US : Pre Market News – 02 Sep 2016

Sep E-mini S&Ps (ESU16 +0.07%) are up +0.05% and European stocks are up +0.78% in quiet trade ahead of the monthly U.S. payroll data that may provide clues as to the timing of the next Fed rate hike. Energy producing stocks are higher with crude oil (CLV16 +1.18%) up +1.07% after Russian President Putin said he’d like OPEC and Russia, producers of half of the world’s oil, to reach a deal to freeze production with an exemption for Iran. OPEC nations are scheduled to hold informal talks on Sep 27 in Algiers and Russian Energy Minister Novak is due to attend the meeting. Asian stocks settled mixed: Japan -0.01%, Hong Kong +0.45%, China +0.13%, Taiwan -0.15%, Australia -0.79%, Singapore -0.45%, South Korea +0.18%, India +0.38%. Japan’s Nikkei Stock Index rose to a 3-month high before profit-taking set in and the index closed little changed.

The dollar index (DXY00 +0.12%) is up +0.16%. EUR/USD (^EURUSD) is down -0.12%. USD/JPY (^USDJPY) is up +0.36%.

Dec T-note prices (ZNZ16 -0.07%) are down -4.5 ticks after hawkish comments late yesterday from Cleveland Fed President Mester who said there’s a “compelling” case for gradually raising interest rates.

Eurozone Jul PPI of +0.1% m/m and -2.8% y/y was slightly stronger than expectations of +0.1% m/m and -2.9% y/y.

Cleveland Fed President Mester (voter) said there’s a “compelling” case for gradually raising interest rates with the U.S. economy approaching the Fed’s targets on employment and inflation.

Key U.S. news today includes: (1) Aug non-farm payrolls (expected +180,000, Jul +255,000) and Aug unemployment rate (expected -0.1 to 4.8%, Jul unch at 4.9%), (2) Jul trade balance (expected -$ 41.5 billion, Jun -$ 44.5 billion), (3) Aug New York ISM (Jul +15.3 to 60.7), (4) Jul factory orders (expected +2.0%, Jun -1.5% and +0.4% ex transportation), (5) Richmond Fed President Jeffrey Lacker (non-voter) speaks to the Virginia Association of Economists and the Richmond Association for Business Economics on “Interest Rate Benchmarks.”

Russell 1000 companies that report earnings today: none.

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

Equity conferences during the remainder of this week include: none.

Ciena (CIEN +8.02%) was downgraded to ‘Hold’ from ‘Buy’ at Drexel Hamilton LLC.

Greif Inc. (GEF +6.29%) was downgraded to ‘Neutral’ from ‘Buy’ at DA Davidson with a 12-month target price of $ 45.

Relypsa (RLYP -0.03%) was downgraded to ‘Neutral’ from ‘Outperform’ at Wedbush.

Spark Therapeutics (ONCE +1.71%) was rated a ‘Buy” at Stifel with a 12-month price target of $ 73.

lululemon athletica (LULU +0.20%) dropped over 8% in after-hours trading after it said it sees Q3 adjusted EPS of 42 cents to 44 cents, weaker than consensus of 44 cents.

VeriFone Systems (PAY +1.21%) tumbled over 15% in pre-market trading after it cut its fiscal 2017 revenue forecast to down -3%, much weaker than consensus of up 5%, as CEO Galant said they are seeing “significant” EMV slowdown among U.S. small and mid-sized businesses.

Broadcom Ltd. (AVGO +0.38%) dropped 2% in after-hours trading after it said it sees Q4 adjusted net revenue of $ 4.10 billion +/- $ 75 million versus estimates of $ 4.06 billion.

The Gap (GPS -1.29%) lost over 2% in after-hours trading after it reported total Aug comparable sales were down -3%, a bigger decline than expectations of -2.4%.

Cooper Cos. (COO -0.30%) slid over 2% in after-hours trading after it said it expects Q4 revenue of $ 496 million-$ 509 million, below an estimated range of $ 498 million-$ 518 million.

Ambarella (AMBA -0.36%) fell 4% in after-hours trading after the company said it expects fiscal 2017 revenue of “flat to down -5%,” weaker than consensus of down -2%.

Seachange International (SEAC -5.48%) lost nearly 5% in after-hours trading after it cut its view on full-year revenue to $ 83 million-$ 88 million from a prior estimate of $ 110 million-$ 120 million.

MGT Capital Investments (MGT +0.63%) climbed 7% in after-hours trading after it withdrew its $ 10 million mixed securities shelf.

PetroQuest Energy (PQ -9.29%) sank over 10% in after-hours trading after it elected to not make an interest payment and said it will consider other restructuring alternatives if the company is unable to consummate exchange offers.

Sep E-mini S&Ps (ESU16 +0.07%) this morning are up +1.00 point (+0.05%). Thursday’s closes: S&P 500 unch, Dow Jones +0.10%, Nasdaq +0.27%. The S&P 500 on Thursday fell to a 4-week low but recovered and settled little changed. Stocks were undercut by the -3.2 point decline in the U.S. Aug ISM manufacturing index to 49.4, weaker than expectations of -0.6 to 52.0 and the steepest pace of contraction in 7 months. There was also weakness in energy producer stocks after crude oil prices sold off by -3.45% to a 3-week low. Stocks found underlying support from the China Aug manufacturing PMI, which unexpectedly rose +0.5 to 50.4, the fastest pace of expansion in 1-3/4 years.

Dec 10-year T-notes (ZNZ16 -0.07%) this morning are down -4.5 ticks. Thursday’s closes: TYZ6 +1.00, FVZ6 unch. Dec T-notes on Thursday recovered from early losses and closed little changed. T-notes found support from weakness in U.S. manufacturing activity that may keep the Fed from raising interest rates after the Aug ISM manufacturing index contracted at the steepest pace in 7 months. There was also increased safe-haven demand for T-notes after the S&P 500 sold off to a 4-week low.

The dollar index (DXY00 +0.12%) this morning is up +0.156 (+0.16%). EUR/USD (^EURUSD) is down -0.0013 (-0.12%). USD/JPY (^USDJPY) is up +0.37 (+0.36%). Thursday’s closes: Dollar index -0.369 (-0.38%), EUR/USD +0.0039 (+0.35%), USD/JPY -0.20 (-0.19%). The dollar index on Thursday closed lower on the unexpected contraction in the U.S. Aug ISM manufacturing index (-3.2 to 49.4), which may prompt the Fed to delay raising interest rates. GBP/USD climbed to a 4-week high on reduced Brexit concerns after the UK Aug Markit manufacturing PMI expanded at the fastest pace in 10 months (+5.0 to 53.3).

Oct crude oil (CLV16 +1.18%) this morning is up +46 cents (+1.07%) and Oct gasoline (RBV16 +1.71%) is up +0.0176 (+1.38%). Thursday’s closes: CLV6 -1.54 (-3.45%), RBV6 -0.0610 (-4.57%). Oct crude oil and gasoline on Thursday sold off to 3-week lows and closed lower on negative carryover from Wednesday’s EIA data that showed a +2.28 million bbl increase in crude inventories, more than expectations of +1.5 million bbl. Crude oil prices were also undercut by doubts that OPEC will be able to agree on a production freeze when it meets in Algiers later this month after Russian Energy Minister Novak said that a freeze is not needed with crude prices around $ 50 a barrel.