Morning Call: U.S. and European stocks are mixed; Sep E-mini S&Ps down -0.21% as a 23% drop in Facebook undercuts U.S. stock indexes; Euro Stoxx 50 up +0.56% at a 1-1/4 month high as automakers rally.
Barchart.com - Thu Jul 26, 6:36AM CDT
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 ESU18 - S&P 500 E-Mini
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ESU182,857.75+5.50+0.19%
DXY0096.298+0.197+0.20%
ZNU18120-110+0-030+0.08%
GCQ181,184.8+8.3+0.71%
SIU1814.790+0.159+1.09%
HGU182.6735+0.0445+1.69%
CLU1866.08+0.17+0.26%
RBU181.9866+0.0057+0.29%
FB173.80-0.90-0.52%
BIIB345.22+2.29+0.67%
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CTXS110.86-0.46-0.41%
PYPL85.45+0.13+0.15%
XLNX71.02+0.41+0.58%
QCOM66.06+0.30+0.46%
MDLZ42.71+0.60+1.42%
KNX32.90+0.20+0.61%
PCMI22.85-0.90-3.79%
AMD19.77+0.44+2.28%
F9.55+0.04+0.42%
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AKS4.37+0.13+3.07%

Overnight Markets and News

Sep E-mini S&Ps (ESU18 -0.17%) this morning are down -0.21% as technology stocks slide, led by a -23% plunge in Facebook in pre-market trading after the company reported fewer than expected daily active users in June and after Facebook CFO Wehner said sales growth will continue to slow through the rest of the year. European stocks are up +0.56% at a 1-1/4 month high as automakers rally after European Commission President Juncker and President Trump both pledged to "hold off on other tariffs" while they negotiate a deal to expand trade. The markets now await today's interest rate decision from the ECB and the press conference from ECB President Draghi for any clues as to the future of ECB monetary policy. Asian stocks settled mixed: Japan -0.12%, Hong Kong -0.48%, China -0.74%, Taiwan +0.41%, Australia -0.05%, Singapore +0.05%, South Korea +0.71%, India +0.34%. Chinese stocks and they yuan moved lower as uncertainty over the U.S. trade dispute and its impact on Chinese fiscal policy persists. Japanese stocks moved lower as exporters declined when USD/JPY dropped to a 2-week low.

The dollar index (DXY00 -0.07%) is up +0.06%. EUR/USD (^EURUSD -0.14%) is down -0.15%. USD/JPY (^USDJPY -0.13%) is down -0.14% at a 2-week low after the Japan 10-year bond yield jumped to a 1-year high of 0.102%, which boosted the yen on speculation the BOJ may announce a change to its QE policy at next week's BOJ meeting.

Sep 10-year T-note prices (ZNU18 -0-075) are down -8 ticks.

Japan Jun PPI services rose +1.2% y/y, stronger than expectations of +1.0% y/y and the largest increase in 3-1/4 years.

German Aug GfK consumer confidence unexpectedly fell -0.1 to a 13-month low of 10.6, weaker than expectations of no change at 10.7.

U.S. Stock Preview

Key U.S. news today includes: (1) weekly initial unemployment claims (expected +8,000 to 215,000, previous -8,000 to 207,000) and continuing claims (expected -18,000 to 1.733 million, previous +8,000 to 1.751 million), (2) Jun durable goods orders (expected +3.0% and +0.5% ex transportation, May -0.4% and unch ex transportation), (3) Jun wholesale inventories (expected +0.4%, May +0.6%), (4) USDA weekly Export Sales, (5) Jul Kansas City Fed manufacturing activity index (expected -3 to 25, Jun -1 to 28), (6) Treasury auctions $30 billion of 7-year T-notes.

Notable S&P 500 earnings reports today include: Amazon.com (consensus $2.49), Mastercard (1.53), Intel (0.96), Expedia (0.89), Starbucks (0.61), Amgen (3.56), Electronic Arts (0.07), Newmont Mining (0.24), International Paper (1.70), PulteGroup (0.75), Bristol-Myers Squibb (0.87), BorgWarner (1.10), Comcast (0.60), American Airlines (1.59), Valero (1.98), Marathon Petroleum (2.03), Martin Marietta Materials (2.85), Xerox (0.83), Southwest Airlines (1.23), Under Armour (-0.09), Invesco (0.66), Raytheon (2.35), Baxter (0.71), S&P Global (2.13), CME Group (1.72), McDonald's (1.93),

U.S. IPO's scheduled to price today: Berry Petroleum (BRRP), Opera Ltd (OPRA), Endava Plc (DAVA).

Equity conferences during the remainder of this week: Google Cloud Next 18 on Tue-Thu


Market Comments

Sep S&P 500 E-minis (ESU18 -0.17%) this morning are down -6.00 points (-0.21%). Wednesday's closes: S&P 500 +0.91%, Dow Jones +0.68%, Nasdaq 100 +1.38%. The S&P 500 on Wednesday rallied to a 5-3/4 month high and closed higher on a US/EU tariff cease-fire deal while negotiations are underway for a new trade deal. There was strength in energy stocks after crude oil prices rose +1.14% to a 1-week high. There was also strength in technology stocks after the Nasdaq 100 climbed to a new record high. Stocks were undercut by the -5.3% decline in U.S. Jun new home sales to an 8-month low of 631,000, weaker than expectations of -3.1% to 668,000.

Sep 10-year T-notes (ZNU18 -0-075) this morning are down -8 ticks. Wednesday's closes: TYU8 +3.00, FVU8 +1.00. Sep 10-year T-notes on Wednesday closed higher on the bigger-than-expected decline in U.S. Jun new home sales to an 8-month low. There was also strong demand for the Treasury's $36 billion auction of 5-year T-notes that had a bid-to-cover ratio of 2.61, stronger than the 12-auction average of 2.49 and the highest in 14 months.

The dollar index (DXY00 -0.07%) this morning is up +0.052 (+0.06%), EUR/USD (^EURUSD -0.14%) is down -0.0018 (-0.15%) and USD/JPY (^USDJPY -0.13%) is down -0.15 (-0.14%). Wednesday's closes: Dollar Index -0.245 (-0.26%), EUR/USD +0.0042 (+0.36%), USD/JPY -0.22 (-0.20%). The dollar index on Wednesday closed lower on the decline in T-note yields, which reduced the dollar's interest rate differentials. The dollar was also undercut by the weaker-than-expected U.S. Jun new home sales that fell to an 8-month low.

Metals this morning are mixed with Aug gold (GCQ18 -0.33%) -3.7 (-0.30%), Sep silver (SIU18 -0.19%) -0.029 (-0.19%), and Sep copper (HGU18 +0.12%) +0.005 (+0.16%). Wednesday's closes: Aug gold +6.3 (+0.51%), Sep silver +0.069 (+0.44%), Sep copper +0.0070 (+0.25%). Metals on Wednesday closed higher with Sep silver at a 1-week high and Sep copper at a 2-week high. Metals prices were supported by a weaker dollar and by signs of tighter global copper supplies after LME copper inventories fell -2,025 MT to a 6-month low of 212,400 MT.

Sep WTI crude oil prices (CLU18 +0.04%) this morning are down -10 cents (-0.14%) and Sep gasoline (RBU18 +0.51%) is +1.01 (+0.48%). Wednesday's closes: Sep crude +0.78 (+1.14%), Sep gasoline +2.64 (+1.28%). Sep crude oil and gasoline on Wednesday closed higher with Sep crude at a 1-week high and Sep gasoline at a 1-1/2 week high. Crude oil prices were boosted by a weaker dollar and by the -6.15 million decline in weekly EIA crude inventories to a 3-1/3 year low, more than double expectations for a -3.0 million bbl decline. Crude oil prices were also boosted by the -1.127 million bbl decline in crude supplies at Cushing to a 3-1/2 year low.

Overnight U.S. Stock Movers

Facebook (FB +1.32%) plunged 23% in pre-market trading after it reported 1.47 billion active daily users in June, below forecasts of 1.48 billion users, and reported Q2 revenue of $13.23 billion, weaker than consensus of $13.33 billion. Also, CFO Wehner said sales growth will continue to slow through the rest of the year.

Biogen (BIIB +2.95%) slumped 10% in after-hours trading after it said its experimental Alzheimer drug slowed the progression of the earliest stages of the disease by 30% in a study, although expectations had been for an even higher percentage.

Mohawk Industries (MHK -0.99%) tumbled 13% in after-hours trading after it reported Q2 adjusted EPS of $3.51, well below consensus of $3.90.

Citrix Systems (CTXS +1.52%) rose more than 2% in after-hours trading after it reported Q2 adjusted EPS of $1.28, better than consensus of $1.20, and then forecast Q3 adjusted EPS of $11.23 to $1.26, above consensus of $1.22.

PayPal Holdings (PYPL -0.04%) slid nearly 3% in after-hours trading after it forecast Q3 net revenue of $3.62 billion to $3.67 billion, weaker than consensus of $3.71 billion.

Xilinx (XLNX +0.34%) jumped almost 10% in after-hours trading after it reported Q1 net revenue of $684.4 million, above consensus of $675.3 million, and then forecast full-year adjusted sales of $2.8 to $2.9 billion, better than consensus of $2.76 billion.

Qualcomm (QCOM +0.97%) rallied 5% in after-hours trading after it said it will abandon its $44 billion bid to acquire NXP Semiconductors NV after Chinese regulators failed to approve the acquisition.

Mondelez International (MDLZ -0.05%) climbed 3% in after-hours trading after it reported Q2 adjusted EPS of 56 cents, higher than consensus of 54 cents.

Knight-Swift Transportation Holdings (KNX +2.78%) dropped more than 13% in after-hours trading after it reported Q2 adjusted EPS of 56 cents, weaker than consensus of 57 cents.

PCM Inc (PCMI -4.55%) jumped 14% in after-hours trading after it raised its full-year adjusted EPS view to $2.20 to $2.30 from an April estimate of $2.00 to $2.10 and sees gross margins of 15.6%-15.85% from a prior view of 15%-15.5%.

Advanced Micro Devices (AMD -0.86%) rose nearly 6% in after-hours trading after it reported Q2 revenue of $1.76 billion. better than consensus of $1.72 billion.

Ford Motor (F -0.47%) slid more than 4% in after-hours trading after it cut its full-year adjusted EPS outlook to $1.30 to $1.50 from a May 16 view of $1.45 to $1.70.

U.S. Steel (X +1.03%) and AK Steel Holding (AKS +0.19%) both fell more than 2% in after-hours trading after President Trump said he will "resolve" the steel tariffs with the European Union.