US : Pre Market News – 06 Sep 2016

Sep E-mini S&Ps (ESU16 +0.09%) are up +0.09% and European stocks are up +0.18% on speculation that last Friday’s weaker-than-expected U.S. Aug non-farm payrolls will keep the Fed from raising interest rates this month. Also, signs of increased M&A activity lifted stock prices with Monsanto up nearly 3% in pre-market trading after Bayer AG raised its takeover bid for a second time and said the two companies are in advanced talks. In addition, Navistar International surged 26% in pre-market trading after the WSJ reported that Volkswagen is said to be near a deal to take a 19.9% stake in the company. Energy-producing stocks are higher as well with crude oil prices up +1.33% after Saudi Arabia and Russia pledged to cooperate to stabilize oil markets, although they failed to announce any specific measures to boost prices. Asian stocks settled mostly higher: Japan +0.26%, Hong Kong +0.58%, China +0.61%, Taiwan +1.01%, Australia -0.29%, Singapore +1.47%, South Korea +0.50%, India +1.56%.

The dollar index (DXY00 -0.27%) is down -0.26%. EUR/USD (^EURUSD) is up +0.16%. USD/JPY (^USDJPY) is down -0.15% as the yen strengthened after Koichi Hamada, an economic advisor to Prime Minister Abe, said the BOJ should wait until after the Fed decides on interest rates before it acts itself.

Dec T-note prices (ZNZ16 +0.02%) are little changed, down -0.5 of a tick.

German Jul factory orders of +0.2% m/m and -0.7% y/y were weaker than expectations of +0.5% m/m and -0.2% y/y.

Key U.S. news today includes: (1) final-Aug Markit services PMI (expected +0.2 to 51.1), (2) Aug ISM non-manufacturing PMI (expected -0.2 to 55.3, Jul -1.0 to 55.5), (3) San Francisco Fed President John Williams (non-voter) speaks on the economic outlook at an event in Reno, NV, (4) USDA weekly grain export inspections, (5) USDA Weekly Crop Progress.

Russell 1000 companies that report earnings today: Marvel Technology Group (consensus $ 0.11), Casey’s General Stores (1.81).

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

Equity conferences during the remainder of this week include: Citi Global Technology Conference on Tue-Thu, Barclays CEO Energy Power Conference on Tue-Thu, Barclays Global Consumer Staples Conference on Tue-Thu, Barclays Back-to-School Conference on Tue-Thu, Cowen and Company Global Transportation Conference on Wed, Citi Biotech Conference on Wed, Avondale Partners Tech Services Conference on Wed, Goldman Sachs Global Retailing Conference on Wed-Thu, Drexel Hamilton Technology, Media and Telecom Conference on Wed-Thu, Keefe, Bruyette, & Woods Insurance Conference on Wed-Thu, Goldman Sachs Financial Technology Conference on Thu, Evercore ISI Real Estate Conference on Thu, Gabelli & Company Aircraft Supplier & Connectivity Conference on Thu.

Monsanto (MON +0.50%) is up nearly 3% in pre-market trading after Bayer AG raised its takeover bid for a second time as it up its offer to $ 127.50 a share and said the two companies are in advanced talks.

Navistar International (NAV +3.99%) soared over 25% in pre-market trading after the WSJ reported that Volkswagen is said to be near a deal to take a 19.9% stake in the company and a person with knowledge of the matter said the stake could ultimately provide a stepping stone for a full takeover.

Danaher (DHR -0.31%) agreed to buy Cepheid (CPHD +0.47%) in a deal valued at about $ 4 billion or $ 53 a share in cash, a 54% premium to last Friday’s close.

State Street (STT +0.73%) was downgraded to ‘Hold’ from ‘Buy’ at Sandler O’Neill with a 12-month target price of $ 73.

CBS Corp. (CBS +0.35%) was rated a new ‘Buy’ at Drexel Hamilton LLC with a 12-month target price of $ 65.

Equinix (EQIX +1.28%) was upgraded to ‘Outperform’ from ‘Market Perform’ at Oppenheimer with an 18-month target price of $ 420.

Credit Acceptance (CACC -0.49%) was downgraded to ‘Sell’ from ‘Neutral’ at Compass Point Research & Trading LLC with a 12-month target price of $ 170.

Lions Gate Entertainment (LGF +1.34%) was rated a new ‘Buy’ at Brean Capital with a 12-month target price of $ 27.

AvalonBay Communities (AVB -0.20%) was upgraded to ‘Buy’ from ‘Hold’ at Sandler O’Neill with a 12-month target price of $ 200.

Herbalife (HLF +0.29%) gained almost 1% in after-hours trading after Carl Icahn disclosed that he bought 306,846 shares of Herbalife on Aug 31 at $ 60.39 to bring his total holdings to 19.6 million shares.

PennantPark Investment (PNNT +1.00%) rose 4% in after-hours trading after it declared a 28 cent quarterly dividend.

Sep E-mini S&Ps (ESU16 +0.09%) this morning are up +2.00 points (+0.09%). Friday’s closes: S&P 500 +0.42%, Dow Jones +0.39%, Nasdaq +0.31%. The S&P 500 on Friday closed higher on speculation the Fed may delay a rate hike after U.S. Aug non-farm payrolls rose +151,000, less than expectations of +180,000. Also, a rally in energy stocks boosted the overall market after the price of crude oil rose +2.97%. On the negative side was the +0.1% m/m and +2.4% y/y increase in U.S. Aug avg hourly earnings, weaker than expectations of +0.2% m/m and +2.5% y/y.

Dec 10-year T-notes (ZNZ16 +0.02%) this morning are down -0.5 of a tick. Friday’s closes: TYZ6 -5.50, FVZ6 -0.50. Dec T-notes on Friday erased an early rally and closed lower as stocks rallied, which reduced the safe-haven demand for government debt. T-note prices were also weighed down on speculation that even though the increase in U.S. Aug non-farm payrolls (+151,000 vs. expectations of +180,000), was not as big as expected, it may still be strong enough for the Fed to raise interest rates.

The dollar index (DXY00 -0.27%) this morning is down -0.250 (-0.26%). EUR/USD (^EURUSD) is up +0.0018 (+0.16%). USD/JPY (^USDJPY) is down -0.15 (-0.15%). Friday’s closes: Dollar index +0.191 (+0.20%), EUR/USD -0.0041 (-0.37%), USD/JPY +0.69 (+0.67%). The dollar index on Friday closed higher on speculation that Friday’s U.S. Aug non-farm payrolls, although weaker than expected, is still strong enough to warrant a Fed interest rate increase. The dollar also garnered support from a weak yen as USD/JPY rallied to a 5-week high on expectations for the BOJ to expand stimulus while the Fed hikes rates.

Oct crude oil (CLV16 +1.22%) this morning is up +59 cents (+1.33%) and Oct gasoline (RBV16 +1.88%) is up +0.0245 (+1.88%). Friday’s closes: CLV6 +1.28 (+2.97%), RBV6 +0.0169 (+1.33%). Oct crude oil and gasoline on Friday closed higher due to comments from Russian President Putin who 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. A rally in stocks was also supportive for crude as it boosts confidence in the economic outlook and energy demand.