Morning Call: Global stocks mostly higher after JPMorgan Chase reports better-than-expected Q2 earnings results; Sep E-mini S&Ps up +0.04% at a new 4-month high; Dollar index up +0.32% at a 2-week high. - Fri Jul 13, 6:41AM CDT
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 ESU18 - S&P 500 E-Mini

Overnight Markets and News

Sep E-mini S&Ps (ESU18 -0.01%) this morning are up +0.04% at a 4-month high and European stocks are up +0.35%. JPMorgan Chase is up over 1% in pre-market trading and is boosting bank stocks after it reported stronger-than-expected Q2 earnings results. On the negative side, China reported its trade surplus with the U.S. rose to a record $28.97 billion, highlighting the cause of the escalating trade war. China's exports to the U.S. in Jun also climbed to a record $42.62 billion. Energy stocks are weaker as well with Aug WTI crude oil (CLQ18 -0.21%) down -0.24%. Crude oil prices weakened on concern about slowing demand from China, the world's second-largest crude consumer, after China Jun crude imports fell -12% m/m to 8.39 million bpd, the lowest in 6-months. Asian stocks settled mostly higher: Japan +1,85%, Hong Kong +0.16%, China -0.23%, Taiwan +1.17%, Australia unch, Singapore +0.23%, South Korea +1.44%, India -0.02%. Chinese stocks erased an early rally and closed slightly lower as the yuan weakened to a 1-1/2 week low against the dollar. Chinese stocks had found support on stronger-than-expected China Jun exports, a sign of economic strength. Japan's Nikkei Stock Index climbed to a 3-week high as exporters rallied on a weaker yen that boosts exporters' earnings prospects after USD/JPY climbed to a new 6-month high.

The dollar index (DXY00 +0.42%) is up +0.32% at a 2-week high. EUR/USD (^EURUSD -0.38%) is down -0.37% at a 1-1/2 week low. USD/JPY (^USDJPY +0.08%) is up +0.04% at a new 6-month high.

Sep 10-year T-note prices (ZNU18 +0-040) are up +4.5 ticks.

China Jun new yuan loans were 1.84 trillion yuan, stronger than expectations of +1.535 trillion yuan. Jun aggregate financing rose +1.18 trillion yuan, weaker than expectations of +1.40 trillion yuan.

The China Jun trade balance was in surplus by +$41.61 billion, wider than expectations of +$27.72 billion and the largest surplus in 6-months. Jun exports rose +11.3% y/y, stronger than expectations of +9.5% y/y. Jun imports rose +14.1% y/y, weaker than expectations of +21.3% y/y.

U.S. Stock Preview

Key U.S. news today includes: (1) Jun import price index (expected +0.1% m/m and +4.6% y/y, May +0.6% m/m and +4.3% y/y), (2) preliminary-Jul University of Michigan U.S. consumer sentiment index (expected -0.2 to 98.0, Jun +0.2 to 98.2), (3) Fed releases semi-annual monetary policy report that Fed Chair Jerome Powell will present when he testifies before the Senate Banking Committee on July 17, (4) Atlanta Fed President Raphael Bostic (voter) holds a town hall chat at the UVA Northern Virginia Center.

Notable Russell 1000 earnings reports today include: Citigroup (consensus $1.56), JP Morgan Chase (2.22), Wells Fargo (1.12), First Republic (1.16), PNC Financial Services Group (2.57).

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 -0.01%) this morning are up +1.00 point (+0.04%) at a new 4-month high. Thursday's closes: S&P 500 +0.87%, Dow Jones +0.91%, Nasdaq 100 +1.69%. The S&P 500 on Thursday rallied to a 4-month high and closed higher on a potential easing of trade tensions after China's Vice Minister of Commerce, Wang Shouwen, said "we should sit down and try to find a solution to this trade problem." Stocks were also supported by the -18,000 decline in U.S. weekly unemployment claims to a 2-month low of 214,000, better than expectations of -6,000 to 225,000. Technology stocks showed strength as the Nasdaq Composite rallied to a new all-time high.

Sep 10-year T-notes (ZNU18 +0-040) this morning are up +4.5 ticks. Thursday's closes: TYU8 -3.00, FVU8 -2.25. Sep 10-year T-notes on Thursday closed lower on the stronger-than-expected U.S. economic data with weekly jobless claims falling -18,000 and the the Jun CPI rising +2.3% y/y, matching a 10-year high.

The dollar index (DXY00 +0.42%) this morning is up +0.308 (+0.32%) at a 2-week high, EUR/USD (^EURUSD -0.38%) is down -0.0043 (-0.37%) at a 1-1/2 week low and USD/JPY (^USDJPY +0.08%) is up +0.05 (+0.04%) at a new 6-month high. Thursday's closes: Dollar Index +0.086 (+0.09%), EUR/USD -0.0002 (-0.02%), USD/JPY +0.54 (+0.48%). The dollar index on Thursday rose to a 1-week high and closed higher on the stronger than expected U.S. core CPI report of +2.3% which was hawkish for Fed policy. The dollar was also boosted by Cleveland Fed President Mester's comment that the U.S. economy "can certainly handle two more rate increases this year."

Metals this morning are weaker with Aug gold (GCQ18 -0.56%) -5.1 (-0.41%) at a 1-week low, Sep silver (SIU18 -1.17%) -0.142 (-0.89%), and Sep copper (HGU18 -0.65%) -0.012 (-0.43%). Thursday's closes: Aug gold +2.20 (+0.18%), Sep silver +0.160 (+1.01%), Sep copper +0.0335 (+1.22%). Metals on Thursday closed higher on the U.S. Jun core CPI of +2.3% y/y, which matched a 10-year high and was positive for gold demand as an inflation hedge. Metals prices were also boosted by the stronger-than-expected +1.3% m/m increase in Eurozone May industrial production, which was supportive for copper demand.

Aug WTI crude oil prices (CLQ18 -0.21%) this morning are down -17 cents (-0.24%) and Aug gasoline (RBQ18 -0.19%) is -0.0066 (-0.32%). Thursday's closes: Aug crude -0.05 (-0.07%), Aug gasoline +1.03 (+0.50%). Aug crude oil and gasoline on Thursday settled mixed with Aug crude at a 2-week low. Crude oil prices were undercut by the rally in the dollar index to a 1-week high and by increased production by OPEC+ as Jun OPEC compliance dropped to 126% from 159% in May and non-OPEC compliance fell to 61% from 68% in May, the lowest in 4 months. Crude oil prices were supported by the statement from the IEA that "the world's spare capacity cushion may be stretched to the limit" and OPEC's Gulf members may need to pump almost as much crude as they can to make up for the supply losses from Venezuela, Iran and Libya.

Overnight U.S. Stock Movers

JPMorgan Chase (JPM +0.43%) rose more than 1% in pre-market trading after it reported Q2 FICC sales and trading revenue of $3.45 billion, better than consensus of $3.20 billion.

BlackRock (BLK +0.75%) was upgraded to 'Outperform from 'Market Perform' at Keefe, Bruyette & Woods with a price target of $617.

Monro (MNRO +1.07%) was upgraded to 'Buy from 'Neutral' at Goldman Sachs with a price target of $71.

VF Corp (VFC +0.46%) was upgraded to 'Buy' from 'Neutral' at Bank of America/Merrill Lynch.

Broadcom (AVGO -13.74%) was downgraded to 'Market Perform' from 'Outperform' at BMO Capital Markets.

Oshkosh (OSK +1.98%) was rated anew 'Buy' at Longbow Research with a price target of $88.

McDonald’s (MCD +0.32%) lost 1% in after-hours trading after the Illinois Department of Public Health received confirmation of about 90 cases of cyclophorias, possibly liked to salads produced for McDonald's restaurants.

Children's Place (PLCE -1.93%) was rated an 'Outperform' at Wedbush with a price target of $150.

Ingredion (INGR -0.22%) fell 4% in after-hours trading after it cut its 2018 adjusted EPS forecast to $7.50-$7.80 from a prior view of $7.90-$8.20, below consensus of $7.90, due to lower than expected North America performance.

AT&T (T +1.13%) lost 1% in after-hours trading after the U.S. Justice Department said it is appealing a judge's decision allowing AT&T's takeover of Time Warner.

Avenue Therapeutics (ATXI -0.27%) was rated a new 'Outperform' at Oppenheimer with a price target of $8.

Chaparral Energy (CHPE -5.01%) was rate a new 'Buy' at Johnson Rice & Co.

Gogo (GOGO +5.01%) rallied 6% in after-hours trading after it said it was considering options that include splitting into separate companies servicing commercial and business aircraft.