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Sep E-mini S&Ps (ESU17 +0.02%) this morning are up +0.06% due to strength in technology stocks as shares of Apple rally 6% in pre-market trading after it gave an upbeat revenue forecast ahead of the launch of its new iPhone next quarter. Apple suppliers Cirrus Logic and Skyworks Solutions are also up 3% in pre-market trading. European stocks are down -0.14% as exporter stocks decline after EUR/USD (^EURUSD) climbed to a new 2-1/2 year high, which undercuts European exporters' earnings prospects. Asian stocks settled mixed: Japan +0.47%, Hong Kong +0.24%, China -0.23%, Taiwan +0.79%, Australia -0.49%, Singapore +0.32%, South Korea +0.21%, India -0.30%. A rally in technology stocks in Asia after Apple's upbeat revenue forecast sent China's Shanghai Composite up to a 2-1/2 year high, although losses in raw-material producing stocks spurred long liquidation and the Shanghai Composite gave up its gains and closed lower.
The dollar index (DXY00-0.07%) is down -0.07%. EUR/USD (^EURUSD) is up +0.25% at a 2-1/2 year high. USD/JPY (^USDJPY) is up +0.34%.
Sep 10-year T-note prices (ZNU17-0.14%) are down -4.5 ticks ahead of the Treasury's announcement later this morning on the size of next week's quarterly refunding.
As expected, the Reserve Bank of India (RBI) cut its repurchase rate by 25 bp to 6.00% from 6.25% in a 5-1 vote and said, "some of the upside risks to inflation have either reduced or not materialized."
Eurozone Jun PPI of -0.1% m/m and +2.5% y/y was right on expectations with the +2.5% y/y gain the smallest year-on-year increase in 6-months.
The Japan Jul consumer confidence index rose +0.5 to 43.8, stronger than expectations of +0.2 to 43.5 and a 4-month high.
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) weekly MBA mortgage applications (previous +0.4%, purchase sub-index -2.2%, refi sub-index +3.4%), (2) Jul ADP employment (expected +190,000, Jun +158,000), (3) Cleveland Fed President Lorretta Mester (non-voter) is keynote speaker at the Community Bankers Association of Ohio annual convention, (4) San Francisco Fed President John Williams (non-voter) speaks at an event in Las Vegas on “Monetary Policy’s Role in Fostering Sustainable Growth,” (5) EIA Weekly Petroleum Status Report.
Notable S&P 500 earnings reports today include: Time Warner (consensus $1.19), Exelon (0.52), Humana (3.07), Southern Co (0.71), Lincoln National (1.75), Occidental Petroleum (0.09), Prudential Financial (2.70), Williams Cos (0.20), MetLife (1.28), Fortune Brands (0.87), Marathon Oil (-0.15), Symantec (0.31), AIG (1.20).
U.S. IPO's scheduled to price today: Venator Materials (VNTR).
Equity conferences this week: UBS Transport Conference on Thu.
OVERNIGHT U.S. STOCK MOVERS
Apple (AAPL +0.89%) rallied over 6% in pre-market trading to a record high after it reported Q3 EPS of $1.67, better than consensus of $1.57, and then said it sees Q4 revenue of $49 billion-$52 billion, the midpoint well above consensus of $49.12 billion. Apple suppliers Cirrus Logic (CRUS +2.67%) and Skyworks Solutions (SWKS-0.56%) are also up 3% in pre-market trading.
Ultimate Software Group (ULTI +0.57%) tumbled 11% in after-hours trading after it reported Q2 revenue of $224.7 million, weaker than consensus of $228 million, and then said it sees Q3 revenue of $201 million-$203 million, below consensus of $245.4 million.
Illumina (ILMN-0.89%) jumped 9% in after-hours trading after it reported Q2 adjusted EPS 0of 82 cents, better than consensus of 68 cents, and then said it sees full-year adjusted EPS of $3.560-$3.70, the midpoint above consensus of $3.63.
Allstate (ALL unch) gained 2% in after-hours trading after it reported Q2 operating EPS of $1.38, well above consensus of 87 cents and said its board approved a new $2 billion share repurchase program.
Fiserv (FISV +0.60%) dropped over 2% in after-hours trading after it reported Q2 adjusted EPS of $1.19, less than consensus of $1.23, and then said it sees full-year adjusted EPS of $5.02-$5.17, the midpoint below consensus of $5.12.
Hanesbrands (HBI +0.52%) rose over 3% in after-hours trading after it said it sees full-year net sales of $6.45 billion to $6.55 billion, above consensus of $6.44 billion.
Terex (TEX-1.22%) rose 4% in after-hours trading after it raised guidance on its full-year EPS view to $1.05-$1.15 from a prior view of 80 cents-95 cents, above consensus of 98 cents.
Coherent (COHR +2.26%) sank 18% in after-hours trading after it reported Q3 net sales of $464.1 million, weaker than consensus of $467 million.
Herbalife (HLF +0.02%) lost 4% in after-hours trading after it said it sees full-year adjusted EPS of $4.30-$4.70, the midpoint below consensus of $4.62.
FireEye (FEYE +0.41%) climbed nearly 7% in after-hours trading after it reported a Q2 adjusted loss of -4 cents per share, a smaller loss than expectations of -12 cents, and then raised its 2017 revenue estimate to $734 million-$746 million from a prior view of $724 million-$736 million.
MACOM Technology Solutions Holdings (MTSI +0.84%) plunged 20% in after-hours trading after it reported Q3 adjusted EPS of 67 cents, weaker than consensus of 68 cents, and then said it sees Q4 adjusted EPS of 45 cents-50 cents, below consensus of 75 cents.
Frontier Communications (FTR +3.79%) lost nearly 6% in after-hours trading after it reported a Q2 adjusted loss per share of -$1.10, a wider loss than expectations of -$1.02.
Big 5 Sporting Goods (BGFV +1.86%) tumbled over 13% in after-hours trading after it said it expects Q3 same store sales to be in the negative low single-digit range with Q3 EPS of 22 cents-32 cents, below consensus of 39 cents.
Sep S&P 500 E-mini stock futures (ESU17 +0.02%) this morning are up +1.50 points (+0.06%). Tuesday's closes: S&P 500 +0.24%, Dow Jones +0.33%, Nasdaq +0.25%. The S&P 500 on Tuesday closed higher on signs of strength in the global economy after Eurozone Q2 GDP grew at a +2.1% y/y pace, the strongest year-on-year increase in 6 years, and after the China Jul Caixin manufacturing PMI rose +0.7 to 51.1, the fastest pace of expansion in 4 months. Stocks also continued to see underlying strength from the positive Q2 earnings season. Stocks were undercut by the U.S. Jun personal income report of unchanged (weaker expectations of +0.4%) and by the unexpected -1.3% decline in U.S. Jun construction spending (weaker than expectations of +0.4%).
Sep 10-year T-note prices (ZNU17-0.14%) this morning are down -4.5 ticks. Tuesday's closes: TYU7 +11, FVU7 +4.75. Sep 10-year T-notes on Tuesday closed higher on the unexpected stagnation in U.S. Jun personal income report of unchanged (weaker than expectations of +0.4%) and the unexpected -1.3% m/m decline in U.S. Jun construction spending. T-notes were also supported by the -2% slide in crude oil prices, which reduces inflation expectations.
The dollar index (DXY00-0.07%) this morning is down -0.067 (-0.07%). EUR/USD (^EURUSD) is up +0.0030 (+0.25%) at a new 2-1/2 year high and USD/JPY (^USDJPY) is up +0.38 (+0.34%). Tuesday's closes: Dollar Index +0.180 (+0.19%), EUR/USD -0.0040 (-0.34%), USD/JPY +0.10 (+0.09%). The dollar index on Tuesday closed higher on weakness in the currencies of the crude-oil-exporting countries of Canada and Russia after crude oil prices tumbled -2%. The dollar also found support on U.S. Jul ISM manufacturing index report of -1.5 to 56.3, which was close to expectations and signaled that U.S. manufacturing activity remains in expansionary territory.
Sep crude oil (CLU17-0.02%) this morning is up +7 cents (+0.14%). Sep gasoline (RBU17 +0.12%) is up +0.0034 (+0.20%). Tuesday's closes: Sep WTI crude -1.01 (-2.01%), Sep gasoline -0.0153 (-0.91%). Sep crude oil and gasoline on Tuesday closed lower on a stronger dollar and on increased OPEC crude output that may prolong the global oil glut after OPEC Jul crude production rose +210,000 bpd to 7-month high of 32.87 million bpd.
Jul ADP employment change expected +190,000, Jun +158,000.
Treasury announces amount of 3-year T-notes (previous $24 billion), 10-year T-notes (previous $20 billion) and 30-year T-bonds (previous $12 billion) to be auctioned Aug 8-10 in the Treasurys quarterly refunding.
EIA Weekly Petroleum Status Report.
Cleveland Fed President Lorretta Mester (non-voter) is keynote speaker at the Community Bankers Association of Ohio annual convention.
San Francisco Fed President John Williams (non-voter) speaks at an event in Las Vegas on Monetary Policys Role in Fostering Sustainable Growth.
Thursday, Aug 3
Jul Challenger job cuts, Jun -19.3% y/y.
Weekly initial unemployment claims expected -2,000 to 242,000, previous +10,000 to 244,000. Weekly continuing claims expected -6,000 to 1.958 million, previous -13,000 to 1.964 million.
USDA weekly Export Sales.
Final-Jul Markit U.S. services PMI expected unch at 54.2, prelim-Jul unch at 54.2.
Jul ISM non-manufacturing expected -0.5 to 56.9, Jun +0.5 to 57.4.
Jun factory orders expected +3.0%, May -0.8% and -0.3% ex transportation.