US : Pre Market News – 16 Sep 2016

Dec E-mini S&Ps (ESZ16 -0.43%) are down -0.47% and European stocks are down -1.22% led by a slide in bank stocks. Deutsche Bank, Germany’s largest lender, is down over 7% after it received a $ 14 billion claim from the U.S. Justice Department to settle an investigation into the bank’s sale of residential mortgage-backed securities. Deutsche Bank has rebuffed the $ 14 billion claim and has begun negotiations with the U.S. Justice Department to settle claims over the banks issuing and underwriting of residential mortgage-backed securities from 2005 to 2007. Other European lenders probed in relation to residential mortgage-backed securities also declined with UBS Group AG and Royal Bank of Scotland Group Plc both down over 2%, Credit Suisse Group AG down over 4% and Barclays Plc down nearly 2%. A -1.71% decline in crude oil prices (CLV16 -1.53%) is also undercutting energy producing stocks. Asian stocks settled higher: Japan +0.70%, Australia +1.08%, Singapore +0.78%, India +0.66%. Hong Kong, China, Taiwan and South Korea were all closed for holiday. Asian stocks closed higher as technology companies that supply Apple rallied on signs of strong demand seen for Apple’s new iPhone 7.

The dollar index (DXY00 +0.21%) is up +0.20%. EUR/USD (^EURUSD) is down -0.21%. USD/JPY (^USDJPY) is down -0.28%.

Dec T-note prices (ZNZ16 +0.28%) are up +10.5 ticks as the slide in stocks boosts the safe-haven demand for government debt.

The Bank of Russia cut its benchmark interest rate by 50 bp to 10.0% from 10.5%, right on expectations.

Key U.S. news today includes: (1) Aug CPI (expected +0.1% m/m and +1.0% y/y, Jul unch m/m and +0.8% y/y) and Aug CPI ex food & energy (expected +0.2% m/m and +2.2% y/y, Jul +0.1% m/m and +2.2% y/y), (2) preliminary-Sep University of Michigan U.S. consumer sentiment index (expected +0.8 to 90.6, Aug -0.2 to 89.8).

Russell 1000 companies that report earnings today: Hain Celestial Group (consensus $ 0.54).

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

Equity conferences today include: Morgan Stanley Laguna Conference on Wed-Fri, Citi Global Industrials Conference on Fri, Kazakh Drilling Roundtable on Fri.

Citigroup (C +0.71%) was downgraded to ‘Neutral’ from ‘Buy’ at Goldman Sachs which sites no earnings “inflection.”

Wells Fargo & Co. (WFC -0.80%) was downgraded to ‘Underweight’ from ‘Neutral’ at Atlantic Equities.

Helmerich & Payne (HP +0.86%) was rated a new ‘Buy’ at DA Davidson with a price target of $ 72.

Enterprise Products (EPD -0.31%) was rated a new ‘Buy’ at Evecore ISI with a 12-month target price of $ 30.

Progressive (PGR +1.04%) was upgraded to ‘Market Perform’ from ‘Underperform’ at Keefe, Bruyette & Woods.

McCormick & Co. (MKC +1.19%) was downgraded to ‘Market Perform’ from ‘Outperform’ at Bernstein.

Depomed (DEPO +1.87%) rallied over 10% in after-hours trading after it rejected an approach from Arbor Pharmaceuticals.

Oracle (ORCL +1.52%) dropped over 1% in after-hours trading after it reported Q1 adjusted EPS of 55 cents, below consensus of 58 cents.

Avis Budget Group (CAR +1.98%) jumped over 5% in after-hours trading after it was announced that it will replace Questar in the S&P Midcap 400 effective at the close of trading Friday, September 16.

Twenty-First Century Fox (FOXA +0.59%) slid 1% in after-hours trading after Bernstein downgraded the stock to ‘Market Perform’ from ‘Outperform.’

Pandora Media (P unch) gained almost 2% in after-hours trading after it confirmed a direct licensing pact with Warner Music group for recorded music.

comScore (SCOR +0.23%) climbed over 6% in after-hours trading after it restated financial statements for the past three years.

Novavax (NVAX +0.36%) plummeted over 80% in after-hours trading after it said its vaccine for respiratory disease failed to meet its main goals in a final-stage study in elderly patients.

Dec E-mini S&Ps (ESZ16 -0.43%) this morning are down -10.00 points (-0.47%). Thursday’s closes: S&P 500 +1.01%, Dow Jones +0.99%, Nasdaq +1.56%. The S&P 500 on Thursday closed higher on the +10.8 point increase in the Sep Philadelphia Fed business outlook survey to 12.8, stronger than expectations of -1.0 to 1.0 and the fastest pace of expansion in 19 months. In addition, tech stocks were boosted by the +3.4% rally in Apple to a 9-month high. Stocks were undercut by the decline in U.S. Aug retail sales of -0.3% and -0.1% ex-autos (weaker than expectations of -0.1% and +0.2% ex autos) and the -0.4% decline in U.S. Aug manufacturing production (weaker than expectations of -0.3%).

Dec 10-year T-notes (ZNZ16 +0.28%) this morning are up +10.5 ticks. Thursday’s closes: TYZ6 +0.50, FVZ6 +1.50. Dec T-notes on Thursday closed little changed. T-note prices were undercut by reduced safe-haven demand with the rally in stocks and by the unexpected increase in the Sep Philadelphia Fed business outlook index to a 19-month high. T-notes found support on the weaker-than-expected Aug retail sales and industrial production reports.

The dollar index (DXY00 +0.21%) this morning isup +0.191 (+0.20%) . EUR/USD (^EURUSD) is down -0.0024 (-0.21%). USD/JPY (^USDJPY) is down -0.29 (-0.28%). Thursday’s closes: Dollar index -0.039 (-0.04%), EUR/USD -0.0006 (-0.05%), USD/JPY -0.33 (-0.32%). The dollar index on Thursday closed little changed. The dollar was undercut by the weaker-than-expected U.S. Aug retail sales and industrial production reports, which bolstered the case for the Fed to stand pat on interest rates. The dollar was boosted by the Sep Philadelphia Fed business outlook index, which unexpectedly rose to the highest in 19 months (+10.8 to 12.8).

Oct crude oil (CLV16 -1.53%) this morning is down -75 cents (-1.71%) and Oct gasoline (RBV16 +0.55%) is up +0.0080 (+0.56%). Thursday’s closes: Closes: CLV6 +0.33 (+0.76%), RBV6 +0.0687 (+5.05%). Oct crude oil and gasoline on Thursday closed higher on the rally in stocks and the jump in the crack spread to a 3-week high, which may boost refinery demand for crude to refine into gasoline.