Morning Call: U.S. and European stocks slide after the G-20 warns trade tensions threaten expansion in the world economy; Sep E-mini S&Ps down -0.12%; Shanghai Composite closes up +1.07% at a 4-week high.
Barchart.com - Mon Jul 23, 6:40AM CDT
Related Stocks
 ESU18 - S&P 500 E-Mini
SymLastChgPct
ESU182,857.75+5.50+0.19%
CLU1866.07+0.16+0.24%
DXY0096.290+0.189+0.20%
ZNU18120-110+0-030+0.08%
GCQ181,184.8+8.3+0.71%
SIU1814.790+0.159+1.09%
HGU182.6740+0.0450+1.71%
RBU181.9866+0.0057+0.29%
FCAU15.77+0.16+1.02%
PZZA43.93+0.21+0.48%
WBA69.99+0.37+0.53%
BJ25.71+0.61+2.43%
STI73.72+0.17+0.23%
HAS98.53+0.29+0.30%
LPNT64.45-0.05-0.08%
THC33.99+0.68+2.04%
CYH3.41+0.06+1.79%
PYPL85.45+0.13+0.15%
CACQ21.25-0.50-2.30%
ENFC28.25-0.30-1.05%
CLF9.86+0.07+0.72%
JCP1.79+0.03+1.70%

Overnight Markets and News

Sep E-mini S&Ps (ESU18 -0.09%) this morning are down -0.12% and European stocks are down -0.46% after finance chiefs from the Group of 20 nations expressed concern in their final statement Sunday from this weekend’s meeting in Brazil that trade tensions threaten expansion in the global economy. Strength in energy stocks limited losses in U.S. stock indexes as Sep WTI crude oil (CLU18 +1.07%) rose +1.25% after President Trump warned Iran of grave "consequences" if it threatens the U.S. Losses in European markets were contained after the Bundesbank said in its monthly report that "the overall economic performance in the spring quarter of 2018 probably showed a little more momentum than at the beginning of the year." Asian stocks settled mixed: Japan -1.33%, Hong Kong +0.11%, China +1.07%, Taiwan +0.14%, Australia -0.93%, Singapore -0.12%, South Korea -0.80%, India +0.61%. China's Shanghai Composite climbed to a 4-week high, led by a rally in bank stocks, after the PBOC released guidelines aimed at asset management practices that were deemed less severe than markets had expected. Japan's Nikkei Stock Index retreated as exporter stocks sold-off after the yen climbed to a 2-week high on reports that the BOJ would soon make changes to its QE program and raise its target on the 10-year which currently stands at zero percent.

The dollar index (DXY00 -0.02%) is down -0.05% at a 1-week low. EUR/USD (^EURUSD -0.01%) is down -0.07%. USD/JPY (^USDJPY -0.27%) is down -0.28% at a 2-week low.

Sep 10-year T-note prices (ZNU18 +0-030) are up +4 ticks.

In its monthly report, the Bundesbank said, "the overall economic performance in the spring quarter of 2018 probably showed a little more momentum than at the beginning of the year."

The statement following this weekend's G-20 meeting said global growth remains robust and many emerging-market countries are better prepared to face crises, but risks to the world economy have increased. The main risks are "rising financial vulnerabilities, heightened trade and geopolitical tensions, global imbalances, inequality and structurally weak growth."

U.S. Stock Preview

Key U.S. news today includes: (1) Jun Chicago Fed national activity index (expected +0.45 to 0.30, May -0.57 to -0.15), (2) Jun existing home sales (expected +0.2% to 5.44 million, May -0.4% to 5.43 million), (3) USDA weekly grain export inspections, (4) USDA Jun Cold Storage, (5) USDA weekly Crop Progress.

Notable S&P 500 earnings reports today include: Alphabet (consensus $9.51), Whirlpool (3.70), Halliburton (0.58), Zions Bancorp (0.92), Whirlpool (3.70), Illinois Tool (1.97), Hasbro (0.29), Cadence Design System (0.40).

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

Equity conferences during the remainder of this week: Unconventional Resources Technology Conference on Mon, Google Cloud Next 18 on Tue-Thu


Market Comments

Sep S&P 500 E-minis (ESU18 -0.09%) this morning are down -3.25 points (-0.12%). Friday's closes: S&P 500 -0.40%, Dow Jones -0.53%, Nasdaq 100 -0.51%. The S&P 500 on Friday closed lower on ramped up trade tensions after President Trump told CNBC he's "ready to go" with $500 billion in new tariffs on Chinese goods and after German Chancellor Merkel said the European Union is ready to retaliate against any U.S. auto tariffs. In addition, comments from President Trump weighed on the dollar and spurred long liquidation in stocks when he accused China and the Eurozone of manipulating their currencies and that a rising dollar is curbing America's "competitive edge."

Sep 10-year T-notes (ZNU18 +0-030) this morning are up +4 ticks. Friday's closes: TYU8 -10.00, FVU8 -3.50. Sep 10-year T-notes on Friday closed lower on President Trump's criticism of the Fed for its recent interest rate increases when he said that "tightening now hurts all that we have done," which may encourage the Fed to get its rate hikes out of the way as soon as possible to avoid a multi-year attack from Mr. Trump.

The dollar index (DXY00 -0.02%) this morning is down -0.049 (-0.05%) at a 1-week low, EUR/USD (^EURUSD -0.01%) is down -0.0008 (-0.07%) and USD/JPY (^USDJPY -0.27%) is own -0.31 (-0.28%) at a 2-week low. Friday's closes: Dollar Index -0.705 (-0.74%), EUR/USD +0.0082 (+0.70%), USD/JPY -1.06 (-0.94%). The dollar index on Friday closed lower on jawboning by President Trump who talked the dollar lower when he said "China, the EU and others have been manipulating their currencies and interest rates lower" and that the stronger dollar and rising U.S. interest rates are undermining America's "competitive edge." USD/JPY slid to a 1-week low as the yen strengthened on a Reuters report that the BOJ is debating tweaks to its QE program and may modify its yield-curve target.

Metals this morning are mixed with Aug gold (GCQ18 -0.05%) -0.8 (-0.06%), Sep silver (SIU18 -0.25%) -0.044 (-0.28%), and Sep copper (HGU18 +0.44%) +0.011 (+0.40%). Friday's closes: Aug gold +7.10 (+0.58%), Sep silver +0.1472 (+0.95%), Sep copper +0.0605 (+2.24%). Metals on Friday closed higher on a weaker dollar and on the -23,377 MT decline in weekly Shanghai copper inventories to a 5-month low of 211,319 MT and the -1,150 MT drop in LME copper inventories to 255,325 MT, a sign of tighter global copper supplies.

Sep WTI crude oil prices (CLU18 +1.07%) this morning are up +85 cents (+1.25%) and Sep gasoline (RBU18 +1.06%) is +0.0283 (+1.39%). Friday's closes: Sep crude +0.02 (+0.03%), Sep gasoline +2.08 (+1.03%). Sep crude oil and gasoline on Friday closed higher on a weaker dollar, and the statement from Saudi Arabia's Energy Ministry that said Saudi crude exports this month will be "roughly equal" to June and will drop by -100,000 bpd in August. Gains were limited by an escalation of trade tensions that threaten economic growth and energy demand after President Trump told CNBC he's "ready to go" with $500 billion in new tariffs on Chinese goods.

Overnight U.S. Stock Movers

Fiat Chrysler Automobiles NV (FCAU -1.08%) was downgraded to 'Neutral' from 'Outperform' at MainFirst Bank AG.

Papa John's (PZZA +1.16%) was downgraded to 'Sell' from 'Hold' at Stifel.

Walgreens Boots Alliance (WBA +0.08%) was downgraded to 'Market Perform' from 'Outperform' at Cowen.

BJ's Wholesale Club Holdings (BJ +0.82%) was rated a new 'Buy' at Bank of America/Merrill Lynch with a price target of $30.

SunTrust Banks (STI +2.64%) was upgraded to 'Buy' from 'Neutral' at B Riley FBR with a price target of $81.

Hasbro (HAS +0.26%) jumped 7% in pre-market trading after it reported Q2 net revenue of $904.5 million, well above expectations of $839.3 million.

LifePoint Health (LPNT -1.44%) surged 38% in after-hours trading after Reuters reported that Apollo Global Management LLC is in advanced talks to acquire the hospital chain. Other healthcare stocks rallied on the news as well with Tenet Healthcare (THC -1.57%) up 5% and Community Health Systems (CYH -2.17%) up almost 4% in after-hours trading.

PayPal Holdings (PYPL +0.10%) may open higher initially this morning after DealReporter said that Third Point Offshore Investors Ltd is "poking around' PayPal.

Caesars Entertainment (CACQ -2.30%) was rated a new 'Buy' at Bank of America/Merrill Lynch with a price target of $14.

Entegra Financial (ENFC -1.16%) was downgraded to 'Market Perform' from 'Outperform' at FIG Partners LLC.

Cleveland-Cliffs (CLF +12.67%) was upgraded to 'Overweight' from 'Neutral' at JPMorgan Chase with a price target of $15.

JC Penney (JCP -2.34%) lost -0.4% in after-hours trading after CCO Joe McFarland said he will the company on August 1 to become executive vice president of stores for Lowe's, effective August 15.