Overnight Markets and News

Sep E-mini S&Ps (ESU18 +0.22%) this morning are up +0.24% and European stocks are up +0.29% at a 2-week high as the markets await Fed Chair Powell's speech later this morning at the Fed's annual Jackson Hole policy symposium. Oct WTI crude oil (CLV18 +1.19%) is up +1.31% at a 2-week high, which is pushing energy stocks higher as a weaker dollar and supply concerns boost crude futures. North Sea oil supplies may be affected by a series of 12-hour strikes by workers on oil platforms operated by Total SA. Mining and raw-material stocks are high with Sep COMEX copper (HGU18 +0.89%) up +0.77% on signs of tighter copper supplies after weekly Shanghai copper inventories fell -8,486 MT to a 146,590 MT, an 8-month low. On the negative side, trade tensions may escalate between China and the U.S. after 2-days of talks in Washington between negotiators failed to make progress. A person familiar with the discussions said no further talks are scheduled and that Chinese officials raised the possibility that no further negotiations could happen until after the U.S. mid-term elections in November. Asian stocks settled mixed: Japan +0.85%, Hong Kong -0.43%, China +0.18%, Taiwan -0.50%, Australia +0.05%, Singapore -1.14%, South Korea +0.42%, India -0.22%. Strength in the yuan versus the dollar and a rally in Chinese bank stocks pushed the Shanghai Composite to a 1-week high. A rally in USD/JPY to a 2-1/2 week high spurred buying of Japanese exporter stocks, which helped lead a rally in the Nikkei Stock Index to a 2-week high.

The dollar index (DXY00 -0.28%) is down -0.28%. EUR/USD (^EURUSD +0.39%) is up +0.36%. USD/JPY (^USDJPY +0.09%) is up % at a 2-1/2 week high after weaker-than-expected Japan Jul national CPI spurred speculation the BOJ may need to maintain its yen-negative QE program.

Sep 10-year T-note prices (ZNU18 -0-035) are down -4.5 ticks.

Japan Jul PPI services rose +1.1% y/y, unch from Jun and weaker than expectations of +1.2% y/y.

Japan Jul national CPI rose +0.9% y/y, weaker than expectations of +1.0% y/y. Jul national CPI ex fresh food rose +0.8% y/y, weaker than expectations of +0.8% y/y. Jul national CPI ex fresh food & energy rose +0.3% y/y, right on expectations.

U.S. Stock Preview

Key U.S. news today includes: (1) Jul durable goods orders (expected -1.0% and +0.5% ex transportation, Jun +0.8% and +0.2% ex transportation), (2) Fed Chair Jerome Powell’s speech titled “Monetary Policy in a Changing Economy” at the Kansas City Fed’s economic symposium in Jackson Hole, WY, (3) USDA Jul Cattle on Feed.

Notable Russell 2000 earnings reports today include: Foot Locker (consensus $0.70), Ubiquiti Networks (1.06).

U.S. IPO's scheduled to price today: none.

Equity conferences during the remainder of this week: NGAUS Conference on Fri.

Market Comments

Sep S&P 500 E-minis (ESU18 +0.22%) this morning are up +7.00 points (+0.24%). Thursday's closes: S&P 500 -0.17%, Dow Jones -0.30%, Nasdaq 100 -0.14%. The S&P 500 on Thursday closed lower on trade tensions between China and the U.S. after both countries slapped $16 billion of tariffs on each other’s good and on the unexpected -1.7% drop in U.S. Jul new home sales to a 9-month low of 627,000, weaker than expectations of +2.2% to 645,000. Stocks were also undercut by the -0.9 point drop in the U .S. Aug Markit manufacturing PMI to 54.5, weaker than expectations of -0.3 to 55.0 and the slowest pace of expansion in 9 months.

Sep 10-year T-notes (ZNU18 -0-035) this morning are down -4.5 ticks. Thursday's closes: TYU8 +5.50, FVU8 +3.00. Sep 10-year T-notes on Thursday closed slightly lower on increased inflation expectations after the 10-year T-note breakeven inflation rate rose to a 1-week high and on some long liquidation ahead of Friday morning's comments from Fed Chair Powell at Jackson Hole. T-note prices were supported by the unexpected -1.7% decline in U.S. Jul new home sales to a 9-month low and by the larger-than-expected -0.8 point decline in the U.S. Aug Markit manufacturing PMI to a 9-month low of 54.5.

The dollar index (DXY00 -0.28%) this morning is down -0.268 (-0.28%). EUR/USD (^EURUSD +0.39%) is up +0.0041 (+0.36%). USD/JPY (^USDJPY +0.09%) is up +0.09 (+0.08%) at a 2-1/2 week high. Thursday's closes: Dollar Index +0.52 (+0.55%), EUR/USD -0.0057 (-0.49%), USD/JPY +0.73 (+0.66%). The dollar index on Thursday closed higher on signs of a tight U.S. labor market that is hawkish for Fed policy after U.S. weekly jobless claims unexpectedly fell -2,000 to a 5-week low of 210,000. There were also Eurozone economic concerns that weighed on EUR/USD after the Eurozone Aug Markit manufacturing PMI unexpectedly fell -0.5 to a 1-3/4 year low of 54.6.

Metals this morning are higher with Dec gold (GCZ18 +0.41%) +3.9 (+0.33%), Sep silver (SIU18 +0.47%) +0.058 (+0.40%) and Sep copper (HGU18 +0.89%) +0.021 (+0.77%). Thursday's closes: Dec gold -9.3 (-0.77%), Sep silver -0.208 (-1.41%), Sep copper -0.0190 (-0.71%). Metals on Thursday closed lower on strength in the dollar and on the unexpected decline in U.S. Jul new home sales by -1.7% to a 9-month low of 627,000. Metals prices were also undercut by weakness in Eurozone and U.S. manufacturing activity after the Eurozone Aug Markit manufacturing PMI unexpectedly fell -0.5 to a 1-3/4 year low of 54.6 and the U.S. Aug Markit manufacturing PMI fell -0.8 to a 9-month low of 54.5.

Oct WTI crude oil (CLV18 +1.19%) this morning is up +89 cents (+1.31%) at a 2-week high. Oct gasoline (RBV18 +0.90%) is up +2.08 (+1.06%) at a 2-week high. Thursday's closes: Oct crude oil -0.03 (-0.04%), Oct gasoline -0.55 (-0.28%). Oct crude oil and gasoline on Thursday closed lower on a stronger dollar and on a decline in the crack spread to a 1-month low, which reduces the incentive for refiners to purchase crude to refine into gasoline. Crude oil prices saw carry-over support from Wednesday's EIA data showing a sharp -5.84 million bbl decline in EIA crude inventories (vs expectations of -2.0 million bbl).

Overnight U.S. Stock Movers

Netflix (NFLX -1.53%) gained more thn 1% in pre-market trading after it was upgraded to 'Buy' from 'Hold' at Suntrust Robinson Humphrey.

Hormel Foods (HRL -3.06%) was downgraded to 'Equal-Weight' from 'Oveweight' at Barclays.

Arista Networks (ANET +1.89%) may move higher initially this morning after it was announced that it will replace GGP Inc in the S&P 500 effective prior to the opening of trading on Tuesday, August 28.

Autodesk (ADSK -0.46%) climbed nearly 7& in after-hours trading after it reported Q2 adjusted EPS of 19 cents, above consensus of 16 cents, and then forecast full-year adjusted EPS of 87 cents to 95 cents, the midpoint higher than consensus of 90 cents.

Intuit (INTU +1.32%) fell almost 3% in after-hours trading after it forecast Q1 adjusted EPS of 9 cents to 11 cents, weaker than consensus of 15.7 cents.

Veeva (VEEV +0.60%) rose almost 3% in after-hours trading after it reported Q2 adjusted EPS of 39 cents, better than consensus of 34 cents, and then forecast full-year adjusted EPS of $1.47 to $1.48, stronger than consensus of $1.37.

Splunk (SPLK +0.81%) jumped over 9% in after-hours trading after it reported Q2 revenue of $388.3 million, higher than consensus of $358.5 million, and then forecast Q3 revenue of $430 million to $432 million, above consensus of $427.6 million.

Ross Stores (ROST +1.73%) fell nearly 5% in after-hours trading after it forecast Q3 EPA of 84 cents to 88 cents, the midpoint below consensus of 88 cents.

HP Inc (HPQ +0.57%) reported Q3 adjusted EPS of 52 cents, above consensus of 51 cents, and then raised guidance on fiscal 2018 adjusted EPS to $2.00 to $2.03 from a May 29 view of $1.97 to $2.02, above consensus of $2.00.

The Gap (GPS +0.71%) dropped 7% in after-hours trading after it said Q2 Gap global comparable store sales fell -5.0%, weaker than consensus of -2.3%.

Immunomedics (IMMU -3.24%) slid nearly 3% in after-hours trading after it reported a Q4 loss of -68 cents per share, wider than consensus of -22 cents.

Rosehill Resources (ROSEU -3.94%) was rated a new 'Buy' at Stifel with a price target of $14.

New York & Co. (NWY +1.18%) gained 2% in after-hours trading after it reported Q2 comparable store sales rose +0.6% and gross margin improved 150 bps to 32.1%.