Morning Call: Stronger-than-expected Q2 earnings results from Alphabet boosts technology stocks; Sep E-mini S&Ps up +0.22% at a 5-3/4 month high; Shanghai Composite closes up +1.61% at a 1-month high.
Barchart.com - Thu Jul 26, 4:30PM CDT
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 ESU18 - S&P 500 E-Mini
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ESU182,940.45s+6.45+0.22%
DXY0095.900s+0.325+0.34%
ZNU18118-275s-0-040-0.11%
GCQ181,204.5s-2.9-0.24%
SIU1814.305s-0.093-0.65%
HGU182.8070s+0.0035+0.12%
CLU1867.35s+0.92+1.38%
RBU182.1437s+0.0002+0.01%
GOOGL1,097.91-29.68-2.63%
MOS32.85-0.20-0.61%
WHR107.00-1.34-1.24%
BLUE122.14-4.63-3.65%
APC66.50-0.55-0.82%
KALU95.81-11.82-10.98%
RETA61.27-1.07-1.72%
AMTD49.88-1.03-2.02%
NBL30.70-0.70-2.23%
ZION47.35-1.09-2.25%
MMSI63.81-1.14-1.76%
BRO28.20-0.28-0.98%
RWT16.13-0.12-0.74%

Overnight Markets and News

Sep E-mini S&Ps (ESU18 +0.20%) this morning are up +0.22% at a 5-3/4 month high and European stocks are up +0.81% at a 5-week high. Stronger-than-expected Q2 earnings results from Alphabet is pushing the stock up 4.5% in pre-market trading to lead the overall market higher. An unexpected increase in Eurozone manufacturing activity is also giving a boost to European stocks after the Eurozone Jul Markit manufacturing PMI unexpectedly rose +0.2 to 55.1. Asian stocks settled mostly higher: Japan +0.51%, Hong Kong +1.44%, China +1.61%, Taiwan +0.44%, Australia +0.61%, Singapore -0.03%, South Korea +0.32%, India +0.29%. China's Shanghai Composite rose to a 1-month high and boosted Asian equity markets after China's State Council announced a package of policies to boost domestic demand. The State Council issued a tax cut for research spending and announced that special bonds will be issued for infrastructure investment. The yuan tumbled to a new 1-year low against the dollar on signs the PBOC is stepping up efforts to support bank lending. The PBOC offered 502 billion yuan ($74 billion) of Medium-Term Lending Facility (MLF) credit with 1-year maturity to major banks in the open market, the most in such an operation since the MLF was introduced in 2014.

The dollar index (DXY00 -0.17%) is down -0.21%. EUR/USD (^EURUSD +0.14%) is up +0.16%. USD/JPY (^USDJPY -0.25%) is down -0.27%.

Sep 10-year T-note prices (ZNU18 +0-040) are up +3.5 ticks.

The Eurozone Jul Markit manufacturing PMI unexpectedly rose +0.2 to 55.1, stronger than expectations of -0.2 to 54.7.

The Eurozone Jul Markit composite PMI fell -0.6 to 54.3, weaker than expectations of -0.1 to 54.8.

The German Jul Markit/BME manufacturing PMI unexpectedly rose +1.4 to 57.3, stronger than expectations of -0.4 to 55.5.

The UK Jul CBI trends total orders fell -2 to 11, stronger than expectations of -5 to 8.

The Japan Jul Nikkei manufacturing PMI fell -1.4 to a 1-1/2 year low of 51.6.

U.S. Stock Preview

Key U.S. news today includes: (1) May FHFA house price index (expected +0.4% m/m, Apr +0.1% m/m), (2) Jul Markit manufacturing PMI (expected -0.3 to 55.1, Jun -1.0 to 55.4) and Jul Markit services PMI (expected unch at 56.5, Jun -0.3 to 56.5), (3) Jul Richmond Fed manufacturing survey (expected -2 to 18, Jun +4 to 20), (4) Treasury auctions $35 billion 2-year T-notes.

Notable S&P 500 earnings reports today include: AT&T (consensus $0.87), Harley-Davidson (1.41), Biogen (5.19), Eli Lilly (1.30), Lockheed Martin (3.92), Kimberly-Clark (1.57), Verizon (1.14), Texas Instruments (1.30), Robert Half (0.85).

U.S. IPO's scheduled to price today: Bloom Energy (BE), Aquestive Therapeutics (AQST).

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


Market Comments

Sep S&P 500 E-minis (ESU18 +0.20%) this morning are up +6.25 points (+0.22%) at a 5-3/4 month high. Monday's closes: S&P 500 +0.18%, Dow Jones -0.06%, Nasdaq 100 +0.29%. The S&P 500 on Monday closed higher on the U.S. Jun Chicago Fed national activity index of +0.86 to 0.43, stronger than expectations of +0.40 to 0.25. The stock market also benefited from strength in technology stocks. Stocks were undercut by the unexpected decline in U.S. Jun existing home sales by -0.6% to a 5-month low of 5.38 million (weaker than expectations of +0.2% to 5.44 million) and the statement from G-20 finance leaders that said trade tensions threaten the global economy.

Sep 10-year T-notes (ZNU18 +0-040) this morning are up +3.5 ticks. Monday's closes: TYU8 -16.00, FVU8 -9.50. Sep 10-year T-notes on Monday fell to a 1-month low and closed lower on supply pressures as the Treasury auctions $119 billion of T-notes and floating-rate notes this week. There were also increased inflation expectations as the 10-year T-note breakeven inflation rate rose to a 1-week high.

The dollar index (DXY00 -0.17%) this morning is down -0.198 (-0.21%), EUR/USD (^EURUSD +0.14%) is up +0.0019 (+0.16%) and USD/JPY (^USDJPY -0.25%) is down -0.30 (-0.27%). Monday's closes: Dollar Index +0.220 (+0.23%), EUR/USD -0.0032 (-0.27%), USD/JPY -0.06 (-0.05%). The dollar index on Monday recovered from a 1-week low and closed higher on the increase in the 10-year T-note yield to a 5-week high, which improved the dollar's interest rate differentials. The dollar also found some support on U.S. Treasury Secretary Mnuchin's comment at the weekend G-20 meeting in Brazil that America's longstanding commitment to a strong dollar remains intact.

Metals this morning are higher with Aug gold (GCQ18 +0.05%) +1.6 (+0.13%), Sep silver (SIU18 +0.58%) +0.095 (+0.62%), and Sep copper (HGU18 +0.78%) +0.025 (+0.91%). Monday's closes: Aug gold -5.50 (-0.45%), Sep silver -0.124 (-0.80%), Sep copper +0.0095 (-0.34%). Metals on Monday closed lower on a stronger dollar and on the unexpected decline in U.S. Jun existing home sales, which is negative for copper demand.

Sep WTI crude oil prices (CLU18 +0.54%) this morning are up +40 cents (+0.59%) and Sep gasoline (RBU18 +0.20%) is +0.0031 (+0.15%). Monday's closes: Sep crude -0.37 (-0.54%), Sep gasoline +1.85 (+0.91%). Sep crude oil and gasoline on Monday settled mixed. Crude oil prices were boosted by the escalation of geopolitical tensions after President Trump warned Iran of unspecified "consequences" if it threatens the U.S. after Iranian President Hassan Rouhani warned the U.S. to not block Iran's oil exports. Crude oil prices were also supported by the increase in the crack spread to a 4-week high, which provides incentive for refiners to boost crude purchases to refine the crude into gasoline. Crude oil prices were undercut by the stronger dollar.

Overnight U.S. Stock Movers

Alphabet (GOOGL +1.10%) climbed more than 4% in pre-market trading after it reported Q2 revenue ex-TAC of $26.24 billion, higher than consensus of $25.55 billion.

Mosaic (MOS +0.21%) was upgraded to 'Buy' from 'Underperform' at Bank of America/Merrill Lynch with a price target of $35.

Whirlpool (WHR -0.72%) tumbled nearly 9% in after-hours trading after it reported Q2 net sales of $5.14 billion, less than expectations of $5.29 billion, and then forecast full-year ongoing EPS of $14.20 to $14.80, weaker than consensus of $15.62.

Bluebird Bio (BLUE -1.72%) fell more than 3% in after-hours trading after it announced that it had commenced an underwritten public offering of $400 million in shares of its common stock.

Anadarko (APC +0.16%) was rated a new 'Buy' at Mizuho Securities USA with a price target of $102.

Kaiser Aluminum (KALU +0.99%) reported Q2 adjusted EPS of $1.68, better than consensus of $1.63.

Moelis & Co. (@symbolPercentChange(MC reported Q2 revenue of $220.4 million, higher than consensus of $183.7 million.

Reata Pharmaceuticals (RETA +64.98%) slipped 2% in after-hours trading after it announced its intention to sell 3.0 million shares of its Class A common stock in an underwritten public offering.

TD Ameritrade Holding (AMTD +2.84%) gained 1% in after-hours trading after it reported Q3 revenue of $1.38 billion, better than consensus of $1.35 billion.

Noble Energy (NBL -0.29%) was rated a new 'Buy' at Mizuho Securities USA with a price target of $51.

Zions Bancorporation (ZION +1.49%) fell more than 3% in after-hours trading after it reported Q2 EPS of 89 cents, weaker than consensus of 92 cents.

Merit Medical Systems (MMSI +0.72%) gained more than 1% in after-hours trading after it reported Q2 revenue of $224.8 million, well above consensus of $214.7 million.

Brown & Brown (BRO -0.24%) reported Q2 revenue of $473.1 million, above consensus of $471.1 million.

Redwood Trust (RWT -0.81%) dropped 3% in after-hours trading after it announced its intends to sell 6.25million shares of its common stock in an underwritten public offering.