US : Pre Market News – 08 Aug 2016

Sep E-mini S&Ps (ESU16 +0.17%) are up +0.18% at a fresh all-time nearest-futures high and European stocks are up +0.66% on positive carryover from last Friday’s stronger-than-expected U.S. Jul non-farm payrolls. European stocks rose and commodity prices also gained after German Jun industrial production rose more than expected at the fastest pace in 5 months. Asian stocks settled higher: Japan +2.44%, Hong Kong +1.57%, China +0.93%, Taiwan 0.64%, Australia +0.74%, Singapore +1.51%, South Korea +0.69%, India +0.37%. Chinese stocks gained after weaker than expected China Jul exports and imports bolstered speculation the government may boost stimulus measures, and Japanese stocks were led higher by a rally in exporters as USD/JPY rose.

The dollar index (DXY00 +0.17%) is up +0.14%. EUR/USD (^EURUSD) is down -0.02%. USD/JPY (^USDJPY) is up +0.49%.

Sep T-note prices (ZNU16 -0.06%) are down -1 tick, but recovered nearly all of their losses from a 1-week low after Fed Governor Powell said he sees a “very gradual” path for interest rate increases.

Eurozone Aug Sentix investor confidence rose +2.5 to 4.2, stronger than expectations of +1.3 to 3.0.

German Jun industrial production rose +0.8% m/m, was stronger than expectations of +0.7% m/m and the largest increase in 5 months.

The China Jul trade balance unexpectedly widened to a surplus of +$ 52.31 billion, bigger than expectations of +$ 47.30 billion and the most in 6 months. Jul exports fell -4.4% y/y, weaker than expectations of -3.5% y/y and Jul imports fell -12.5% y/y, weaker than expectations of -7.0% y/y and the biggest decline in 5 months.

Fed Governor Powell said he sees an increasing risk that the U.S. is trapped in a prolonged period of subdued growth that requires a “very gradual” path for interest rate increases.

Key U.S. news today includes: (1) USDA weekly grain export inspections, and (2) USDA Weekly Crop Progress.

There are 7 of the S&P 500 companies that report earnings today: Tyson Foods (consensus $ 1.06), Allergan (3.31), Intl Flavors and Fragrances (1.40), DaVita HealthCare Partners (0.98), Endo Intl (0.74), Microchip Technology (0.75), News Corp (0.13).

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

Equity conferences this week: Cowen and Company Communications Infrastructure Summit on Mon-Tue, Pacific Crest Global Technology Leadership Forum on Mon-Tue, UBS Financial Services Conference on Tue, J.P. Morgan Auto Conference on Tue-Wed, Oppenheimer Technology, Internet & Communications Conference on Tue-Wed, Jefferies Industrials Conference on Tue-Thu, Canaccord Genuity Growth Conference on Wed-Thu, Jefferies Financial Services Conference on Wed-Thu, Goldman Sachs Power, Utilities, MLP, and Pipeline Conference on Thu.

U.S. Concrete (USCR -4.15%) was rated a new ‘Buy’ at Suntrust Robinson with a price target of $ 75.

EOG Resources (EOG +7.03%) was upgraded to ‘Buy’ from ‘Hold’ at Wunderlich Securities.

Wyerhaeuser (WY +0.70%) was downgraded to ‘Neutral’ from ‘Buy’ at DA Davidson.

Level 3 Communications (LVLT +0.59%) was rated a new ‘Buy’ at BTIG with a price target of $ 63.

JP Morgan Chase (JPM +2.70%) is down -0.5% in pre-market trading after it was downgraded to ‘Neutral’ from ‘Buy’ at Citigroup.

Mattress Firm Holding (MFRM +1.47%) surged 100% in pre-market trading after Steinhoff International Holdings NV bought the company for $ 2.4 billion.

Delta Air Lines (DAL +3.09%) fell nearly 2% in pre-market trading after a computer-system failure grounded all of the carrier’s flights across the U.S.

U.S. Steel (X +1.92%) gained over 1% in after-hours trading after the U.S. International Trade Commission (ITC) said that U.S. Steel can proceed with its case that charges Chinese manufacturers of carbon and alloy steel of misappropriating U.S. Steel trade secrets that a U.S. judge had put on hold July 6.

Berkshire Hathaway ({=BRK/B=}) lost almost 1% in after-hours trading after it reported Q2 operating EPS of $ 2,803, below consensus of $ 2,911.

Rackspace Holdings (RAX +10.24%) rose nearly 3% in after-hours trading, adding to last Friday’s +10% surge, on reports that Apollo Global Management LLC is reportedly offering $ 3.5 billion for the company.

Lantheus Holdings (LNTH +54.24%) dropped almost 3% in after-hours trading after the company registered 17.8 million shares for sale for top share holder Avista Capital Partners.

Sep E-mini S&Ps (ESU16 +0.17%) this morning are up +4.00 points (+0.18%) at a new all-time high. Friday’s closes: S&P 500 +0.86%, Dow Jones +1.04%, Nasdaq +1.00%. The S&P 500 on Friday climbed to a new record high and closed higher on the +255,000 increase in U.S. July payrolls (stronger than expectations of +180,000) and the +0.3% m/m increase in U.S. July average hourly earnings (stronger than expectations of +0.2% m/m) that help sustain the economic recovery.

Sep 10-year T-notes (ZNU16 -0.06%) this morning are down -1 tick. Friday’s closes: TYU6 -26.00, FVU6 -17.25. Sep T-notes on Friday fell to a 1-week low and closed sharply lower on the larger-than-expected increase in U.S. July non-farm payrolls, which may prompt the Fed to raise interest rates sooner rather than later. T-notes were also undercut by reduced safe-haven demand with the rally in the S&P 500 to a record high.

The dollar index (DXY00 +0.17%) this morning is up +0.138 (+0.14%). EUR/USD (^EURUSD) is down -0.0002 (-0.02%). USD/JPY (^USDJPY) is up +0.50 (+0.49%). Friday’s closes: Dollar index +0.436 (+0.46%), EUR/USD -0.0044 (-0.40%), USD/JPY +0.60 (+0.59%). The dollar index on Friday closed higher on the stronger-than-expected U.S. July payroll report, which bolstered the case for the Fed to raise interest rates. In addition, EUR/USD fell to a 1-week low after German Jun factory orders unexpectedly fell -0.4% m/m, weaker than expectations of +0.5% m/m.

Sep WTI crude oil (CLU16 +1.46%) this morning is up +62 cents (+1.48%) at a 1-week high and Sep gasoline (RBU16 +0.68%) is up +0.0083 (+0.60%) at a 2-week high. Friday’s closes: CLU6 -0.13 (-0.31%), RBU6 +0.0083 (+0.53%). Sep crude and gasoline on Friday settled mixed. Crude oil prices were undercut by the rally in the dollar and by the Baker Hughes report that showed that active U.S. oil rigs rose by +7 rigs in the week ended Aug 5 to a 4-1/2 month high of 381, the sixth straight week of increases. Crude oil prices found support on the rally in the S&P 500 to a new record high and on strong refinery demand after the crack spread rose to a 1-1/4 month high.