Morning Call: Stocks climb as new trade talks between China and the U.S. eases trade tensions; Sep E-mini S&Ps up +0.21% at a 1-week high; Dec COMEX copper up +0.84% at a 1-1/2 week high.
Related Stocks
 ESU18 - S&P 500 E-Mini
SymLastChgPct
ESU182,911.00+1.00+0.03%
CLV1871.67+0.55+0.77%
DXY0094.490-0.047-0.05%
ZNZ18118-225+0-045+0.12%
GCZ181,210.7+2.4+0.20%
SIZ1814.365+0.085+0.60%
HGZ182.7395+0.0100+0.37%
RBV182.0265+0.0058+0.29%
QCOM74.06-0.66-0.88%
DVA70.15-0.56-0.79%
RCKT22.84+0.05+0.22%
OXM87.72-2.23-2.48%
TLRD24.94-0.14-0.56%
FND35.08+0.25+0.72%
BRC44.15-0.20-0.45%
SEMG22.45-0.60-2.60%
AQST16.38+0.31+1.93%
SRTS7.18+0.28+4.06%
PI24.15-0.47-1.91%
PGNX6.42+0.42+7.00%
FOMX5.56+0.37+7.13%

Overnight Markets and News

Sep E-mini S&Ps (ESU18 +0.23%) this morning are up +0.21% and European stocks are up +0.39%, both at 1-week highs, on an easing of trade tensions as the U.S. and Chinese governments are working on the logistics for a new round of trade talks. The BOE as expected, voted 9-0 to keep its benchmark interest rate unchanged at 0.75% and to maintain its asset purchase target at 435 billion pounds. The BOE also upgraded its growth forecast as it raised its UK Q3 GDP estimate to +0.5% from 0.4%. The markets are also awaiting the outcome of this morning's ECB meeting and any clues as to when the ECB may tighten its policies. The Turkish lira rallied to a 2-week high after Turkey's central bank raised the 1-week repo rate by 625 bp to 24%, more than expectations for +350 bp increase. Losses in energy stocks were limiting gains in the overall market with Oct WTI crude oil (CLV18 -1.34%) down -1.32%. Asian stocks settled mostly higher : Japan +0.96%, Hong Kong +2.54%, China +1.15%, Taiwan +0.04%, Australia -0.76%, Singapore +0.23%, South Korea +0.02%, India closed for holiday. Asian markets rallied, with Japan's Nikkei Stock Index climbing to a 1-1/2 week high, on renewed hopes that the U.S. and China may enter new trade talks to prevent trade tensions from escalating. Japanese stocks also garnered support on signs of economic strength after Japan Jul core machine orders jumped +11.0% m/m, the biggest increase in 2-1/2 years.

The dollar index (DXY00 +0.07%) is up +0.05%. EUR/USD (^EURUSD +0.03%) is up +0.03%. USD/JPY (^USDJPY +0.27%) is up +0.26.

Dec 10-year T-note prices (ZNZ18 -0-035) are down -3.5 ticks.

Japan Aug PPI was unch m/m and rose +3.0% y/y, weaker than expectations of +0.1% m/m and +3.1% y/y.

Japan Jul core machine orders jumped +11.0% m/m, stronger than expectations of +5.5% m/m and the biggest increase in 2-1/2 years.

U.S. Stock Preview

Key U.S. news today includes: (1) weekly initial unemployment claims (expected +7,000 to 210,000, previous -10,000 to 203,000) and continuing claims (expected +3,000 to 1.710 million, previous -3,000 to 1.707 million), (2) Aug CPI (expected +0.3% m/m and +2.8% y/y, Jul +0.2% m/m and +2.9% y/y) and Aug CPI ex food & energy (expected +0.2% m/m and +2.4% y/y, Jul +0.2% m/m and +2.4% y/y), (3) Treasury auctions $15 billion 30-year T-bonds, (4) Atlanta Fed President Raphael Bostic (voter) discusses the economic outlook and monetary policy to the Mississippi Council of Economic Education, (5) Aug monthly budget statement (expected -$183.0 billion, Jul -$76.9 billion).

Notable Russell 2000 earnings reports today include: none.

U.S. IPO's scheduled to price today: Navios Maritime Containers (NMCI), FVCBankcorp (FVCB), Principia Biopharma (PRNB), Qutoutiao Inc (QTT), BRP Inc (BRPIF).

Equity conferences during the remainder of this week: Credit Suisse Basic Materials Conference on Tue-Thu, Bank of America Merrill Lynch Global Health Care Conference on Wed-Thu, CL King & Associates Best Ideas Conference on Wed-Thu, Deutsche Bank Technology Conference on Wed-Thu, Goldman Sachs Communacopia Conference on Wed-Thu, Barclays Global Financial Services Conference on Wed-Fri, Morgan Stanley Global Health Care Conference on Wed-Fri, Morgan Stanley Laguna Conference on Wed-Fri, BMO Capital Markets Back to School Conference on Thu.

Market Comments

Sep S&P 500 E-minis (ESU18 +0.23%) this morning are up +6.00 points (+0.21%) at a 1-week high. Wednesday's closes: S&P 500 +0.04%, Dow Jones +0.11%, Nasdaq 100 -0.26%. The S&P 500 on Wednesday closed higher on optimistic trade news after the WSJ reported that U.S. Treasury officials proposed a new round of trade talks with China, while Canada appears ready to offer the U.S. limited access to Canada's dairy markets in an attempt to secure a new NAFTA agreement. There was also strength in energy stocks after crude oil rose +1.62% to a 1-week high. Stocks were undercut by weakness in technology stocks and by the Fed Beige Book's report that a number of Fed districts noted that "trade concerns had prompted some businesses to scale back or postpone capital investment."

Dec 10-year T-notes (ZNZ18 -0-035) this morning are down -3.5 ticks. Wednesday's closes: TYZ8 +3.5, FVZ8 +1.25. Dec 10-year T-notes on Wednesday closed higher on the weaker-than-expected U.S. Aug PPI report and on dovish comments from St. Louis Fed President Bullard who said that "the flattening yield curve and subdued market-based inflation expectations suggest that the current monetary policy stance is already neutral or possibly somewhat restrictive."

The dollar index (DXY00 +0.07%) this morning is up +0.052 (+0.05%), EUR/USD (^EURUSD +0.03%) is up +0.0004 (+0.03%), and USD/JPY (^USDJPY +0.27%) is up +0.29 (+0.26%). Wednesday's closes: Dollar Index -0.450 (-0.47%), EUR/USD +0.0020 (+0.17%), USD/JPY -0.37 (-0.33%). The dollar index on Wednesday fell to a 1-1/2 week low and closed lower on dovish comments from St. Louis Fed President Bullard who said the Fed's current monetary policy stance is already neutral or possibly somewhat restrictive. The dollar was also undercut by lower T-note yields, which reduced the dollar's interest rate differentials.

Metals prices this morning are mixed with Dec gold (GCZ18 +0.01%) +0.3 (+0.02%), Dec silver (SIZ18 -0.41%) -0.043 (-0.30%) and Dec copper (HGZ18 +0.56%) +0.023 (+0.84%) at a 1-1/2 week high. Wednesday's closes: Dec gold +8.7 (+0.72%), Dec silver +0.140 (+0.99), Dec copper +5.45 (+2.08%). Metals on Wednesday closed higher with Dec gold and Dec copper at 1-1/2 week highs. Metals prices were boosted by the slide in the dollar index to a 1-1/2 week low and by signs of tighter supplies after LME copper inventories fell -1,275 MT to a 7-1/2 month low of 233,025 MT.

Oct WTI crude oil prices (CLV18 -1.34%) this morning are down -93 cents (-1.32%) and Oct gasoline (RBV18 -0.48%) is -0.94 (-0.46%). Wednesday's closes: Oct crude oil +1.12 (+1.62%), Oct gasoline +2.06 (+1.02%). Oct crude oil and gasoline on Wednesday rallied to 1-week highs and closed higher. Crude oil prices were boosted by a weaker dollar and by the sharp -5.3 million bbl decline in EIA crude inventories to a 3-1/2 year low (vs expectations of -2.0 million bbl). Oil prices were also boosted by concern that East Coast fuel supplies could be disrupted from Hurricane Florence.

Overnight U.S. Stock Movers

Qualcomm (QCOM -1.05%) was reinstated at Barclays with an 'Overweight' rating and a price target of $95.

DaVita (DVA +1.50%) was upgraded to 'Neutral' from 'Underweight' at JPMorgan Chase with a price target of $68.

Rocket Pharmaceuticals (RCKT -2.44%) was rated a new 'Buy' at Ladenburg Thalmann & Co with a price target of $30.

Oxford Industries (OXM -0.70%) slid more than 3% in after-hours trading after it forecast Q3 net sales of $235 million to $245 million, weaker than consensus of $246.7 million.

Tailored Brands (TLRD +1.48%) rose more than 4% in after-hours trading after it said Q2 custom sales doubled versus last year with sales averaging $4 million per week.

Floor & Decor Holdings (FND +1.99%) lost 1% in after-hours trading after it announced that funds affiliated with Ares Management L.P. and Freeman Spogli Management L.P. intend to offer for sale an underwritten secondary offering of 10 million shares of Floor & Decor common stock.

Brady Corp (BRC +0.48%) boosted its quarterly dividend to $0.2125 a share from $0.2075, higher than expectations of $0.21.

SemGroup (SEMG +0.21%) lost 2% in after-hours trading after it announced that ten holders of its stock were selling a total of 1.2 million shares between $23.70 and $23.75 a share.

Aquestive Therapeutics (AQST +1.04%) was rated a new 'Outperform' at Wedbush with a price target of $33.

Sensus Healthcare (SRTS -4.37%) dropped 6% in after-hours trading after it announced that it had commenced a public offering of its common stock. although no size was given.

Impinj (PI +1.13%) rallied 15% in after-hours trading after it reported a Q2 adjusted loss of -19 cents per share, narrower than consensus of -31 cents, and then forecast a Q3 adjusted loss per share of -12 cents to -17 cents, a smaller loss than consensus of -26 cents.

Progenics (PGNX -1.62%) tumbled 16% in after-hours trading after it said the co-primary endpoint in a Phase 3 trial of its Imaging Agent 1404 was not met in detecting clinically meaningful prostate cancer.

Foamix Pharmaceuticals Ltd (FOMX +3.21%) fell almost 3% in after-hours trading after it announced that it intends to offer $70 million of its ordinary shares in an underwritten public offering.