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OVERNIGHT MARKETS AND NEWS
Dec E-mini S&Ps (ESZ16 +0.21%) are up +0.23%, although they gave up an even bigger advance due to losses in European stocks. European stocks are down -0.49% at a 1-week low as bank stocks slide. Deutsche Bank AG is down nearly 3% at a fresh record low amid growing concerns that it will need to raise capital, and Commerzbank AG is down 3% after a report said it plans to eliminate 9,000 jobs and suspend dividend payments. Weakness in energy producers is another drag on the overall market with crude oil (CLX16-1.87%) down -1.44% after Iran said it is unwilling to freeze its crude output at current levels, which dampens expectations that OPEC will reach a deal on production cuts when it meets tomorrow in Algiers. Asian stocks settled mostly higher: Japan +0.84%, Hong Kong +1.09%, China +0.60%, Taiwan closed due to Typhoon Megi, Australia -0.47%, Singapore +0.36%, South Korea +0.81%, India -0.25%. Asian stocks recovered from early losses and closed higher on speculation that U.S. Democratic candidate Clinton won the presidential debate last night with Republican nominee Trump, which eases concern of the effects on foreign trade that Trump would have if he is elected U.S. President. Chinese stocks also received a boost after China Aug industrial profits rose by the most in 3 years.
The dollar index (DXY00 +0.11%) is up +0.06%. EUR/USD (^EURUSD) is down -0.06%. USD/JPY (^USDJPY) is up +0.06%.
Dec 10-year T-note prices (ZNZ16 +0.11%) are up +2 ticks at a 2-1/2 week high as European banking concerns boost the safe-haven demand for government debt. The yield on the 10-year German bund fell to a 1-1/2-month low of -0.152%.
China Aug industrial profits rose +19.5% y/y, the largest increase in 3 years.
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) Jul S&P CoreLogic composite-20 home price index (expected unch m/m and +5.1% y/y, Jun -0.07% m/m and +5.13% y/y), (2) Sep Markit services PMI (expected +0.2 to 51.2, Aug -0.4 to 51.0), (3) Sep Conference Board U.S. consumer confidence index (expected -2.4 to 98.7, Aug +4.4 to 101.1), (4) Sep Richmond Fed manufacturing index (expected +9 to -2, Aug -21 to -11), and (5) Treasury's auction of $34 billion of 5-year T-notes.
Russell 1000 companies that report earnings today: FactSet (consensus $1.69), NIKE (0.56), Cintas (1.08).
U.S. IPO's scheduled to price today: Fulgent Genetics (FLGT).
Equity conferences during the remainder of this week include: Deutsche Bank Leveraged Finance Conference on Tue, JMP Securities Financial Services & Real Estate Conference on Tue, Wolfe Research Power and Gas Leaders Conference on Tue-Wed, Leerink Partners Rare Disease & Immuno Oncology Roundtable Conference on Wed-Thu.
OVERNIGHT U.S. STOCK MOVERS
CBOE Holdings (CBOE-5.28%) was upgraded to 'Neutral' from 'Underperform' at Credit Suisse.
Electronics For Imaging (EFII-0.29%) was rated a new 'Buy' at Needham & Co. with a 12-month target price of $58.
Gilead Sciencies (GILD-0.92%) was downgraded to 'Market Perform' from 'Outperform' at Leerink Partners.
AutoZone (AZO +1.88%) was upgraded to 'Overweight' from 'Equalweight' at Morgan Stanley with a price target of $840.
Consolidated Edison (ED-0.03%) was upgraded to 'Hold' from 'Sell' at Evercore ISI with a 12-month target price of $76.
Crown Holdings (CCK-0.66%) was upgraded to 'Outperform' from 'Market Perform' at BMO Capital Markets with a price target of $65.
Synnex (SNX-0.47%) jumped over 6% in after-hours trading after it reported Q3 adjusted EPS of $1.73, above consensus of $1.56, and said it sees Q4 adjusted EPS of $2.06-$2.11, higher than consensus of $1.91.
Rice Energy (RICE +0.82%) slipped 4% in after-hours trading after it announced a public offering of 40 million shares of common stock.
Sunoco Logistics Partners LP (SXL-0.38%) dropped nearly 6% in after-hours trading after offering 21 million shares to fund its Vitol Platform purchase.
Nordic American Tankers Ltd (NAT-1.57%) fell over 5% in after-hours trading after it offered 11 million shares of common stock.
Kite Pharma (KITE +0.75%) climbed 9% in after-hours trading after a study of its Zuma-1 drug showed a better-than-expected 47% complete remission rate in diffuse large B-cell lymphoma patients.
Array Biopharma (ARRY +81.10%) gained 5% in after-hours trading after the company's binimetinib-encorafenib combo met the primary endpoint of improving progression free survival in a study of melanoma patients.
Dec E-mini S&Ps (ESZ16 +0.21%) this morning are up +5.00 points (+0.23%). Monday's closes: S&P 500 -0.86%, Dow Jones -0.91%, Nasdaq -0.86%. The S&P 500 on Monday closed lower on negative carryover from a slide in European bank stocks after Deutsche Bank AG, Germany's largest bank, slumped by more than -7% to a record low on concern that mounting legal exposure will force it to raise more capital. U.S. bank stocks were also undercut by Fed Governor Tarullo's comment that a Fed plan to merge bank stress tests with related capital rules "would generally result in a significant increase in capital requirements."
Dec 10-year T-notes (ZNZ16 +0.11%) this morning are up +2 ticks a t a 2-1/2 week high. Monday's closes: TYZ6 +9.00, FVZ6 +4.75. Dec 10-year T-notes on Monday climbed to a 2-week high and closed higher on carryover support from a rally in German bund prices to a 2-week high after ECB President Draghi said the Eurozone recovery has less momentum and the ECB will preserve "very substantial" monetary support. T-notes were also boosted by increased safe-haven demand after the slide in stocks.
The dollar index (DXY00 +0.11%) this morning is up +0.061 (+0.06%). EUR/USD (^EURUSD) is down -0.0007 (-0.06%). USD/JPY (^USDJPY) is up +0.06 (+0.06%). Monday's closes: Dollar index -0.180 (-0.19%), EUR/USD +0.0028 (+0.25%), USD/JPY -0.69 (-0.68%). The dollar index on Monday closed lower on strength in EUR/USD which rose to a 1-week high after the German Sep IFO business climate rose to a 2-1/3 year high (+3/2 to 109.5). In addition, USD/JPY fell -0.68% as a sell-off in stocks boosted the safe-haven demand for the yen.
Nov WTI crude oil (CLX16-1.87%) this morning is down -66 cents (-1.44%) and Nov gasoline (RBX16-2.02%) is down -0.0228 (-1.65%). Monday's closes: Nov crude +1.14 (+2.56%), Nov gasoline +0.0229 (+1.69%). Nov crude and gasoline on Monday closed higher with Nov gasoline at a 2-week high. Crude oil prices were boosted by the weaker dollar and by comments from Algeria's energy minister who said that Saudi Arabia has offered to cut its crude output back to a Jan level of 10.2 million bpd from Aug's 10.69 million bpd if Iran would agree to cap its output.
GLOBAL EVENT CALENDAR09/27/2016
Tuesday, Sep 27
Jul S&P CoreLogic composite-20 home prices expected unch m/m and +5.1% y/y, Jun -0.07% m/m and +5.13% y/y.
Sep Markit services PMI expected +0.2 to 51.2, Aug -0.4 to 51.0. Sep Markit composite PMI, Aug -0.3 to 51.5.
Sep consumer confidence (Conference Board) expected -2.4 to 98.7, Aug +4.4 to 101.1.
Sep Richmond Fed manufacturing survey expected +9 to -2, Aug -21 to -11.
Treasury auctions $34 billion of 5-year T-notes.
Wednesday, Sep 28
Weekly MBA mortgage applications, previous -7.3% with purchase sub-index -6.8% and refi sub-index -7.6%.
Aug durable goods orders expected -1.4% and -0.5% ex transportation, Jul +4.4% and +1.3% ex transportation. Aug capital goods orders nondefense ex-aircraft & parts expected -0.1%, Jul +1.5%.
Fed Chair Janet Yellen testifies before the House Financial Services Committee on the topic of bank supervision and regulation.
St. Louis Fed President James Bullard (voter) delivers introductory and welcoming comments at the Community Banking in the 21st Century conference.
EIA Weekly Petroleum Status Report.
Treasury auctions $13 billion of 2-year floating rate notes.
Treasury auctions $28 billion of 7-year T-notes.
Chicago Fed President Charles Evans (non-voter) delivers a keynote address at the research conference Community Banking in the 21st Century.
Kansas City Fed President Esther George (voter) speaks at an event hosted by the Kansas City Fed titled Banking and the Economy: A Forum for Minority Bankers.