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MORNING CALL 6/17

|Includes: AOBC, CAH, CNC, CREE, EVCH, FNSR, FTNT, IRM, LL, LLY, MGM, NOW, ORCL, PE, Phillips 66 (PSX), PYPL, RDEN, SIG, SRCI, STLY, TWX

MORNING CALL

Friday, June 17th, 2016View Older Reports

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OVERNIGHT MARKETS AND NEWS

Sep E-mini S&Ps are down -0.18% and European stocks are up +1.07% as Brexit concerns temporarily receded after campaigning over whether the UK should leave the European Union was suspended for a second day today after the murder of Labor lawmaker Jo Cox, an advocate for Britain to remain in the EU. A weaker dollar has also boosted commodity prices, which has strengthened energy and raw-material producing stocks. Asian stocks settled higher: Japan +1.07%, Hong Kong +0.66%, China +0.43%, Taiwan +0.87%, Australia +0.32%, Singapore +0.43%, South Korea +0.01%, India +0.38%.

The dollar index is down -0.17%. EUR/USD is up +0.33%. USD/JPY is unchanged.

Sep T-note prices are down -11 ticks.

The BOE warns that if Britain votes next Thursday to leave the European Union, the damage could extend to global markets and the word economy. Central banks around the world are on high alert ahead of the vote with the leaders of the Fed, BOJ, BOC and SNB all citing the vote as being potentially disruptive. The BOE said a vote to leave could have "adverse spillovers to the global economy" through "financial market and confidence channels."

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) May housing starts (expected -1.9% to 1.150 million, Apr +6.6% to 1.172 million) and May building permits (expected +1.3% to 1.145 million, Apr +4.9% to 1.130 million).

None of the Russell 1000 companies report earnings today.

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

Equity conferences today include: none.

OVERNIGHT U.S. STOCK MOVERS

Phillips 66 (PSX +0.37%) was downgraded to 'Equal Weight' from 'Overweight' at Morgan Stanley.

Oracle (ORCL +0.52%) climbed over 2% in after-hours trading after it reported Q4 adjusted EPS of 81 cents, below consensus of 82 cents, but Q4 adjusted revenue of $10.6 billion was higher than consensus of $10.47 billion.

Smith & Wesson (SWHC +1.26%) jumped nearly 7% in after-hours trading after it reported Q4 adjusted EPS of 66 cents, well above consensus of 54 cents, and then raised guidance on fiscal 2017 adjusted EPS to $1.83-$1.93, above consensus of $1.66.

Parsley Energy (PE -2.77%) was rated a new 'Buy' at Wunderlich Securities with an 18-month price target of $32.

Envision Healthcare Holdings (EVHC -6.18%) was downgraded to 'Market Perform' from 'Outperform' at Oppenheimer.

Finisar (FNSR +0.80%) rallied over 8% in after-hours trading after it reported Q4 adjusted EPS of 29 cents, above consensus of 25 cents.

MGM Resorts International (MGM -1.47%) rose over 4% in after-hours trading after guiding annual adjusted Ebitda benefit to $400 million by the end of 2017 from $300 million previously forecast.

Revlon will buy Elizabeth Arden (RDEN -0.21%) for $14/ share cash if deal valued at $870 million.

Lumber Liquidators (LL +0.68%) jumped over 10% in after-hours trading after agreed to not resume sales of laminate flooring previously imported from China and the U.S, Consumer Product Safety Commission said it will not order a product recall.

ServiceNow (NOW -1.06%) was rated a new 'Market Perform' at Oppenheimer.

Paypal Holdings (PYPL +0.35%) was rated a new 'Outperform' at Oppenheimer with a price target of $43.

Synergy Resources Corp. (SYRG -4.24%) was rated a 'Strong Buy' at Raymond James with a 12-month price target of $9.50.

Stanley Furniture (STLY -1.56%) said it hired Stephens as financial adviser on a strategic review.

MARKET COMMENTS

September E-mini S&Ps this morning are down -3.75 points (-0.18%). Thursday's closes: S&P 500 +0.31%, Dow Jones +0.53%, Nasdaq +0.21%. The S&P 500 on Thursday rebounded from a 3-week low and closed higher on reduced Brexit concerns after the murder of a UK lawmaker fueled speculation that UK voters will vote to remain in the EU. Stocks were also boosted by stronger-than-expected U.S. economic data after the +6.5 point increase in the Jun Philadelphia Fed business outlook survey to 4.7 (stronger than expectations of +2.8 to 1.0) and the +2 point gain in the Jun NAHB housing market index to 60 (stronger than expectations of +1 to 59 and a 5-month high). Stocks were undercut by the slide in European stocks to a 4-month low on concern about a possible UK "Leave" vote next Thursday. Stocks were also undercut by the unexpected +13,000 increase in weekly initial unemployment claims.

Sep 10-year T-note prices this morning are down -11 ticks. Thursday's closes: TYU6 +6.50, FVU6 +3.50. Sep T-notes on Thursday rallied to a new contract high and closed higher on increased safe-haven demand from a slide in global stocks and on carryover support from rallies in 10-year German bunds and Japanese 10-year JGBs to all-time highs. T-notes were also boosted by reduced inflation expectations as the 10-year T-note breakeven inflation rate fell to a 3-1/4 month low.

The dollar index this morning is down -0.160 (-0.17%). EUR/USD is up +0.0037 (+0.33%). USD/JPY is unchanged. Thursday's closes: Dollar Index-0.318 (-0.33%), EUR/USD -0.0023 (-0.20%), USD/JPY -1.64 (-1.55%). The dollar index on Thursday climbed to a 1-1/2 week high but fell back and closed lower. The dollar was undercut by a recovery in GBP/USD from a 2-month low after the murder of a UK lawmaker fueled speculation that UK voters will vote to remain in the EU. The dollar was also undercut as USD/JPY plunged to a 1-3/4 year low after the BOJ refrained from expanding stimulus. The dollar found support on weakness in EUR/USD on Brexit fears and on stronger-than-expected U.S. economic data that included the Jun NAHB housing market index and the Jun Philadelphia Fed index.

July WTI crude oil this morning is up +71 cents (+1.54%). July gasoline is up +0.0303 (+2.07%). Thursday's closes: CLN6 -1.85 (-3.85%), RBN6 -0.0329(-2.19%). July crude oil and gasoline prices on Thursday closed lower with July crude at a 1-month low and July gasoline at a 5-week low. Crude oil prices were undercut by concern about a possible UK Leave Brexit vote next week and the the fall in the S&P 500 to a 3-week low, which undercuts optimism about the economy and energy demand.

GLOBAL EVENT CALENDAR06/17/2016
    Friday, June 17, 2016
US 0830 ET May housing starts expected -1.9% to 1.150 million, Apr +6.6% to 1.172 million. May building permits expected +1.3% to 1.145 million, Apr +4.9% to 1.130 million.
CHI 2130 ET China May property prices.
    Sunday, June 19, 2016
UK 1901 ET UK Jun Rightmove house prices, May +0.4% m/m and +7.8% y/y.
JPN 1950 ET Japan May trade balance expected +26.5 billion yen, Apr +623.2 billion yen. May exports expected -10.0% y/y, Apr -10.1% y/y. May imports expected -13.7% y/y, Apr -23.3% y/y.
    Monday, June 20, 2016
JPN 0130 ET Japan May nationwide department store sales, Apr -3.8% y/y.
GER 0200 ET German May PPI, Apr +0.1% m/m and -3.1% y/y.
EUR 0500 ET Eurozone Apr construction output, Mar -0.9% m/m and -0.5% y/y
US 1100 ET USDA weekly grain export inspections.
  1300 ET Treasury auctions 2-year T-notes.
  1600 ET USDA Weekly Crop Progress.

U.S. STOCK CALENDAR06/17/2016

Company Ticker Time Event Description Period Estimate
Centene Corp CNC 8:30 Investor Day Y 2016  
Eli Lilly & Co LLY 9:00 Diabetes Commercial Update Call    
Cardinal Health Inc CAH 10:00 Investors and Analysts Meeting - Dublin Y 2016  
Signet Jewelers Ltd SIG 10:00 Annual General Meeting Y 2016  
Iron Mountain Inc IRM 10:00 Annual General Meeting Y 2016  
Time Warner Inc TWX   Annual General Meeting    
Cree Inc CREE   ITC Scheduled to Announce Findings in Cree Inc. vs. Feit Electric Patent Case    
Fortinet Inc FTNT   Annual General Meeting