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Sep S&P 500 E-mini stock futures (ESU17 +0.16%) this morning are trading slightly higher by +0.21% on generally positive global earnings and on higher European stocks with the Euro Stoxx 50 index up +0.1% this morning. Global stocks continued to receive a boost from the dovish outcome of Wednesday's FOMC meeting where the central bank adopted slightly more dovish language about inflation and did not set a date for its balance sheet normalization program, thus giving itself a dovish escape hatch if it wants to delay the program.
The U.S. markets today are watching a big earnings day and events in Washington, where the Senate late today plans to hold a so-called vote-a-rama on health care and where the House is trying to get a 2018 budget resolution passed before it leaves on Friday for its August recess. The 2018 budget resolution is of key importance because it will contain reconciliation provisions for tax reform. The markets are also waiting for Republicans to release a unified Congressional-White House tax reform plan before the House leaves on Friday for its recess.
Asian stocks today closed higher across the board with support from positive earnings from Samsung and Nintendo: Japan Nikkei +0.15%, Hong Kong Hang Seng +0.71%, China Shanghai Composite +0.06%, Taiwan TAIEX +0.86%, Australian S&P 200 +0.15, Singapore Straights Times +0.54, South Korea KOSPI +0.33%, India Sensex-30 unch.
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) weekly initial unemployment claims (expected +7,000 to 240,000, previous -15,000 to 233,000) and continuing claims (expected -18,000 to 1.959 million, previous +28,000 to 1.977 million), (2) Jun durable goods orders (expected +3.5% and +0.4% ex transportation, May -0.8% and +0.3% ex transportation), (3) Jun wholesale inventories (expected +0.3%, May +0.3%), (4) Jun Chicago Fed national activity index (May -0.83 to -0.26), (5) Jul Kansas City Fed manufacturing activity (expected +1 to 12, Jun +3 to 11), (6) Treasury auctions $28 billion of 7-year T-notes, (7) USDA weekly Export Sales.
U.S. IPO's scheduled to price today: Redfin (RDFN).
Equity conferences this week: RSA Security Inc Conference (Wed-Thu).
OVERNIGHT U.S. STOCK MOVERS
There are 37 of the S&P 500 companies that have reported earnings this morning. Companies that beat their earnings consensus include Conoco Phillips (COP +0.11%) at 0.14, Valero (VLO-0.66%) at 1.23, Raytheon (RTN-0.42%) at 1.96, Procter & Gamble (PG +0.18%) at 0.85, Comcast (CMCSA-1.01%) at 0.52, UPS (UPS-0.82%) at 1.58, BorgWarner (BWA +0.04%) at 0.96, Dow Chemical (DOW-1.33%) at 1.08, S&P Global (SPGI-0.37%) at 1.65, Southwest Airlines (LUV +1.19%) at 1.24, Bristol-Myers Squibb (BMY +0.05%) at 0.74.
Verizon (VZ +0.95%) matched expectations of 0.96. Companies that underperformed the consensus included Johnson Controls (JCI-1.95%) at 0.71, ADP (ADP +2.71%) at 0.65, Marathon Petroleum (MPC-0.64%) at 1.02, and Neilsen (NLSN +3.29%) at 0.43.
Facebook (FB +0.20%) rallied 4% in after-hours trading on positive earnings news driven in part by mobile video ads.
Gilead Sciences (GILD +0.61%) rallied 2% in after-hours trading after raising its annual sales guidance.
Whiting Petroleum (WLL-0.57%) fell 5% in after-hours trading on disappointing production guidance.
AstraZeneca (AZN +0.47%) plunged by -15% in European trading after disappointing trial results for its next-generation cancer therapies.
Diageo (DEO +1.02%) ralied more than 4% in European trading after raising its 3-year profitabilty goal and announcing a stock buyback.
Anheuser-Busch InBev (BUD +1.54%) rallied more than 4% in European trading after reporting an earnings beat.
Deutsche Bank (DB +0.11%) fell 3% afer reporting a 10% drop in Q2 revenues.
Sep S&P 500 E-mini stock futures this morning are trading slightly higher by +0.21% on generally positive global earnings and on higher European stocks with the Euro Stoxx 50 index up +0.01% this morning. Wednesday's closes: S&P 500 +0.03%, Dow Jones +0.45%, Nasdaq +0.16%. The S&P 500 on Wednesday closed higher on the -4.8 bp drop in the 10-year T-note yield to 2.287%, which was prompted by a dovish interpretation of the FOMC meeting outcome. Stocks also found carry-over support from the +0.51% rally in the Euro Stoxx 50 index. Energy stocks received another boost from the +1.80% rally in Sep crude oil.
Sep 10-year T-note prices this morning are down -4 ticks, giving back some of Wednesday's +14 tick rally. Wednesday's closes: TYU7 +14, FVU7 +10.5. Sep 10-year T-notes on Wednesday closed sharply higher on the slightly weaker-than-expected June new home sales report and on the FOMC's decision not to name an exact start date for its balance sheet normalization program, which gives the Fed a dovish escape hatch if it decides to delay the program. T-notes were also boosted by the fact that the FOMC's post-meeting statement that was a little softer on the inflation outlook.
The dollar index is trading slightly lower by -0.053 (-0.06%), while EUR/USD is down -0.0026 (-0.22%) and USD/JPY is up +0.15 (+0.13%). Wednesday's closes: Dollar index -0.382 (-0.41%), EUR/USD +0.0087 (+0.75%), USD/JPY -0.71 (-0.63%). The dollar index on Wednesday fell to another new 13-month low and closed moderately lower on the market's dovish interpretation of the FOMC meeting, which hurt the dollar's interest rate differentials by pushing the 10-year T-note yield lower by -4.8 bp. The dollar index was also hurt by continued Washington political uncertainty and technical weakness.
Sep WTI crude oil prices are up by another +0.11 (+0.23%) this morning, while Sep gasoline is up +0.0088 (+0.55%), as crude oil continues to benefit from Wednesday's bullish weekly EIA report. Wednesday's closes: Sep WTI crude +0.86 (+1.80%), Sep gasoline +2.24 (+1.42%). Sep crude oil and gasoline on Wednesday closed sharply higher on the bullish EIA report which showed a plunge in U.S. crude oil inventories by -7.208 million bbls (vs expectations of -3.0 mln), a -1.852million bbl decline in distillate inventories (vs expectations of -1.0 million bbl), and a -0.2% w/w decline in U.S. oil production to 9.410 million bpd from the previous week's 2-year high of 9.429 million bpd. Gasoline inventories fell by -1.015 million bbls, which was less than expectations of -1.8 million bbls and was mildly negative for gasoline prices.
GLOBAL EVENT CALENDAR07/27/2017
Thursday, July 27
Weekly initial unemployment claims expected +7,000 to 240,000, previous -15,000 to 233,000. Weekly continuing claims expected -18,000 to 1.959 million, previous +28,000 to 1.977 million.
Jun durable goods orders expected +3.5% and +0.4% ex transportation, May -0.8% and +0.3% ex transportation. Jun capital goods orders non-defense ex aircraft expected +0.3%, May +0.2%.
Jun wholesale inventories expected +0.3%, May +0.3%.
Jun Chicago Fed national activity index, May -0.83 to -0.26.
USDA weekly Export Sales.
Jul Kansas City Fed manufacturing activity expected +1 to 12, Jun +3 to 11.
Treasury auctions $28 billion of 7-year T-notes.
Friday, July 28
Q2 employment cost index expected +0.6%, Q1 +0.8%.
U.S. GDP revisions from 2014-16.
Q2 GDP expected +2.5% (q/q annualized), Q1 +1.4%. Q2 personal consumption expected +2.9%, Q1 +1.1%. Q2 GDP price index expected +1.3%, Q1 +1.9%. Q2 core PCE expected +0.7%, Q1 +2.0% q/q.
Revised U.S. Jul University of Michigan consumer sentiment expected unchanged at 93.1, prelim-Jul -2.0 to 93.1.
Minneapolis Fed President Neel Kashkari (voter) answers questions form a moderator art a townhall meeting in Oakdale, MN.