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MORNING CALL 6/20

|Includes: ABX, CACC, CLNY, CTLT, CXRX-OLD, DVA, EXPE, FB, FDX, Corning Inc. (GLW), HOLX, IGT, JAZZ, RETA, SYMC, UNP, YELP

MORNING CALL

Monday, June 20th, 2016

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OVERNIGHT MARKETS AND NEWS

Sep E-mini S&Ps (ESU16 +1.36%) are up sharply by +1.34% and European stocks are up +3.22% at a 1-week high as the latest polls show that the UK will vote to remain in the European Union in Thursday's referendum. The British pound climbed to a 2-1/2 week high and the dollar index fell to a 1-week low, which boosted commodity prices and fueled gains in mining stocks and energy producers. Asian stocks settled higher: Japan +2.34%, Hong Kong +1.69%, China +0.13%, Taiwan +0.68%, Australia +1.82%, Singapore +1.36%, South Korea +1.47%, India +0.91%.

The dollar index (DXY00 -0.55%) is down -0.52% at a 1-week low. EUR/USD (^EURUSD) is up +0.43% at a 1-week high. USD/JPY (^USDJPY) is up +0.39%.

Sep T-note prices (ZNU16 -0.28%) are down -14 ticks at a 1-week low as stocks surge and Brexit concerns ease, which reduces the safe-haven demand for Treasuries.

China May new home prices rose in 60 of the 70 cities tracked by the government, down from 65 cities that rose in April.

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) Minneapolis Fed President Neel Kashkari (non-voter) gives prepared remarks and chairs a panel titled "Shortfalls of Current Policies Towards Banks" at a symposium on Too Big To Fail in Washington D.C., (2) the Treasury's auction of$26 billion of 2-year T-notes, (3) USDA weekly grain export inspections, and (4) USDA Weekly Crop Progress.

None of the Russell 1000 companies report earnings today.

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

Equity conferences this week include: Questex Sensors Expo & Conference on Tue, Real Estate Investment World Asia 2016 on Tue, Wells Fargo Convergence & Connectivity Symposium on Tue, Jefferies Consumer Conference on Tue-Wed, Wells Fargo West Coast Energy Conference on Tue-Wed, Panagora Pharma - Mobile Pharma Summit on Tue-Wed, Bernstein Global Future of Media & Telecommunications Summit on Wed, Oppenheimer Global Consumer Conference on Wed, Citigroup Insurance Conference on Thu.

OVERNIGHT U.S. STOCK MOVERS

Corning (GLW +0.90%) was rated a new 'Buy' at Citigroup with a price target of $23.

Yelp (YELP +0.56%) was upgraded to 'Buy' from 'Hold' at Deutsche Bank.

Catalent (CTLT -3.29%) was upgraded to 'Buy' from 'Neutral' at Bank of America/Merrill Lynch.

Barrick Gold (ABX +0.25%) was downgraded to 'Sell' from 'Hold' at Mackie Research.

Symantec (SYMC +0.96%) was upgraded to 'Buy' from 'Sell' at UBS with a 12-month price target of $24.

Expedia (EXPE -0.20%) was upgraded to 'Overweight' from 'Neutral' at Atlantic Equities.

Reata Pharmaceuticals (RETA unch) was rated a new 'Outperform' at Cowen.

Credit Acceptance Corp. (CACC -1.48%) was upgraded to 'Neutral' from 'Sell' at Janney Montgomery.

Union Pacific (UNP +0.56%) was downgraded to 'Sector Perform' from 'Sector Outperform' at Scotia Capital.

Charges that FedEx (FDX +0.23%) intentionally shipped illegal online prescriptions were thrown out of court at the request of federal prosecutors.

Hologic (HOLX +0.33%) gained over 1% in after-hours trading after the FDA granted emergency use authorization for the company's new diagnostic assay for Zika virus infection.

Concordia Healthcare (CXRX -1.29%) rose 2% in after-hours trading after it settled a previously disclosed arbitration proceeding with a former financial adviser for $12.5 million. The adviser had claimed he was owed $38.3 million plus accrued interest.

MARKET COMMENTS

September E-mini S&Ps (ESU16 +1.36%) this morning are up sharply by +27.50 points (+1.34%). Friday's closes: S&P 500 -0.33%, Dow Jones -0.33%, Nasdaq -1.13%. The S&P 500 on Friday closed lower on weakness in technology stocks, led by a -2.2% fall in Apple, after regulators in China said the latest iPhone violated a design patent of a Chinese company. Stocks were also undercut by the +0.7% increase in U.S. May building permits, a proxy for future construction, weaker than expectations of +1.3%. Stocks were boosted by positive carryover from a rally in European stocks as Brexit concerns eased temporarily and by reduced interest rate concerns after St. Louis Fed President Bullard (voter) said as the economy stands now "only one Fed rate hike may be necessary over the next 30 months or so."

Sep 10-year T-note prices (ZNU16 -0.28%) this morning are down -14 ticks at a 1-week low. Friday's closes: TYU6 -13.50, FVU6 -6.75. Sep T-notes on Friday closed lower on reduced safe-haven demand for T-notes as Brexit concerns eased after campaigning over Brexit was cancelled for a second day due to the murder of a British lawmaker who was an advocate for the UK to remain in the EU. T-notes were also undercut by the stronger-than-expected U.S. May housing starts report.

The dollar index (DXY00 -0.55%) this morning is down -0.494 (-0.52%) at 1-week low. EUR/USD (^EURUSD) is up +0.0048 (+0.43%). USD/JPY (^USDJPY) is up +0.41 (+0.39%). Friday's closes: Dollar Index -0.363 (-0.38%), EUR/USD +0.0052 (+0.46%), USD/JPY -0.10 (-0.10%). The dollar index on Friday closed lower on dovish comments from St. Louis Fed President Bullard (voter) who said that "only one Fed rate hike may be necessary over the next 30 months or so."

July WTI crude oil (CLN16 +1.75%) this morning is up +83 cents (+1.73%). July gasoline (RBN16 +1.76%) is up +0.0228 (+1.81%). Friday's closes: CLN6 +1.77 (+3.83%), RBN6 +0.0400 (+2.73%). Jul crude oil and gasoline on Friday closed higher on a weaker dollar and short-covering after the sharp 11% slide in crude prices over this past week.

GLOBAL EVENT CALENDAR06/20/2016

    Monday, June 20, 2016
US 1100 ET USDA weekly grain export inspections.
  1215 ET Minneapolis Fed President Neel Kashkari (non-voter) gives prepared remarks and chairs a panel titled Shortfalls of Current Policies Towards Banks at a symposium on Too Big To Fail in Washington D.C.
  1300 ET Treasury auctions $26 billion of 2-year T-notes.
  1600 ET USDA Weekly Crop Progress.
    Tuesday, June 21, 2016
JPN 0030 ET Japan Apr all-industry activity index expected +1.2% m/m, Mar +0.1% m/m.
UK 0430 ET UK May public sector net borrowing expected +9.5 billion pounds, Apr +6.6 billion pounds.
  0600 ET UK Jun CBI trends total orders expected -2 to -10, May -8. Jun CBI trends selling prices, May 2.
GER 0500 ET German Jun ZEW survey expectation of economic growth expected -1.4 to 5.0, May -4.8 to 6.4. Jun ZEW survey current situation expected -0.5 to 52.6, May 53.1.
EUR 0900 ET ECB President Mario Draghi speaks at the European Parliament in Brussels.
US 1000 ET Fed Chair Janet Yellen testifies on monetary policy to the Senate Banking Committee.
  1300 ET Treasury auctions $34 billion of 5-year T-notes.

U.S. STOCK CALENDAR06/20/2016

Company Ticker Time Event Description Period Estimate
International Game Technology PLC IGT 7:00 Annual General Meeting Y 2016  
Facebook Inc FB 14:00 Annual General Meeting Y 2016  
Jazz Pharmaceuticals PLC JAZZ 16:30 JZP-110 Update Call    
DaVita HealthCare Partners Inc DVA   Annual General Meeting    
NorthStar Realty Finance Corp NRF   Annual General Meeting