Monday, August 6, 2018

08/06/2018 - **Overnight Markets and News**

**Overnight Markets and News**

Sep E-mini S&Ps (ESU18 +0.05%) this morning are up +0.11% at a 1-week high and European stocks are up +0.56%.  Strength in energy producers is leading the overall market higher with Sep WTI crude oil (CLU18 +1.23%) up +1.47% after Saudi Arabia said it cut its crude production to 10.3 million bpd in Jul from 10.489 million bpd in Jun.  Gains in stocks were limited on trade concerns after National Security Adviser Bolton said the U.S. will take the trade war "far enough to get China to change" and China said it is prepared for a "protracted trade war" and doesn't fear sacrificing short-term economic interests.  Asian stocks settled mixed: Japan -0.08%, Hong Kong +0.52%, China -1.29%, Taiwan +0.11%, Australia +0.61%, Singapore +0.60%, South Korea -0.13%, India +0.36%.  China's Shanghai Composite tumbled to a 1-month low on concern the U.S. and China are headed for a protracted trade war.  The yuan recovered from Friday's 14-month low against the dollar after the PBOC Friday night said it was imposing a reserve requirement of 20% on trading of some foreign-exchange forward contracts, making it more expensive to short the yuan.  The PBOC stepped in to thwart the slide in the yuan on concern that continued weakening of the currency will lead to massive capital outflows out of China.

*The dollar index (DXY00 +0.39%) is up +0.31% at a 2-week high.  EUR/USD (^EURUSD -0.28%) is down -0.25% at a 1-1/4 month low after German Jun factory orders fell by the most in 17-months.  USD/JPY (^USDJPY +0.26%) is up +0.17%.  GBP/USD (^GBPUSD -0.55%) slumped -0.47% to an 11-month low after UK International Trade Secretary Fox said a "no-deal" Brexit is now more likely than not.

*Sep 10-year T-note prices (ZNU18 -0-020) are up +1.5 ticks.

The Eurozone Jul Sentix investor confidence rose +2.6 to 14.7, stronger than expectations of +1.3 to 13.4.

*ECB Governing Council member Nowotny said he supports a "faster" normalization of monetary policy, saying "a slow increase" in rates wouldn't harm the Eurozone economy.

*ECB Executive Board member Lautenschlaeger said it would be wrong to change course "abruptly" after very expansive monetary policy and "the art is to find a clear exit that doesn't interrupt growth."

*German Jun factory orders fell -4.0% m/m, weaker than expectations of -0.5% m/m and the biggest decline in 17-months.




**U.S. Stock Preview**

*Key U.S. news today includes: (1) USDA weekly grain export inspections, (2) USDA weekly Crop Progress.

*Notable S&P 500 earnings reports today include: Tyson Foods (consensus $1.42), Cardinal Health (0.93), Jacobs Engineering (1.20), Newell Brands (0.78), Henry Schein (1.02), Sempra Energy (1.19), Andeavor (3.01), ANSYS (1.05), Brighthouse Financial (2.05), Mosaic (0.38), Marriott Intl (1.37).

*U.S. IPO's scheduled to price today: none.

Equity conferences during the remainder of this week: Cantor Fitzgerald Innovation Summit on Mon, MUFG Tech Tour on Mon, BMO L.A. Property Tour on Mon, Etail East Boston on Mon, UBS Financial Services Conference on Tue, Cowen Communications Infrastructure Summit on Tue, Oppenheimer Technology, Internet & Communications Conference on Tue-Wed, Jefferies Global Industrials Conference on Tue-Thu, J.P. Morgan Auto Conference on Wed-Thu, Canaccord Genuity Growth Conference on Wed-Thu, UBS Genomics Summit on Thu, DA Davidson Technology Conference on Thu, Wells Fargo Securities Technology Services Forum on Thu.


**Overnight U.S. Stock Movers**

*Devon Energy (DVN -2.03%) was upgraded to 'Buy' from 'Neutral' at UBS with a price target of $53.

*Qualcomm (QCOM +0.97%) was upgraded to 'Outperform' from 'Market Perform' at Cowen with a price target of $80.

*Comcast (CMCSA +2.22%) was upgraded to 'Overweight' from 'Neutral' at Atlantic Equities LLP with a price target of $42.

*Madrigal Pharmaceuticals (MDGL -0.16%) was downgraded to 'Neutral' from 'Buy' at Goldman Sachs.

*Intercept Pharmaceuticals (ICPT -3.54%) was upgraded to 'Buy' from 'Sell' at Goldman Sachs with a price target of $157.

*PG&E (PCG +1.54%) was upgraded to 'Outperform' from 'Market Perform' a Wells Fargo Securities with a price target of $60.

*Applied Materials (AMAT +1.52%) was upgraded to 'Outperform' from 'Market Perform' at Cowen with a price target of $62.

*Omega Healthcare (OHI +0.97%) climbed more than 5% in after-hours trading after it raised the lower end of its full-year FFO range to $3.03 to $3.06 from a May 7 view of $2.96 to $3.06. 

*China Biologic Products Holdings (CBPO -1.76%) fell 2% in after-hours trading after it forecast full-year non-GAAP adjusted net income to decrease by 19% to 21% in RMB terms over full year 2017 financial results.

*WPX Energy (WPX -4.30%) was upgraded to 'Strong Buy' from 'Outperform' at Raymond James with a price target of $30.

*Arlo Technologies (ARLO +19.46%) rose more than 2% in after-hours trading on positive carry-over from Friday's 38% surge in the stock's first day of trading.




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