US : Pre Market News – 13 Oct 2016

Dec E-mini S&Ps (ESZ16 -0.55%) are down -0.54% at a 4-week low and European stocks are down -1.19% at a 1-1/2 week low as a plunge in Chinese exports revived concerns about the global economy. Stock prices retreated around the world after China Sep exports fell by the most in 7 months and as China Sep imports unexpectedly declined. That undercut the price of crude oil and copper, which led to losses in energy producers and mining stocks. Also, the markets are pricing in the likelihood of a Fed rate hike in December after Wednesday’s minutes of the Sep 20-21 FOMC meeting stated that several Fed members said “it would be appropriate to increase the target range for the federal funds rate relatively soon.” Asian stocks settled mostly lower: Japan -0.39%, Hong Kong -1.61%, China +0.09%, Taiwan -0.36%, Australia -0.71%, Singapore -0.29%, South Korea -0.89%, India -1.56%. China’s Shanghai Composite bucked the trend and closed higher on speculation the government may need to boost stimulus measures to revive economic growth. The Chinese yuan weakened to a 6-year low against the dollar as the weak Chinese trade data may prompt the PBOC to let the yuan weaken further.

The dollar index (DXY00 -0.16%) is down -0.16% as it retreated from a 7-month high in overnight trade on speculation that weakness in the global economy may prompt the Fed to delay a rate hike. EUR/USD (^EURUSD) is up +0.22%. USD/JPY (^USDJPY) is down -0.47%.

Dec 10-year T-note prices (ZNZ16 +0.22%) are up +8 ticks.

China Sep exports fell -10.0% y/y, weaker than expectations of -3.3% y/y and the biggest decline in 7 months. Sep imports fell -1.9% y/y, weaker than expectations of +0.6% y/y.

Key U.S. news today includes: (1) weekly initial unemployment claims (expected +4,000 to 253,000, previous -5,000 to 249,000) and continuing claims (expected -8,000 to 2.050 million, previous -6,000 to 2.058 million), (2) Sep import price index (expected +0.2% m/m and -1.0% y/y, Aug -0.2% m/m and -2.2% y/y), (3) Philadelphia Fed President Patrick Harker (non-voter) speaks on the economic outlook and will address the World Affairs Council of Philadelphia, (4) the Treasury’s auction of $ 12 billion of 30-year T-bonds, (5) Minneapolis Fed President Neel Kashkari (non-voter) speaks at a town hall forum in Missoula, MT on ending too big to fail, the role of the Federal Reserve and other topics, and (6) EIA Weekly Petroleum Status Report.

Russell 1000 companies that report earnings today: Progressive Corp (consensus $ 0.33), Delta Air Lines (1.65), First Republic Bank (0.99), PacWest Bancorp (0.71), Wynn Resorts (0.75).

U.S. IPO’s scheduled to price today: Mammoth Energy Services (TUSK).

Equity conferences during the remainder of this week include: none.

Waste Management (WM +0.62%) was downgraded to ‘Neutral’ from ‘Outperform’ at Wedbush who cut their price target on the stock to $ 68 from $ 73.

Penske Automotive Group (PAG +0.30%) was downgraded to ‘Sell’ from ‘Hold’ at Evercore ISI.

TD Ameritrade Holding (AMTD -0.03%) was upgraded to a ‘Buy’ from ‘Neutral’ at Bank of America/Merrill Lynch who raised their price target on the stock to $ 43 from $ 33.

Charles Schwab (SCHW -0.53%) was upgraded to a ‘Buy’ from ‘Neutral’ at Bank of America/Merrill Lynch who raised their price target on the stock to $ 3 from $ 32.

Suburban Propane Partners LP (SPH +0.76%) was upgraded to ‘Buy’ from ‘Hold’ at Stifel with a 12-month target price of $ 36.

Five Below (FIVE -0.28%) was rated new ‘Overweight’ at Keybanc Capital Markets with a 12-month target price of $ 47.

MercadoLibre (MELI -0.68%) dropped 6% in after-hours trading after it commenced an underwritten public offering of up to 5.5 million shares of common stock from holder eBay.

Wells Fargo (WFC -0.29%) gained nearly 2% in after-hours trading after CEO Stumpf stepped down in the wake of the fake accounts scandal at the bank.

CSX Corp. (CSX -0.85%) rose nearly 3% in after-hours trading after it reported Q3 revenue of $ 2.71 billion, above consensus of $ 2.69 billion.

eBay (EBAY +0.13%) climbed over 2% in after-hours trading after it offered 5.5 million shares of MercadoLibre that it owns.

Dollar Tree (DLTR +0.30%) was rated a new ‘Overweight’ at Keybanc Capital Markets with a 12-month target price of $ 90.

Fluidigm Corp. (FLDM -3.95%) slumped over 15% in after-hours trading after it reported preliminary Q3 revenue of $ 22.2 million, below consensus of $ 29.3 million, and said it will suspend full year 2016 guidance.

Embraer SA (ERJ -1.72%) gained almost 2% in after-hours trading after Goldman Sachs upgraded the stock to ‘Buy’ from ‘Neutral on “compelling” risk/reward.

TG Therapeutucs (TGTX -7.20%) plunged over 20% in after-hours trading after setting a conference call for Thursday morning to provide an update on the GENUINE Phase 3 Trial.

Dec E-mini S&Ps (ESZ16 -0.55%) this morning are down -11.50 points (-0.54%) at a 4-week low. Wednesday’s closes: S&P 500 +0.11%, Dow Jones +0.09%, Nasdaq -0.05%. The S&P 500 on Wednesday closed higher on the Sep 20-21 FOMC meeting minutes, which suggested that the majority of Fed members were in no hurry to raise interest rates. Stocks were also supported by New York Fed President Dudley’s (voter) dovish comment that U.S. inflation expectations are “well anchored” and that the Fed can take its time in raising interest rates. Stocks were undercut by news that U.S. Aug JOLTS job openings fell -388,000 to an 8-month low of 5.443 million, weaker than expectations of -71,000.

Dec 10-year T-notes (ZNZ16 +0.22%) this morning are up +8 ticks. Wednesday’s closes: TYZ6 -2.50, FVZ6 -1.25. Dec 10-year T-notes on Wednesday slumped to a 4-1/4 month low and closed lower on the likelihood that the Fed will raise interest rates this year after several Fed policy makers said an interest rate increase was needed “relatively soon.” T-notes were also undercut by supply pressures as the Treasury auctioned $ 44 billion of 3-year and 10-year T-notes Wednesday.

The dollar index (DXY00 -0.16%) this morning is down -0.156 (-0.16%). EUR/USD (^EURUSD) is up +0.0024 (+0.22%). USD/JPY (^USDJPY) is down -0.49 (-0.47%). Wednesday’s closes: Dollar index +0.276 (+0.28%), EUR/USD -0.0047 (-0.43%), USD/JPY +0.70 (+0.68%). The dollar index on Wednesday rose to a 7-month high and closed higher on the Sep 20-21 FOMC meeting minutes, which said that several FOMC members saw a Fed rate hike “relatively soon.” EUR/USD fell to a 2-1/2 month low and USD/JPY climbed to a 5-week high on the likelihood of a Fed rate hike in December.

Nov WTI crude oil (CLX16 -0.08%) this morning is unch and Nov gasoline (RBX16 -0.06%) is up +0.0001 (+0.01%). Wednesday’s closes: Nov crude -0.61 (-1.20%), Nov gasoline -0.0225 (-1.52%). Nov crude oil and gasoline on Wednesday closed lower on the rally in the dollar index to a 7-month high and on OPEC Secretary-General Barkindo’s comment that it hasn’t been decided whether OPEC would cut oil output before non-OPEC oil nations do. Crude oil was also undercut by expectations that Thursday’s weekly EIA data will show U.S. crude inventories rose by +1.75 million bbl.