US : Pre Market News – 17 Oct 2016

Dec E-mini S&Ps (ESZ16 -0.08%) are down -0.26% and European stocks are down -0.47% on speculation the Fed may allow inflation to run above target to spur economic growth after Fed Chair Yellen said Friday that there are “plausible ways” that running the economy hot for a while could repair some damage to growth caused by the recession. Her comments caused 10-year bond yields in England and Germany to shoot up to 3-3/4 month highs. Weakness in crude oil (CLX16 +0.24%) and copper prices (HGZ16 +0.40%) has also undercut energy and raw-material producing stocks with Nov WTI crude down -0.22% and Dec copper down -0.01% at a 1-month low. Asian stocks settled mixed: Japan +0.26%, Hong Kong -0.84%, China -0.74%, Taiwan +0.12%, Australia -0.83%, Singapore +0.07%, South Korea +0.43%, India -0.52%. The Chinese yuan fell to a fresh 6-year low of 6.7402 on speculation the PBOC will let the yuan weaken in an attempt to revive economic growth and bolster exports.

The dollar index (DXY00 -0.05%) is down -0.04%. EUR/USD (^EURUSD) is up +0.18%. USD/JPY (^USDJPY) is down -0.12%.

Dec 10-year T-note prices (ZNZ16 -0.02%) are down -0.5 of a tick.

Boston Fed President Rosengren (voter) argued that tightening monetary policy sooner would help the labor market closer to full employment for a longer period than if the Fed allows it to overshoot. “The risks have changed in terms of overshooting what I think is full employment with implications for potential imbalances. Those imbalances might result in a reaction by the Fed that we end up having to tighten more quickly than I would like.”

Key U.S. news today includes: (1) Oct Empire manufacturing index (expected +2.99 to 1.00, Sep +2.22 to -1.99), (2) Sep industrial production (expected +0.2%, Aug -0.4%) (3) USDA weekly grain export inspections, (4) USDA Weekly Crop Progress.

S&P 500 companies that report earnings today include: Bank of America (consensus $ 0.34), Schwab (0.33), IBM (3.23), JB Hunt (1.02), Hasbro (1.74) United Continental Holdings (3.06), Netflix (0.06).

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

Equity conferences during the remainder of this week include: 4th Annual Private Wealth Latin America and the Caribbean Forum on Tue

Dunkin’ Brands Group (DNKN +0.94%) was downgraded to ‘Sector Perform’ from ‘Outperform’ on valuation by RBC Capital Markets.

JPMorgan Chase (JPM -0.32%) was downgraded to ‘Hold’ from ‘Buy’ at Independent Research GmbH with a 12-month price target of $ 77.

Whirlpool (WHR -0.02%) was downgraded to ‘Neutral’ from ‘Buy’ at MKM Partners with a 12-month target price of $ 176.

Groupon (GRPN +2.24%) was upgraded to ‘Outperform’ from ‘Neutral’ at Wedbush.

Marathon Oil (MRO -1.35%) was downgraded to ‘Equal-weght’ from ‘Overweight’ at Barclays with a target price of $ 17.

Newmont Mining (NEM -1.67%) was upgraded to ‘Overweight’ from ‘Equal-weight’ at Barclays with a target price of $ 45.

Qualys (QLYS +0.53%) was upgraded to ‘Buy’ from ‘Neutral’ at DA Davidson with a 12-month target price of $ 47.

GameStop (GME -0.35%) said it expects to sell out of PlayStation Virtual Reality goggles and has asked Sony for more of the goggles.

Leven Capital boosted its stake in Fluidigm (FLDM -4.08%) to 25.2% from 19.6% and is the largest holder in the company.

Quotient Ltd. (QTNT +2.42%) jumped 5% in after-hours trading after it secured $ 120 million in debt financing in a private placement of 12% senior secured notes due 2023.

People with knowledge of the matter said CBS (CBS -0.24%) is close to hiring JPMorgan Chase and Goldman Sachs to advise it on a potential merger with Viacom (VIA -0.25%) .

Quality Systems (QSII +2.50%) climbed over 4% in after-hours trading after DealReporter said it had hired UBS earlier this year to look for potential buyers.

Dec E-mini S&Ps (ESZ16 -0.08%) this morning are down -5.50 points (-0.26%). Friday’s closes: S&P 500 +0.02%, Dow Jones +0.22%, Nasdaq +0.11%. The S&P 500 on Friday closed slightly higher on the strong U.S. Sep retail sales report of +0.6% and +0.5% ex-autos and on reduced Chinese economic concerns after China Sep PPI unexpectedly rose +0.1% y/y, the first increase in 4-1/2 years. Stocks were undercut by the unexpected -3.3 point decline in the Oct University of Michigan U.S. consumer sentiment index to a 13-month low of 87.9. In addition, the U.S. Sep PPI report of +0.3% m/m and +0.7% y/y was slightly stronger than market expectations and bolstered the case for a Fed rate hike.

Dec 10-year T-notes (ZNZ16 -0.02%) this morning are down -0.5 of a tick. Friday’s closes: TYZ6 -10.50, FVZ6 -3.50. Dec 10-year T-notes on Friday closed lower on the strong increase in U.S. Sep retail sales and on Fed Chair Yellen’s comments that the Fed should perhaps allow a “high-pressure” economy. T-notes found support on the decline in the Oct University of Michigan U.S. consumer sentiment index to a 13-month low.

The dollar index (DXY00 -0.05%) this morning is down -0.041 (-0.04%). EUR/USD (^EURUSD) is up +0.0020 (+0.18%). USD/JPY (^USDJPY) is down -0.13 (-0.12%). Friday’s closes: Dollar index +0.503 (+0.52%), EUR/USD -0.0084 (-0.76%), USD/JPY +0.47 (+0.45%). The dollar index on Friday closed higher on the strong increase in U.S. Sep retail sales, which bolstered the case for a Fed rate hike, and on Fed Chair Yellen’s comments about possibly allowing a “high pressure” economy.

Nov WTI crude oil (CLX16 +0.24%) this morning is down -11 cents (-0.22%) and Nov gasoline (RBX16 +0.63%) is up +0.0011 (+0.07%). Friday’s closes: Nov crude -0.09 (-0.18%), Nov gasoline +0.0186 (+1.27%). Nov crude oil and gasoline on Friday settled mixed. Crude oil prices were undercut by a stronger dollar and by negative carryover from Thursday’s increase in U.S. oil inventories by +4.85 million bbl, the first increase in six weeks. Crude oil prices were boosted by the recovery in the crack spread, which signals stronger refinery demand for crude to refine into gasoline and other petroleum products.