face bondholder lawsuits demanding that Caesers honors $11 billion in guarantees.
Tidewater (TDW +0.97%) rose over 3% in after-hours trading after Robert Robotti increased his stake in the company from 2.2% to 6%.
Adamis Pharmaceuticals (ADMP +25.27%) jumped over 6% in after-hours trading after the company said it is targeting a year-end submission to the FDA for its prefilled syringe that would be a "low-cost" alternative to Mylan's EpiPen.
Sep E-mini S&Ps (ESU16 unch) this morning are up +0.75 of a point (+0.03%). Friday's closes: S&P 500 -0.16%, Dow Jones -0.29%, Nasdaq +0.17%. The S&P 500 on Friday fell to a 3-week low and closed lower on Fed Vice Chair Fischer's statement that Fed Chair Yellen's upbeat comments on the U.S. economy leave open the possibility of a Fed rate hike at next month's FOMC meeting. Stocks were also undercut by the unexpected -0.6 point decline in the U.S. Aug University of Michigan consumer sentiment to a 4-month low of 89.8, weaker than expectations of +0.4 to 90.8.
Sep 10-year T-notes (ZNU16 +0.11%) this morning are up +3.5 ticks. Friday's closes: TYU6 -22.00, FVU6 -14.25. Sep T-notes on Friday retreated from a 1-week high and closed lower on Fed Vice Chair Fischer's statement that Fed Chair Yellen's upbeat comments on the U.S. economy leave open the possibility of a Fed rate hike next month. T-notes were also undercut by the rise in the 10-year T-note breakeven inflation expectations rate to a 2-week high. T-notes found a little support after Fed Chair Yellen reassured market participants that policy makers "anticipate that gradual increases in the federal funds rate will be appropriate over time."
The dollar index (DXY00 +0.17%) this morning is up +0.074 (+0.08%) at a 2-week high. EUR/USD (^EURUSD) is down -0.0017 (-0.15%) at a 2-week low. USD/JPY (^USDJPY) is up +0.34 (+0.33%) at a 2-1/2 week high. Friday's closes: Dollar index +0.794 (+0.84%), EUR/USD -0.0087 (-0.77%), USD/JPY +1.31 (+1.30%). The dollar index on Friday rallied to a 1-week high and closed higher on Fed Chair Yellen's comment that the case for a U.S rate hike has "strengthened in recent months." In addition, Fed Vice Chair Fischer said that Fed Chair Yellen's comments on the economy are consistent with a possible Fed rate hike next month.
Oct crude oil (CLV16-1.34%) this morning is down -64 cents (-1.34%) and Oct gasoline (RBV16-1.37%) is down -0.0193 (-1.35%). Friday's closes: CLV6 +0.31 (+0.65%), RBV6 +0.0047 (+0.33%). Oct crude oil and gasoline on Friday closed higher with Oct gasoline at a 1-3/4 month high. Crude oil prices were boosted by upbeat comments by Fed Chair Yellen on the U.S. economy and by a report from Iran's Press TV that Yemen fired missiles at Saudi Aramco oil facilities in the Jizan region of Saudi Arabia. Crude oil prices were undercut by rise in the dollar index to a 1-week high.
GLOBAL EVENT CALENDAR08/29/2016
Monday, Aug 29
Jul personal spending expected +0.3%, Jun +0.4%. Jul personal income expected +0.4%, Jun +0.2%.
Jul PCE deflator expected unch m/m and +0.8% y/y, Jun +0.1% m/m and +0.9% y/y. Jul core PCE deflator expected +0.1% m/m and +1.5% y/y, Jun +0.1% m/m and +1.6% y/y.
Aug Dallas Fed manufacturing outlook level of general business activity expected -1.7 to -3.0, Jul -1.3.
USDA weekly grain export inspections.
USDA Weekly Crop Progress.
Tuesday, Aug 30
Jun S&P CoreLogic composite-20 home price index expected -0.10% m/m and +5.1% y/y, May -0.5% m/m and +5.24% y/y.
Aug consumer confidence (Conference Board) expected -0.3 to 97.0, Jul -0.1 to 97.3.
UK Jul net consumer credit expected +1.7 billion pounds, Jun +1.8 billion pounds.
UK Jul mortgage approvals expected 62,000, Jun 64,800.
UK Jul M4 money supply, Jun +1.1% m/m and +3.5% y/y.
UK Aug Lloyds business barometer, Jul +23 to 29.
UK Aug GfK consumer confidence expected +4 to -8, Jul -11 to -12.
German Jul import price index expected -0.1% m/m and -4.0% y/y, Jun +0.5% m/m and -4.6% y/y.
German Aug CPI (EU harmonized) expected +0.1% m/m and +0.5% y/y, Jul +0.4% m/m and +0.4% y/y.
Eurozone Aug economic confidence expected -0.5 to 104.1, Jul +0.2 to 104.6. Aug business climate indicator expected -0.03to 0.36, Jul +0.17 to 0.39.
Revised Eurozone Aug consumer confidence, prelim-Aug -0.6 to -8.5.
Japan Jul industrial production expected +0.7% m/m and -3.0% y/y, Jun +2.3% m/m and -1.5% y/y.
China Aug Westpac-MNI consumer sentiment, Jul -1.9 to 114.0.