US : Pre Market News – 07 Oct 2016

Dec E-mini S&Ps (ESZ16 -0.23%) are down -0.34% and European stocks are down -0.52% on speculation that today’s U.S. Sep non-farm payrolls report will be strong enough to allow the Fed to raise interest rates this year. The dollar index strengthened to a 2-1/4 month high on Fed rate hike speculation and GBP/USD plummeted to a 31-1/3 year low amid growing concern of a so-called hard Brexit. The German 10-year bund yield climbed above 0% to a 3-week high and the yield on the U.S. 10-year also rose to a 3-week high on the likelihood of tighter Fed monetary policy. Asian stocks settled lower: Japan -0.23%, Hong Kong -0.42%, China closed for holiday, Taiwan -0.20%, Australia -0.29%, Singapore -0.35%, South Korea -0.41%, India -0.16%.

The dollar index (DXY00 +0.20%) is up +0.20% at a 2-1/4 month high. EUR/USD (^EURUSD) is down -0.12% at a 1-3/4 month low after ECB Governing Council member Vasiliauskas said that the ECB’s governing council has not discussed bond buying tapering. USD/JPY (^USDJPY) is down -0.25%. GBP/USD is down -2.04% at a 31-1/3 year low.

Dec 10-year T-note prices (ZNZ16 -0.04%) are down -1 tick at a 3-week low.

ECB Governing Council member Vasiliauskas said that the ECB’s governing council has not discussed bond buying tapering.

German Aug industrial production rose +2.5% m/m and +1.9% y/y, stronger than expectations of +1.0% m/m and +0.4% y/y and the biggest increase in 7 months.

Key U.S. news today includes: (1) Sep non-farm payrolls (expected +17,000, Aug +151,000) and Sep unemployment rate (expected unch at 4.9%, Aug unch at 4.9%), (2) Aug wholesale inventories (expected -0.1%, Jul unch), (3) Fed Vice Chair Stanley Fischer speaks at the Institute of International Finance annual meeting, (4) Cleveland Fed President Loretta Mester (voter) speaks before the Shadow Open Market Committee, (5) Aug consumer credit (expected +$ 16.5 billion, Jul +$ 17.713 billion), (6) Kansas City Fed President Esther George (voter) speaks on the U.S. economic outlook at the Institute of International Finance annual meeting, and (7) Fed Governor Lael Brainard takes part in a panel discussion at the IMF on trade as an engine for growth.

Russell 1000 companies that report earnings today: none.

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

Equity conferences today: none.

Carnival (CCL +0.12%) is down nearly 2% in pre-market trading after Hurricane Matthew forced cruise line operators to alter their routes because of the storm.

Zillow Group (ZG -2.73%) was rated a new ‘Buy’ at Needham & Co. with a 12-month target price of $ 40.

Tyson Foods (TSN +0.83%) was downgraded to ‘Sell’ from ‘Buy’ at Pivotal with a price target of $ 40.

Honeywell International (HON +0.30%) sold-off 5% in after-hours trading after it reported Q3 sales of $ 9.8 billion, missing guidance of $ 10 billion-$ 10.2 billion.

The Gap (GPS +1.11%) jumped 6% in after-hours trading after it reported September comparable sales down -3%, a smaller decline than expectations of -3.6%.

Citizens Financial Group (CFG +0.47%) was rated new ‘Outperform’ at Wedbush with a 12-month target price of $ 29.

Helen of Troy Ltd (HELE +0.43%) lost nearly 3% in after-hours trading after it lowered guidance on fiscal 2017 revenue to $ 1.55 billion-$ 1.59 billion from a July 7 estimate of $ 1.57 billion-$ 1.62 billion.

CIT Group (CIT +0.39%) rose nearly 6% in after-hours trading after it said it will sell its commercial air craft leasing business for $ 10 billion to Avalon Holdings.

Mistras Group (MG +0.34%) dropped 6% in after-hours trading after it lowered guidance on fiscal 2017 revenue to $ 690 million-$ 705 million from a prior view of $ 720 million-$ 735 million.

Regions Financial (RF +0.10%) was rated a new ‘Outperform’ at Wedbush with a 12-month target price of $ 12.

AxoGen (AXGN -2.49%) slid over 2% in after-hours trading after it proposed an offering of stock, although no amount was given.

Dynavax Technologies (DVAX -3.67%) climbed over 4% in after-hours trading after Point72 boosted its stake in the company to 5.9% from 1.2% in June.

Ruby Tuesday (RT +1.62%) dropped 5% in after-hours trading after it said it was discontinuing guidance to “focus on long-term strategic objectives.”

Dec E-mini S&Ps (ESZ16 -0.23%) this morning are down -7.25 points (-0.34%). Thursday’s closes: S&P 500 +0.05%, Dow Jones -0.07%, Nasdaq -0.08%. The S&P 500 on Thursday closed little changed. Stocks were undercut by weakness in mining stocks and raw-material producers after the price of gold sank to a 4-month low and the price of copper dropped to a 3-week low. There was also weakness in consumer-related stocks led by a -3% drop in Wal-Mart to a 4-1/2 month low after it issued a downbeat earnings outlook for fiscal 2018. Stocks found support on the unexpected -5,000 decline in U.S. weekly initial unemployment claims to 249,000, better than expectations for an increase of +2,000 to 256,000 and the fewest in 5-1/2 months. In addition, energy producer stocks rallied after crude oil rose to a 4-month high.

Dec 10-year T-notes (ZNZ16 -0.04%) this morning are down -1 tick at a fresh 3-week low. Thursday’s closes: TYZ6 -8.50, FVZ6 -5.25. Dec 10-year T-notes on Thursday tumbled to a 3-week low and closed lower on hawkish comments from Richmond Fed President Lacker who said “every FOMC meeting is a live meeting” to raise interest rates. There were also increased inflation expectations after the 10-year T-note breakeven inflation rate rose to a 4-1/2 month high thanks in part to the rally in oil prices.

The dollar index (DXY00 +0.20%) this morning is up +0.195 (+0.20%) at a 2-1/4 month high. EUR/USD (^EURUSD) is down -0.0013 (-0.12%) at a 1-3/4 month low. USD/JPY (^USDJPY) is down -0.26 (-0.25%). Thursday’s closes: Dollar index +0.640 (+0.67%), EUR/USD -0.0054 (-0.48%), USD/JPY +0.45 (+0.43%). The dollar index on Thursday rallied to a 2-1/4 month high and settled higher on the unexpected drop in weekly U.S. jobless claims to a 5-1/2 month low and on the hawkish comments by Richmond Fed President Lacker. The dollar was also boosted by weakness in the yen as USD/JPY jumped to a 1-month high on divergent central bank policies with the Fed expected to raise interest rates and the BOJ expected to expand stimulus.

Nov WTI crude oil (CLX16 +0.26%) this morning is down -20 cents (-0.40%) and Nov gasoline (RBX16 -0.30%) is down -0.123 (-0.82%). Thursday’s closes: Nov crude +0.73 (+1.46%), Nov gasoline +0.0083 (+0.56%). Nov crude oil and gasoline on Thursday closed higher with Nov crude at a 4-month high. Crude oil prices were boosted by carryover support from Wednesday’s unexpected drop in EIA U.S. crude inventories to an 8-month low. Crude oil was also boosted by a meeting scheduled for next week between OPEC and Russian Energy Minister Novak that will discuss ways non-OPEC members can participate in OPEC’s plan to reduce crude output. Crude oil prices were undercut by the rally in the dollar index to a 2-1/4 month high.