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Morning Call 6/26

|Includes: AMCX, CAR, CBIO, CPRT, ELOX, HRTX, HYRE, INTC, NTGN, NVDA, SENS, TJX, Uxin (UXIN), WFC, XERS
Summary

News.

Earnings.

IPOs.

Morning Call: Global Stocks Mixed As Trade Risks Remain; Sep E-Mini S&Ps Down -0.10%; Euro Stoxx 50 Up +0.38%; Aug COMEX Gold Down -0.76% At A 6-1/2 Month Low.

Barchart.com - 1 hour ago

Overnight Markets And News

Sep E-mini S&Ps (ESU18 -0.13%) this morning are down -0.10%, although European stocks are up +0.38% as global trade fears persist. European stocks caught a bid after S&P Global Ratings raised Greece's long-term credit rating to B+ from B with a stable outlook, a sign the country's finances are improving. Asian stocks settled mixed: Japan +0.02%, Hong Kong -0.28%, China -0.52%, Taiwan -0.41%, Australia -0.21%, Singapore +0.61%, South Korea -0.20%, India +0.06%. China's Shanghai Composite fell to a new 2-year low as trade war risks intensified and the Chinese yuan tumbled to a 6-month low against the dollar at 6.5815. The yuan has fallen sharply over the past week with losses picking up after the PBOC on Sunday lowered banks' reserve requirements. Japan's Nikkei Stock Index recovered from a 3-week low and closed higher after a rally in bank and utility stocks led the overall market higher.

The dollar index (DXY00 +0.21%) is up +0.24%. EUR/USD (^EURUSD -0.26%) is down -0.32% on dovish comments from ECB Governing Council member Hansson who said the ECB will remain "rather expansionary" even after the end of QE net purchases in December. USD/JPY (^USDJPY -0.11%) is down -0.11% and matched Monday's 2-week low.

Sep 10-year T-note prices (ZNU18 -0-005) are down -1 tick.

ECB Governing Council member Hansson said trade war risks are large and "scary." Global supply chains are "very fragile" and "when these get disrupted then consequences can be rather big." The ECB will remain "rather expansionary" even after the end of QE net purchases in December.

Japan May PPI services rose +1.0% y/y, right on expectations and matched April's increase as the biggest in 3-years.

U.S. Stock Preview

Key U.S. news today includes: (1) Apr S&P CoreLogic composite-20 home price index (expected +0.4% m/m and +6.8% y/y, Mar +0.53% m/m and +6.79% y/y), (2) Jun Richmond Fed manufacturing index (expected -1 to 15, May +19 to 16), (3) Jun Conference Board U.S. U.S. consumer confidence index (expected unch at 128.0, May +2.4 to 128.0), (4) Treasury auctions $34 billion of 2-year T-notes, (5) Atlanta Fed President Raphael Bostic (voter) speaks at an event in Birmingham, AL, (6) Dallas Fed President Robert Kaplan (non-voter) speaks at an event in Houston, TX.

Notable Russell 1000 earnings reports today include: Lennar Corp (consensus $0.44), IHS Markit (0.57).

U.S. IPO's scheduled to price today: Uxin (NASDAQ:UXIN), Neon Therapeutics (NASDAQ:NTGN), HyreCar (NASDAQ:HYRE).

Equity conferences this week: Crane's Money Fund Symposium on Mon-Tue, BMO Chemicals Conference on Tue, JMP Securities Boston Real Estate Forum on Thu, Berenberg Blockchain Conference on Thu, GSMA Mobile World Congress Shanghai on Fri.

Market Comments

Sep S&P 500 E-minis (ESU18 -0.13%) this morning are down -2.75 points (-0.10%). Monday's closes: S&P 500 -1.37%, Dow Jones -1.33%, Nasdaq 100 -2.21%. The S&P 500 on Monday fell to a 3-week low and closed sharply lower on building trade tensions that threaten to derail the global economy. There was also a sell-off in technology stocks on Treasury Secretary Mnuchin's early tweet suggesting that Friday's restrictions on investment may be on more countries than just China and that there may be substantially increased restrictions on U.S. technology exports. There was weakness in mining stocks and metals producers after Jul copper fell -1.30% to a 2-1/2 month low on concern an escalation of trade tensions will harm economic growth and demand for industrial metals. A positive factor for stocks was the +6.7% increase in U.S. May new home sales to a 6-month high of 689,000, stronger than expectations of +0.8% to 667,000.

Sep 10-year T-notes (ZNU18 -0-005) this morning are down -1 tick. Monday's closes: TYU8 +6.50, FVU8 +4.75. Sep 10-year T-notes on Monday closed higher on safe-haven demand with the heightened trade tensions and the sharp global stock market sell-offs. There was also some carry-over support from a rally in German 10-year bunds to a 3-week high. T-note prices were undercut by the sharp +6.7% rise in May U.S. new home sales to a 6-month high of 689,000.

The dollar index (DXY00 +0.21%) this morning is up +0.225 (+0.24%), EUR/USD (^EURUSD -0.26%) is down -0.0037 (-0.32%) and USD/JPY (^USDJPY -0.11%) is down -0.12 (-0.11%). Monday's closes: Dollar Index -0.241 (-0.25%), EUR/USD +0.0053 (+0.45%), USD/JPY -0.20 (-0.18%). The dollar index on Monday fell to a 1-week low and closed lower on the sell-off in the S&P 500 to a 3-week low, which pushed USD/JPY down to a 2-week low on increased safe-haven demand for the yen. The dollar index was also hurt by the decline in T-note yields, which undercut the dollar's interest rate differentials.

Metals this morning are weaker with Aug gold (GCQ18 -0.77%) -9.7 (-0.76%) at a 6-1/2 month low, July silver (SIN18-0.60%) -0.118 (-0.72%) at a 1-3/4 month low, and July copper (HGN18 -0.08%) -0.001 (-0.03%). Monday's closes: Aug gold -1.80 (-0.14%), Jul silver -0.131 (-0.80%), Jul copper -3.95 (-1.30%). Metals on Monday closed lower with Jul copper at a 2-1/2 month low. Metals prices were undercut by fund selling of gold as long gold positions in ETFs fell to a 2-1/2 month low. Industrial metals prices were hurt by the increase in global trade tensions. Metals found some support on the slide in the dollar index to a 1-week low.

Aug WTI crude oil prices (CLQ18 +0.51%) this morning are down -1 cent (-0.01%) and Aug gasoline (RBQ18 +1.34%) is +0.0099 (+0.49%). Monday's closes: Aug crude -0.50 (-0.73%), Aug gasoline -2.00 (-0.97%). Aug crude oil and gasoline on Monday closed lower on the slump in global stocks on concern that the escalation of trade tensions will slow economic growth and energy demand. Crude oil prices were also undercut by the slide in the crack spread to a 4-month low, which reduces incentive for refiners to purchase crude to refine into gasoline. A supportive factor was the fall in the dollar index to a 1-week low.

Overnight U.S. Stock Movers

Intel (INTC -3.41%) was downgraded to 'Underperform' from 'Hold' at Bernstein.

TJX Cos (TJX +0.14%) was downgraded to 'Neutral' from 'Overweight' at Atlantic Equities LLP with a price target of $90.

AMC Networks (AMCX -1.04%) was downgraded to 'Neutral' from 'Buy' at Goldman Sachs.

Avis Budget (CAR -7.53%) was resumed at 'Mogen Stanley with an 'Underweight' rating with a price target of $30.

Nvidia (NVDA -4.71%) was rated a new 'Buy' at Benchmark Company LLC with a price target of $280.

Copart (CPRT -2.69%) may initially move higher this morning after it was announced that it will replace Dr Pepper Snapple Group in the S&P 500 prior to the opening of trading on Monday, July 2.

Wells Fargo (WFC +0.04%) agreed to pay over $5 million to settle SEC allegations that it improperly encouraged customers to trade products they should have held in order to secure high fees and commissions for the brokerage.

Elox Pharmaceuticals (ELOX -2.23%) was rated a new 'Buy' at SunTrust Robinson Humphrey with a price target of $26.

Heron Therapeutics (HRTX +0.24%) slid more than 3% in after-hours trading after it announced that it had commenced a registered underwritten public offering of approximately $200 million of shares of its common stock.

Xeris Pharmaceuticals (XERS +1.60%) rose 7% in after-hours trading after its Glucgon rescue pen showed positive efficacy and safety data in a Phase 3 study in treating hypoglycemia in adults and children with type 1 diabetes.

Catalyst Biosciences (CBIO +3.14%) gained almost 3% in after-hours trading after holder Point 72 Asset Management reported a 5.5% passive stake in the company.

Senseonics Holdings (SENS -5.09%) dropped more than 7% in after-hours trading after it announced that it had commenced a registered underwritten public offering of $80 million of shares of its common stock.