US : Pre Market News – 03 Oct 2016

Dec E-mini S&Ps (ESZ16 -0.02%) are little changed, down -0.02% and European stocks are up +0.01% in quiet trade. Markets in China, Germany and South Korea are all closed today for holiday. Stocks received support from strength in crude oil (CLX16 +0.58%) which is up +0.87% at a 1-1/4 month high and is lifting energy producing stocks. Signs of increased M&A activity also boosted equity prices with Twitter up over 4% in pre-market trading after a news report said that Google is working with financial adviser Lazard Ltd. to consider a potential bid for the company. Gains in U.S. stocks were limited after Fitch Ratings cut its U.S. 2016 GDP forecast to 1.4% from a 1.8% estimate in Jul. Asian stocks settled higher: Japan +0.90%, Hong Kong +1.23%, Taiwan +0.73%, Australia +0.78%, Singapore +0.05%, India +1.35%. Asian stocks rose as European banking concerns eased and along with signs of strength in Japanese manufacturing activity after the Japan Sep Nikkei manufacturing PMI was revised upward to an 8-month high.

The dollar index (DXY00 +0.06%) is up +0.03. EUR/USD (^EURUSD) is unch. USD/JPY (^USDJPY) is unch. GBP/USD is down -0.75% at a 2-3/4 month low on economic concerns in Britain after Prime Minister May pledged to start pulling the UK out of the European Union by March.

Dec 10-year T-note prices (ZNZ16 -0.04%) are down -2 ticks.

In its bi-monthly Global Economic Outlook, Fitch Ratings’ cut its U.S. 2016 GDP estimate to 1.4% from a 1.8% estimate in Jul due to oil sector adjustments, weak external demand and as dollar appreciation takes its toll on industrial demand.

China Sep manufacturing PMI was unchanged at 50.4, weaker than expectations of +0.1 to 50.5.

Japan Sep Nikkei manufacturing PMI was revised upward to 50.4 from 50.3, the fastest pace of expansion in 8 months.

Key U.S. news today includes: (1) final-Sep Markit manufacturing PMI (expected unch at 51.4, prelim-Sep -0.6 to 51.4), (2) Aug construction spending (expected +0.3% m/m, Jul unch m/m), (3) Sep ISM manufacturing index (expected +0.9 to 50.3, Aug -3.2 to 49.4), (4) Sep total vehicle sales (expected 17.4 million, Aug 16.91 million), (5) USDA weekly grain export inspections, (6) USDA Weekly Crop Progress.

Russell 1000 companies that report earnings today: none.

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

Equity conferences this week include: Capital Link Shipping, Marine Services & Offshore Forum on Wed, ACI European Biomass to Power Conference on Wed, Seaport Global Securities Dallas Energy Day on Thu.

Teradata (TDC +2.96%) was downgraded to ‘Sell’ from ‘Hold at UBS.

Barrick Gold (ABX -1.23%) was upgraded to ‘Buy’ from ‘Hold’ at Deutsche Bank.

Carnival Cruise Lines (CCL +1.16%) was rated a new ‘Buy’ at HSBC with a price target of $ 60.

National Oilwell Varco (NOV -0.33%) was downgraded to ‘Sell’ from “hold’ at Citigroup.

FirstCash (FCFS +1.82%) was upgraded to ‘Buy’ from ‘Neutral’ at Janney Montgomery with a 12-month target price of $ 59.

VirnetX Holding Corp. (VHC -3.47%) jumped over 20% in pre-market trading after Apple was told to pay $ 302.4 million to VHC after a federal jury said Apple was guilty of infinging on VHC’s patents.

Halliburton (HAL +1.58%) was upgraded to ‘Buy’ from ‘Hold’ at Societe Generale with a 12-month target price of $ 55.

Twitter (TWTR +0.17%) is up over 4% in pre-market trading after a person familiar with the matter said Alphabet (GOOG +0.29%) is said to be working with Lazard to review a potential bid for the company .

Levin Capital said it increased its stake in Fluidigm (FLDM -4.76%) to 19.6% from 12.38%

Dave & Buster’s Entertainment (PLAY +3.54%) rose nearly 4% in after-hours trading after it was announced that it will replace Piedmont Natural Gas in the S&P SmallCap 600 after the close of trading Monday, October 3.

Express Scripts (ESRX +0.99%) said it will add Walgreens to its Tricare pharmacy network and drop CVS, as of December 1.

Seaword (SEAS -0.44%) gained 1% in after-hours trading after Ivory Cove reported a 5.2% stake in the company, the fourth largest.

The board of Viacom (VIAB +0.87%) has formed a special committee to evaluate a possible combination with CBS.

Illinois Treasurer Frerichs said late Friday that Illinois will suspend investment activity with Wells Fargo (WFC -0.20%) .

Dec E-mini S&Ps (ESZ16 -0.02%) this morning are down -0.50 of a point (-0.02%). Friday’s closes: S&P 500 +0.80%, Dow Jones +0.91%, Nasdaq +0.77%. The S&P 500 on Friday closed higher on reduced concern about Deutsche Bank after it rebounded sharply higher from a record low after a media report saying that the U.S. Department of Justice is seeking only $ 5.4 billion to settle its investigation of Deutsche Bank’s involvement in mortgage-backed securities, far less than earlier reports of a $ 14 billion settlement. Stocks were also boosted by the +2.7 point increase in the Sep Chicago PMI (stronger than expectations of +0.5 to 52.0) and the +1.4 point gain in the final-Sep University of Michigan U.S. consumer sentiment index to 91.2 (stronger than expectations of +0.2 to 90.0).

Dec 10-year T-notes (ZNZ16 -0.04%) this morning are down -2 ticks. Friday’s closes: TYZ6 -13.50, FVZ6 -6.75. Dec 10-year T-notes on Friday retreated from a 1-1/2 month high and closed lower on reduced safe-haven demand with the rally in stocks and with relief about the report that Deutsche Bank may not have to pay as large of a fine to the DOJ as earlier reported. T-notes were also undercut by the stronger-than-expected U.S. consumer sentiment index and Chicago PMI report.

The dollar index (DXY00 +0.06%) this morning is up +0.027 (+0.03%). EUR/USD (^EURUSD) is unch. USD/JPY (^USDJPY) is unch. Friday’s closes: Dollar index -0.072 (-0.08%), EUR/USD +0.0013 (+0.12%), USD/JPY +0.32 (+0.32%). The dollar index on Friday fell back from a 1-week high and closed lower on a upward rebound in EUR/USD on reduced European banking concerns after Deutsche Bank CEO Cryan said that Deutsche Bank’s balance sheet is safer than at any point in the past two decades. The dollar was also undercut by the weaker-than-expected U.S. Aug personal spending report of unchanged (vs expectations of +0.1%).

Nov WTI crude oil (CLX16 +0.58%) this morning is up +42 cents (+0.87%) at a 1-1/4 month high and Nov gasoline (RBX16 -0.47%) is down -0.0026 (-0.18%). Friday’s closes: Nov crude +0.41 (+0.86%), Nov gasoline +0.0210 (+1.46%). Nov crude oil and gasoline on Friday closed higher on a weaker dollar and hopes that the global oil glut may shrink faster than expected if OPEC follows through on last Wednesday’s agreement to cut its oil production to 32.5-33.0 million bpd.