Morning Call: U.S. and European stocks slightly higher ahead of U.S. Jul non-farm payrolls; Sep E-mini S&Ps up +0.04%; Dollar index up +0.05% at a 2-week high.
Barchart.com - Fri Aug 03, 6:35AM CDT
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 ESU18 - S&P 500 E-Mini
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DXY0095.321+0.273+0.29%
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SHAK59.54-0.86-1.42%
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Overnight Markets and News

Sep E-mini S&Ps (ESU18 +0.17%) this morning are little changed ahead of the morning's monthly jobs report, up +0.04%. European stocks are higher by +0.39% as bank stocks climb, led by a nearly 3% gain in Credit Agricole SA after it reported stronger-than-expected quarterly revenue. Gains in European stocks were limited, and GBP/USD slid to a 2-week low on Brexit concerns after BOE Governor Carney said the chance of a no-deal Brexit is "uncomfortably high." Asian stocks settled mixed: Japan +0.06%, Hong Kong -0.14%, China -1.00%, Taiwan +0.76%, Australia -0.10%, Singapore -0.63%, South Korea +0.70%, India +1.05%. Chinese stocks closed lower and were under pressure on China/U.S. trade war concerns that also weighed on the yuan which fell to a 14-1/2 month low against the dollar.

The dollar index (DXY00 -0.11%) is up +0.05% at a 2-week high on expectations for a strong U.S. Jul non-farm payroll report this morning that will keep the Fed on pace for a Sep rate hike. EUR/USD (^EURUSD +0.12%) is down -0.02% at a 5-week low on economic growth concerns after Eurozone Jun retail sales rose less than expected. USD/JPY (^USDJPY -0.05%) is down -0.01%.

Sep 10-year T-note prices (ZNU18 unch) are up +2 ticks.

Eurozone Jun retail sales rose +0.3% m/m and +1.2% y/y, weaker than expectations of +0.4% m/m and +1.4% y/y.

The UK Jul Markit/CIPS services PMI fell -1.6 to 53.5, weaker than expectations of -0.4 to 54.7.

The China Jul Caixin services PMI fell -1.1 to 52.8, weaker than expectations of -0.4 to 53.5.

U.S. Stock Preview

Key U.S. news today includes: (1) Jul non-farm payrolls (expected +193,000, Jun +213,000) and Jul unemployment rate (expected -0.1 to 3.9%, Jun +0.2 to 4.0%), (2) Jun trade deficit (expected -$46.5 billion, May -$43.1 billion), (3) final-Jul Markit U.S. services PMI (expected unch at 56.2, prelim-Jul -0.3 to 56.2), (4) Jul ISM non-manufacturing index (expected -0.5 to 58.6, Jun +0.5 to 59.1).

Notable S&P 500 earnings reports today include: Berkshire Hathaway (consensus $3366), Kraft Heinz (0.92), CenterPoint Energy (0.32), Dish Network (0.71), Cboe Global Markets (1.03), Pinnacle West Capital (1.47).

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

Equity conferences during the remainder of this week: none.


Market Comments

Sep S&P 500 E-minis (ESU18 +0.17%) this morning are up +1.25 points (+0.04%). Thursday's closes: S&P 500 +0.49%, Dow Jones -0.03%, Nasdaq 100 +1.36%. The S&P 500 recovered from a 1-1/2 week low and closed higher on positive economic data with the as-expected +0.7% increase in U.S. Jun factory orders. In addition, there was strength in technology stocks led by a near 3% gain in Apple to a new record high. Stocks opened lower on China's comment that it is ready to retaliate against U.S. tariffs and on U.S. Commerce Secretary Ross' comment that the U.S. will keep turning up the pressure on China for as long as the country refuses to level the economic playing field.

Sep 10-year T-notes (ZNU18 unch) this morning are up +2 ticks. Thursday's closes: TYU8 +5.00, FVU8 +3.75. Sep 10-year T-notes on Thursday closed higher on carry-over support from a decline in the Japanese 10-year bond yield from a 1-1/2 year high after the BOJ unexpectedly bought bonds in an unscheduled operation in an attempt to reduce the bond yield. There was also safe-haven demand for T-notes with the increased US/China trade tensions.

The dollar index (DXY00 -0.11%) this morning is up +0.046 (+0.05%) at a new 2-week high. EUR/USD (^EURUSD +0.12%) is down -0.0002 (-0.02%) at a 5-week low. USD/JPY (^USDJPY -0.05%) is down -0.01 (-0.01%). Thursday's closes: Dollar Index +0.535 (+0.57%), EUR/USD -0.0075 (-0.64%), USD/JPY -0.07 (-0.06%). The dollar index on Thursday rallied to a 2-week high and closed higher on weakness in the Chinese yuan which slumped to a 14-month low against the dollar. The dollar was also supported by the U.S. factory orders report of +0.7%.

Metals this morning are weaker with Dec gold (GCZ18 -0.05%) -3.0 (-0.25%), Sep silver (SIU18 +0.32%) -0.020 (-0.13%) and Sep copper (HGU18 +0.88%) -0.002 (-0.07%). Thursday's closes: Dec gold -7.5 (-0.61%), Sep silver -0.067 (-0.43%), Sep copper -0.0100 (-0.36%). Metals on Thursday closed lower with Dec gold at a 2-week low and Sep silver at a 1-1/2 week low. Metals prices were undercut by the rally in the dollar index to a 2-week high and by ramped-up China/U.S. trade tensions that may curb economic growth and industrial metals demand after China said it was ready to retaliate against any U.S. tariffs. Copper was undercut by reduced demand after LME copper canceled warrants fell -500 MT to 26,400 MT, a 2-1/4 year low.

Sep WTI crude oil (CLU18 +0.06%) this morning is down -4 cents (-0.06%). Sep gasoline (RBU18 +0.12%) is -0.44 (-0.21%). Thursday's closes: Sep crude +1.30 (+1.92%), Sep gasoline +2.30 (+1.12%). Sep crude oil and gasoline on Thursday recovered from early losses and closed higher. Crude oil prices were supported by a report from Genscape that said crude supplies at Cushing, the delivery point for WTI futures, will fall more than a million bbl in the latest week to a new 3-3/4 year low. Crude oil prices were undercut by increased OPEC crude production after OPEC Jul crude output rose +300,00 bpd to a 10-month high of 32.6 million bpd.

Overnight U.S. Stock Movers

Motorola Solutions (MSI +0.51%) was downgraded to 'Underweight' from 'Neutral' at JPMorgan Chase.

Allergan (AGN +0.16%) was upgraded to 'Buy' from 'Neutral' at Mizuho Securities with a price taarget of $210.

Medifast (MED +3.27%) surged 18% in after-hours trading after it reported Q2 adjusted EPS of $1.16, stronger than consensus of 98 cents, and then raised its full-year earnings outlook per diluted share to $4.35-$4.45 from a prior estimate of $3.55-$3.65.

Take-Two Interactive Software (TTWO +0.89%) jumped 7% in after-hours trading after it reported Q1 adjusted revenue of $288.3 million, well above consensus of $258.7 million.

Stericycle (SRCL +0.50%) slumped 15% in after-hours trading after it reported Q2 revenue of $883.3 million, below consensus of $897.3 million, and then forecast full-year revenue of $3.45 billion to $3.54 billion, weaker than consensus of $3.57 billion.

Cerner (CERN +1.70%) gained more than 3% in after-hours trading after it reported Q2 revenue of $1.37 billion, above consensus of $1.33 billion, and then forecast full-year revenue of $5.33 billion to $5.45 billion, the midpoint above consensus of $5.38 billion.

Fluor (FLR +1.19%) rose 4% in after-hours trading after it reported Q2 revenue of $4.88 billion, higher than consensus of $4.58 million.

American International Group (AIG +0.31%) fell nearly 6% in after-hours trading after it reported Q2 adjusted EPS of $1.05, weaker than consensus of $1.21.

Shake Shack (SHAK +2.78%) dropped more than 5% in after-hours trading after it forecast full-year revenue of $446 million to $450 million, below consensus of $452.1 million.

Wingstop (WING +2.49%) climbed more than 4% in after-hours trading after it reported Q2 revenue of $37.0 million, better than consensus of $36.9 million.

Acacia Communications (ACIA +3.86%) jumped 6% in after-hours trading after it reported Q2 revenue of $65 million, higher than consensus of $63.4 million, and forecast Q3 revenue of $86 million to $94 million, well above consensus of $73.7 million.

Tesaro (TSO +1.70%) tumbled 10% in after-hours trading after it reported a Q2 loss per share of -$3.04, wider than consensus of -$2.61.

Symantec (SYMC +2.20%) dropped more than 9% in after-hours trading after it said it sees Q2 adjusted EPS of 31 cents to 35 cents, weaker than consensus of 38 cents, and then forecast full-year adjusted EPS of $1.47 to $1.57, the midpoint below consensus of $1.56.

Cardtronics PLC (CATM -3.07%) rallied 16% in after-hours trading after it reported Q2 revenue of $341 million, well above consensus of $324 million.

Immersion (IMMR +2.52%) dropped nearly 9% in after-hours trading after it reported a Q2 adjusted loss per share of -18 cents, wider than expectations of -9 cents.

El Pollo Loco Holdings (LOCO +0.44%) slid almost 5% in after-hours trading after it forecast full-year proforma EPS of 68 cents to 70 cents, the midpoint below consensus of 70 cents.