Live Index – Tue, 02 Sep 2014 Premarket

September E-mini S&Ps (ESU14 +0.07%) this morning are up +0.17% at a record high and European stocks are up +0.65% ahead of U.S. economic data later today that are expected to show manufacturing activity continued to expand last month. European stocks gained even after Eurozone manufacturing activity last month was revised lower to its slowest pace of growth in 13 months on speculation the ECB will expand stimulus measures when it meets on Thursday. Geopolitical concerns also limited gains in European stocks after Ukraine warned of an escalating conflict in its easternmost regions, even as U.S. President Obama headed to Eastern Europe to reassure NATO members. Asian stocks closed mixed: Japan +1.24%, Hong Kong -0.01%, China +1.32%, Taiwan -1.19%, Australia +0.51%, Singapore +0.43%, South Korea -1.00%, India +0.57%. China’s Shanghai Stock Index climbed to an 11-1/2 month high after weaker-than-expected Chinese manufacturing data bolstered speculation the government will add to stimulus to boost growth. Commodity prices are mostly lower as the dollar gains. Oct crude oil (CLV14 -0.90%) is down -0.77%. Oct gasoline (RBV14 -1.43%) is down -1.29%. Dec gold (GCZ14 -1.15%) is down -1.20% at a 2-1/2 month low. Dec copper (HGZ14 -0.22%) is down -0.30% at a 1-1/2 week low. Agriculture prices are mostly higher. The dollar index (DXY00 +0.27%) is up +0.27% at a fresh 13-1/2 month high on speculation that improvement in the U.S. economy will boost the case for the Fed to raise interest rates. EUR/USD (^EURUSD) is down -0.10% at an 11-3/4 month low with European money markets pricing in about a 50% chance the ECB cuts interest rates by 10 bp on Thursday. USD/JPY (^USDJPY) is up +0.56% at a 7-1/2 month high on speculation that Japan’s Government Pension Investment Fund, the world’s largest pool of retirement savings, will announce new allocations this fall that reduce holdings of Japanese assets in favor of foreign holdings. Dec T-note prices (ZNZ14 -0.22%) are down -9.5 ticks.

The Eurozone Aug Markit manufacturing PMI was revised lower to 50.7 from the originally reported 50.8, the slowest pace of expansion in 13 months.

Eurozone Jul PPI fell -0.1% m/m, right on expectations but the sixth month out of the last seven that producer prices have fallen. On an annual basis, July PPI fell -1.1% y/y, right on expectations.

The German Aug Markit/BME manufacturing PMI was revised lower to 51.4 from the originally reported 52.0, the slowest pace of expansion in 11 months.

The UK Aug Markit/CIPS construction PMI unexpectedly rose +1.6 to 64.0, better than expectations of -0.9 to 61.5 and the fastest pace of expansion in 7 months.

The China Aug manufacturing PI fell -0.6 to 51.1, a larger decline than expectations of -0.5 to 51.2.

Japan Q2 capital spending rose +2.0% y/y, less than expectations of +4.1% y/y. Q2 capital spending ex-software rose +1.9% y/y, more than expectations of +1.0% y/y.

The market is expecting today’s August ISM manufacturing index to show a -0.1 point decline to 57.0, reversing a little of July’s solid +1.8 point increase to 57.1. None of the Russell 1000 companies report earnings today.

Equity conferences this week include: Citi Global Technology Conference on Tue-Thu, Barclays CEO Energy-Power Conference on Tue-Thu, Cowen Global Transportation & Aerospace Defense Conference on Wed, Barrington Research Fall Investment Conference on Wed, Brean Capital Global Tech Conference on Wed, FBR Inaugural Healthcare Conference on Wed, Goldman Sachs Global Retailing Conference on Wed, Drexel Hamilton Telecom, Media, and Technology Conference on Wed-Thu, KBW Insurance Conference on Wed-Thu, Robert W. Baird & Co Health Care Conference on Wed-Thu, Barclays Back to School Conference on Wed-Fri, Vertical Research Partners Industrial Conference on Wed-Fri, Mizuho Investment Conference on Thu, Bloomberg Sports Business Summit on Thu, Citi Biotech Conference on Thu, Nomura Digital Media Conference on Thu, Renewable Energy India Expo 2014 on Thu, and Scotia Capital, Inc Financial Summit on Thu.

Northrop Grumman (NOC +0.27%) was upgraded to ‘Outperform’ from ‘Sector Perform’ at RBC Capital.

Tesla (TSLA +2.21%) and Cabot Oil & Gas (COG +0.51%) were both upgraded to ‘Buy’ from ‘Hold’ at Stifel.

CNBC reports that Dollar General (DG -0.33%) will raise its offer for Family Dollar (FDO unch) to $ 80 a share or $ 9.1 billion.

AutoZone (AZO +0.01%) was downgraded to ‘Neutral’ from ‘Overweight’ at JPMorgan Chase.

Flowserve (FLS -0.13%) was initiated with an ‘Overweight’ at Barclays with a price target of $ 85.

Finisar (FNSR +1.80%) was downgraded to ‘Hold’ from ‘Buy’ at Jefferies.

Progressive (PGR +0.44%) was upgraded to ‘Buy’ from ‘Neutral’ at Goldman Sachs.

Boeing (BA -0.24%) was awarded a $ 234.7 milion contract for the production and delivery of 24 AH-6I aircraft to Saudi Arabia.

Amphenol (APH -0.37%) jumped 10% in after-hours trading after it acquired Casco Automotive Group for $ 450 million.

David Voyticky reported a 5.2% passive stake in Miller Energy (MILL +2.78%) .

RA Capital reported a 9.9% passive stake in Wafergen Biosystems (WGBS -1.10%) .

Larry Feinberg reported a 6.4% passive stake in Metabolix (MBLX +1.47%) .

Sep E-mini S&Ps (ESU14 +0.07%) this morning are up +3.50 points (+-.17%) at a fresh record high. The S&P 500 Index on Friday closed higher: S&P 500 +0.33%, Dow Jones +0.11%, Nasdaq +0.40%. Bullish factors included (1) the +11.7 point increase in the Chicago Aug PMI, stronger than expectations of +3.9 to 56.5, and (2) the +3.3 point increase in the final-Aug U.S. consumer confidence index (Univ of Michigan), better than expectations of +0.8 to 80.0. Negative factors included (1) the unexpected -0.1% decline in U.S. Jul personal spending, weaker than expectations of +0.2% and the first decline in 6 months, and (2) the ongoing Ukraine crisis after NATO said that more than 1,000 Russian troops are operating inside Ukraine, manning sophisticated weaponry and advising local separatists.

Dec 10-year T-notes (ZNZ14 -0.22%) this morning are down -9.5 ticks. Dec 10-year T-note futures prices on Friday settled little changed. Bullish factors included (1) the unexpected -0.1% drop in U.S. Jul personal spending, the first decline in 6 months, and (2) weekend short-covering ahead of the long holiday weekend on concern the violence in Ukraine may become worse. Bearish factors included (1) stronger-than-expected U.S. economic data with the Aug Chicago PMI and Aug U.S. consumer confidence reports, and (2) strength in stocks. Closes: TYZ4 -2.00, FVZ4 +1.00.

The dollar index (DXY00 +0.27%) this morning is up 0.220 (+0.27%) at a 13-1/2 month high. EUR/USD (^EURUSD) is down -0.0013 (-0.10%) at an 11-3/4 month low and USD/JPY (^USDJPY) is up +0.58 (+0.56%) at a 7-1/2 month high. The dollar index on Friday closed higher. Bullish factors included (1) stronger-than-expected U.S. economic data on Aug Chicago PMI and Aug University of Michigan consumer confidence, and (2) weakness in EUR/USD, which fell to an 11-3/4 month low on speculation the ECB may resort to quantitative easing as soon as this Thursday’s ECB meeting after German Jul retail sales unexpectedly fell by the most in 2-1/2 years. Closes: Dollar index +0.271 (+0.33%), EUR/USD -0.0049 (-0.37%), USD/JPY +0.291 (+0.28%).

Oct WTI crude oil (CLV14 -0.90%) this morning is down -74 cents (-0.77%) and Oct gasoline (RBV14 -1.43%) is down -0.0338 (-1.29%). Oct crude and gasoline prices on Friday posted 2-week highs and closed higher: CLV4 +1.41 (+1.49%), RBV4 +0.0321 (+1.24%). Supportive factors included (1) the stronger-than-expected Aug Chicago PMI, which signals improved fuel demand and consumption, and (2) the larger-than-expected increase in the Aug U.S. consumer confidence index.