Morning Call: Better-than-expected corporate quarterly earnings results boosts U.S. stocks; Jun E-mini S&Ps up +0.21%; Euro Stoxx 50 down -0.34% on Eurozone deflation concerns.
Related Stocks
 ESM18 - S&P 500 E-Mini
SymLastChgPct
ESM182,776.85s-6.40-0.23%
DXY0094.408-0.109-0.12%
ZNM18119-310s-0-055-0.14%
GCM181,269.7+2.3+0.18%
SIN1816.400-0.059-0.36%
HGN183.0235-0.0035-0.12%
CLM1872.13s-0.11-0.15%
RBM182.1603s-0.0239-1.09%
NVDA250.95-6.16-2.40%
MPC72.62+0.14+0.19%
SPOT180.94+1.41+0.79%
DATA97.18-3.71-3.68%
KHC63.21+0.64+1.02%
SQ65.75-1.35-2.01%
CERN59.81-0.12-0.20%
AIG54.46+0.21+0.39%
MET45.71+0.05+0.11%
CRUS37.60-0.02-0.05%
HOLX40.46+0.89+2.25%
FEYE16.37-0.19-1.15%
BZH14.45+0.07+0.49%
CAR41.81+0.56+1.36%
CZR11.30-0.05-0.44%

Overnight Markets and News

Jun E-mini S&Ps (ESM18 +0.03%) this morning are up +0.21% on signs of strong corporate quarterly earnings results with Kraft Heinz and Tableau Software both up 5% in pre-market trading after they reported better-than-expected Q1 profits. European stocks are down -0.34% on deflation concerns after Eurozone Apr core CPI rose +0.7% y/y, the slowest pace of increase in more than year. The slow pace of inflation is dovish for ECB monetary policy and boosted European government bonds as the 10-year German bund yield fell to a 2-week low of 0.553%. Asian stocks settled mixed: Japan closed for holiday, Hong Kong -1.34%, China+0.64%, Taiwan -0.99%, Australia +0.79%, Singapore -1.10%, South Korea -0.61%, India -0.21%. The U.S. trade envoy arrived in Beijing to begin trade talks today with Chinese trade representatives as both sides dial back expectations for a breakthrough. A Chinese official said his country won't agree to preconditions for trade talks and American delegates said they might leave the talks early if no common ground is found.

The dollar index (DXY00 +0.02%) is down -0.01% after the Fed was less hawkish than expected in the FOMC post meeting statement. EUR/USD (^EURUSD +0.23%) is up +0.23. USD/JPY (^USDJPY -0.39%) is down -0.38%.

Jun 10-year T-note prices (ZNM18 +0-045) are up +5 ticks at a 1-1/2 week high on positive carry-over from a rally in German 10-year bund prices to a 2-week high.

Eurozone Mar PPI rose +0.1% m/m and +2.1% y/y, right on expectations.

The Eurozone Apr CPI estimate rose +1.2% y/y, weaker than expectations of +1.3% y/y. Apr core CPI rose +0.7% y/y, weaker than expectations of +0.9% y/y and the smallest pace of increase in 13-months.

The UK Apr Markit/CIPS services PMI rose +1.1 to 52.8, weaker than expectations of +1.8 to 53.5.

U.S. Stock Preview

Key U.S. news today includes: (1) Apr Challenger job cuts (Mar +39.4% y/y), (2) weekly initial unemployment claims (expected +16,000 to 225,000, previous -24,000 to 209,000) and continuing claims (expected -2,000 to 1.835 million, previous -29,000 to 1.837 million), (3) Q1 non-farm productivity (expected +0.9%, Q4 unch) and Q1 unit labor costs (expected +3.0%, Q4 +2.5%), (4) Mar trade balance (expected -$50.0 billion, Feb -$57.6 billion), (5) USDA weekly Export Sales, (6) final-Apr Markit U.S. services PMI (expected +0.1 to 54.5, prelim-Apr +0.4 to 54.4), (7) Apr ISM non-manufacturing PMI (expected -0.8 to 58.0, Mar -0.7 to 58.8), (8) Mar factory orders (expected +1.4%, Feb +1.2% and +0.1% ex transportation).

Notable S&P 500 earnings reports today include: Regeneron Pharmaceuticals (consensus $4.38), Cigna (3.39), Assurant (1.89), Skyworks Solutions (1.60), Cardinal Health (1.51), CBS (1.19), Dow DuPont (1.09), Kellogg (1.08), Motorola (0.87), Xerox (0.73), Church & Dwight (0.61).

U.S. IPO's scheduled to price today: Carbon Black (CBLK), Baycom (BCML), Spirit of Texas Bancshares STXB), Construction Partners (ROAD).

Equity conferences this week: none.

Market Comments

June S&P 500 E-minis (ESM18 +0.03%) this morning are up +5.50 points (+0.21%). Wednesday's closes: S&P 500 -0.72%, Dow Jones -0.72%, Nasdaq -0.56%. The S&P 500 on Wednesday closed lower on concern the Fed may let inflation run hot after they added a reference to the "symmetric" nature of their 2% inflation target in the FOMC post-meeting statement. There was also weakness in bank stocks after Amazon.com said it will offer discounts to retailers if they use Amazon's online payment service instead of other credit card payment systems, which may eat into bank profits.

June 10-year T-notes (ZNM18 +0-045) this morning are up +5 ticks at a 1-1/2 week high. Wednesday's closes: TYM8 +4.50, FVM8 +2.75. Jun 10-year T-notes on Wednesday closed higher on FOMC's post-meeting statement where the Fed acknowledged a slowdown in the economy by removing the phrase from the previous statement that said the "economic outlook has strengthened in recent months." T-notes were also supported by the FOMC's new reference to a "symmetrical" inflation target, which suggested that the FOMC will allow inflation to move above 2% without speeding up its rate-hike regime.

The dollar index (DXY00 +0.02%) this morning is down -0,009 (-0.01%). EUR/USD (^EURUSD +0.23%) is up +0.28 (+0.23%). USD/JPY (^USDJPY -0.39%) is down -0.42 (-0.38%). Wednesday's closes: Dollar Index +0.063 (+0.07%), EUR/USD -0.0042 (-0.35%), USD/JPY -0.02 (-0.02%). The dollar index on Wednesday rose to a 4-month high and closed slightly higher on the stronger-than-expected U.S. Apr ADP employment report, which was hawkish for Fed policy. However, the dollar was undercut by the FOMC's reference to a "symmetrical" inflation target, which was dovish for U.S. interest rate differentials.

Metals prices this morning are higher with Jun gold (GCM18 +0.52%) +6.5 (+0.50%), Jul silver (SIN18 +0.79%) +0.120 (+0.73%), and Jul copper (HGN18 +1.14%)+0.038 (+1.24%). Wednesday's closes: Jun gold -1.20 (-0.09%), Jul silver +0.248 (+1.54%), Jul copper +0.0310 (+1.02%). Metals on Wednesday settled mixed. Metals prices were boosted by increased safe-haven demand for precious metals on uncertainty about whether the U.S. will withdraw from the Iranian nuclear accord. Copper prices were boosted by signs of tighter copper supplies after LME copper inventories fell -1,300 MT to a 5-week low of 324,225 MT. Metals prices were undercut by the early rally in the dollar index to a 4-month high.

Jun WTI crude oil prices (CLM18 -0.09%) this morning are unchanged and Jun gasoline (RBM18 -0.41%) is -0.0045 (-0.22%). Wednesday's closes: Jun crude +0.68 (+1.01%), Jun gasoline -0.0078 (-0.37%). Jun crude oil and gasoline on Wednesday settled mixed with Jun gasoline at a 2-week low. Crude oil prices were undercut by the sharp +6.22 million bbl increase in EIA crude inventories (more than expectations of +1.0 million bbl) and the unexpected +1.17 million bbl increase in EIA gasoline stockpiles (more than expectations of a -500,000 bbl decline). Crude oil prices were supported by the -40,000 bpd decline in OPEC Apr crude production to a 1-year low of 31.93 million bpd.

Overnight U.S. Stock Movers

Nvidia (NVDA -0.37%) was upgraded to 'Overweight' from 'Equal-Weight' at Barclays with a price target of $280.

Marathon Petroleum (MPC +4.03%) was upgraded to 'Buy' from 'Hold' at Jeffries.

Spotify Technology SA (SPOT +3.11%) dropped almost 8% in after-hours trading after it forecast dull-year revenue of 4.9 billion euros, weaker than consensus of 5.3 billion euros.

Tableau Software (DATA +0.47%) rallied 5% in after-hours trading after it reported Q1 revenue of $246.2 million, well above consensus of $217.9 million.

Kraft Heinz (KHC -2.69%) rose nearly 5% in after-hours trading after it reported Q1 adjusted EPS of 89 cents, above consensus of 82 cents.

Square (SQ +0.95%) tumbled over 6% in after-hours trading after it forecast Q2 adjusted Ebitda of $60 million to $64 million, the midpoint below consensus of $63.5 million.

Cerner (CERN -1.48%) dropped almost 9% in after-hours trading after it forecast Q2 adjusted EPS of 59 cents to 61 cents, weaker than consensus of 65 cents.

American International Group (AIG -2.61%) slid more than 4% in after-hours trading after it reported Q1 adjusted EPS of $1.04, well below consensus of $1.25.

MetLife (MET -4.76%) gained more than 2% in after-hours trading after it reported Q1 adjusted EPS of $1.36, better than consensus of $1.17.

Cirrus Logic (CRUS +1.19%) dropped more than 6% in after-hours trading after it reported Q4 revenue of $303.2 million, weaker than consensus of $316.6 million, and forecast Q1 revenue of $210 million to $250 million, well below consensus of $294.1 million.

Hologic (HOLX +0.03%) fell nearly 5% in after-hours trading after it forecast full-year adjusted EPS of $2.22 to $2.27, the midpoint below consensus of $2.26.

FireEye (FEYE +0.92%) dropped almost 5% in after-hours trading after it forecast Q2 billings of $180 million to $195 million, the midpoint below consensus of $189 million.

Beazer Homes USA (BZH +1.25%) climbed more than 5% in after-hours trading after it reported Q2 revenue of $455.2 million, higher than consensus of $439.0 million.

Avis Budget Group (CAR +2.17%) lost 1% in after-hours trading after it forecast full-year adjusted EPS of $.290 to $3.75, the midpoint below consensus of $3.37.

Caesars Entertainment (CZR -1.71%) climbed 6% in after-hours trading after it reported Q1 net revenue of $1.97 billion and its board approved a buyback of up to $500 million in shares of its common stock.