US : Pre Market News – 30 Sep 2016

Dec E-mini S&Ps (ESZ16 -0.09%) are down -0.03% and European stocks are down -1.48% at a 1-3/4 month low on concerns over the health of the European banking sector. Deutsche Bank AG is down 5% at a record low on reports that hedge funds are moving their business out of the bank. Commerzbank AG is also down 5% after being downgraded to hold at HSBC Plc and ING Groep NV is down over 2% on a report that the bank will announce thousands of job cuts next week. Also, the 3-month cross-currency basis swap, the rate for banks to convert euro payments into dollars and a gauge of risk for the Eurozone financial system, fell to -57 bp below the euro interbank-offered rate, the most negative in 4-1/4 years. Asian stocks settled mostly lower: Japan -1.46%, Hong Kong -1.86%, China +0.21%, Taiwan -1.12%, Australia -0.65%, Singapore -0.56%, South Korea -1.10%, India +0.14%.

The dollar index (DXY00 +0.29%) is up +0.32% at a 1-week high. EUR/USD (^EURUSD) is down -0.47% at a 1-week low. USD/JPY (^USDJPY) is up +0.13%.

Dec 10-year T-note prices (ZNZ16 +0.04%) are up +4 ticks at a 1-1/2 month high.

The Eurozone Aug unemployment rate remained unch at 10.1%, weaker than expectations of -0.1 to 10.0%.

The Eurozone Sep CPI estimate rose +0.4% y/y, right on expectations. The Sep core CPI rose +0.8% y/y, weaker than expectations of +0.9% y/y.

German Aug retail sales fell -0.4% m/m, weaker than expectations of -0.2% m/m and the biggest decline in 5 months.

Japan Aug national CPI fell -0.5% y/y right on expectations. Aug national CPI ex-fresh food fell -0.5% y/y, weaker than expectations of -0.4% y/y. Aug national CPI ex food & energy rose +0.2% y/y, right on expectations.

Key U.S. news today includes: (1) Aug personal spending (expected +0.1%, Jul +0.3%) and Aug personal income (expected +0.2%, Jul +0.4%), (2) Aug PCE deflator (expected +0.2% m/m and +0.9% y/y, Jul unch m/m and +0.8% y/y) and Aug core PCE deflator (expected +0.2% m/m and +1.7% y/y, Jul +0.1% m/m and +1.6% y/y), (3) Sep Chicago PMI (expected +0.5 to 52.0, Aug -4.3 to 51.5), (4) final-Sep University of Michigan U.S. consumer sentiment index (expected +0.2 to 90.0, prelim-Sep unch at 89.8), (5) USDA Q3 quarterly grain stocks, (6) USDA Q3 Hogs & Pigs inventory.

Russell 1000 companies that report earnings today: none.

U.S. IPO’s scheduled to price today: Independence Realty Trust (IRT), Nutanix (NTNX).

Equity conferences today: none.

Amazon.com (AMZN +0.04%) was rated a new ‘Buy’ at Guggenheim with a price target of $ 950.

Cognizant Technology Solutions (CTSH +0.20%) was rated a new ‘Buy’ at HSBC wuth a target price of $ 62.

Qualcomm (QCOM +6.30%) was upgraded to ‘Buy’ from ‘Neutral’ at Mizuho with a price target of $ 75.

Nordstrom (JWN -0.58%) was initiated with a ‘Buy’ at Guggenheim with a 12-month price target of $ 60.

Casy’s General Stores (CASY -0.91%) was upgraded to ‘Buy’ from ‘Hold’ at Jeffries with a 12-month target price of $ 134.

Under Armour (UA -1.98%) was initiated with a ‘Buy’ at Guggenheim with a 12-month target price of $ 50.

Wal-Mart (WMT -1.48%) rose almost 1% in after-hours trading after Keybanc initiated it with an ‘Overweight’ and a price target of $ 90.

Nike (NKE -2.05%) was rated a new ‘Buy’ at Guggenheim with a price target of $ 70.

Costco Wholesale (COST -1.29%) gained nearly 2% in after-hours trading after it reported Q4 EPS of $ 1.77, higher than consensus of $ 1.73.

Mentor Graphics (MENT -0.24%) climbed 6% in after-hours trading after holder Elliot reported that it doubled its stake in MENT to 8.1% from 4.01% back on June 30.

CalAmp (CAMP -0.55%) tumbled over 12% in after-hours trading after it said it sees Q3 adjusted EPS between 24 cents and 30 cents, below consensus of 31 cents.

Ship Finance International Ltd. (SFL -0.41%) lost nearly 2% in after-hours trading after it offered $ 200 million in convertible notes.

Cempra (CEMP -8.92%) rose 4% in after-hours trading after interim results showed anti-NASH effects in a Phase 2 study of 6 nonalcoholic steatohepatitis (NASH) patients dosed with solithromycin.

Arbutus Biopharma (ABUS +2.37%) surged 25% in after-hours trading after it said it saw a reduction in serum HBsAG levels in a Phase 2 study in patients taking its ARB-1467 for chronic hepatitis B infection.

Dec E-mini S&Ps (ESZ16 -0.09%) this morning are down -0.75 of a point (-0.03%). Thursday’s closes: S&P 500 -0.93%, Dow Jones -1.07%, Nasdaq -0.76%. The S&P 500 on Thursday closed lower on concern the Fed is closer to raising interest rates after Philadelphia Fed President Harker said he’s “somewhat concerned” about falling behind the curve and would prefer to raise interest rates sooner rather than later. There was also weakness in bank stocks led by the fall in Wells Fargo to a 2-1/2 year low and the slide in Deutsche Bank AG to near a record low on concern it may have to raise capital. Stocks found support on the +3,000 increase in U.S. weekly initial unemployment claims (less than expectations of +8,000) and on strength in energy producer stocks after the price of crude climbed to a 1-month high.

Dec 10-year T-notes (ZNZ16 +0.04%) this morning are up +4 ticks at a 1-1/2 month high. Thursday’s closes: TYZ6 +3.50, FVZ6 +2.00. Dec 10-year T-notes on Thursday closed higher on the slump in stocks and on Fed Governor Powell’s comment that he favors a “gradual” increase in interest rates due to slow global growth and deflationary forces. However, T-notes were undercut by Philadelphia Fed President Harker’s comment that he would rather raise interest rates “sooner rather than later.”

The dollar index (DXY00 +0.29%) this morning is up +0.303 (+0.32%) at a 1-week high. EUR/USD (^EURUSD) is down -0.0053 (-0.47%) at a 1-week low. USD/JPY (^USDJPY) is up +0.13 (+0.13%). Thursday’s closes: Dollar index +0.104 (+0.11%), EUR/USD +0.0005 (+0.04%), USD/JPY +0.34 (+0.34%). The dollar index on Thursday closed higher on the smaller-than-expected increase in U.S. weekly jobless claims and the hawkish comments from Philadelphia Fed President Harker who said he would rather raise interest rates “sooner rather than later.”

Nov WTI crude oil (CLX16 -0.33%) this morning is down -53 cents (-1.11%) and Nov gasoline (RBX16 -0.79%) is down -0.0177 (-1.23%). Thursday’s closes: Nov crude +0.78 (+1.66%), Nov gasoline +0.0040 (+0.28%). Nov crude oil and gasoline on Thursday closed higher with Nov crude at a 1-month high on carryover support from Wednesday’s OPEC agreement to cut its oil production to 32.5 million bpd and on carryover support from Wednesday’s EIA news that U.S. crude inventories unexpectedly fell -1.88 million bbl to a 7-1/2 month low.