Sep E-mini S&Ps (ESU16 +0.46%) are up +0.52% at a fresh record high and European stocks are up +1.79% at a 2-week high. U.S. stocks received a boost from Alcoa which is up over 4% in pre-market trading after it started off Q2 earnings reporting season by reporting higher than expected Q2 earnings. European stocks found support with a rally in automakers, led by an over 4% jump in Daimler AG after it reported a 5.6% increase in adjusted earnings. Also, Home Secretary May is prepared to take over as the UK's next prime minister, which removes some political uncertainty in Britain. Asian stocks settled higher: Japan +2.49%, Hong Kong +1.65%, China +1.82%, Taiwan +0.63%, Australia +0.30%, Singapore +0.89%, South Korea +0.06%, India +0.66%. China's Shanghai Composite climbed to a 2-1/2 month high on the heels of the rally in the S&P 500 to a record high. Also, China International Capital Corp and CIMB Securities Ltd. said that China's pension funds, which have about 2 trillion yuan ($299 billion) available for investment, may start to deploy some of their holdings in securities including equities in the second half of this year. Japan's Nikkei Stock Index rallied to a 2-week high as the yen fell to a 2-week low against the dollar, which boosted exporter stocks.
The dollar index (DXY00 -0.22%) is down -0.37%. EUR/USD (^EURUSD) is up +0.28%. USD/JPY (^USDJPY) is up +0.89% at a 2-week high after Japanese Prime Minister Abe said he wants to "accelerate" Japan's exit from deflation, which suggests he favors additional yen-negative stimulus measures.
Sep T-note prices (ZNU16 -0.25%) are down -10.5 ticks.
Speaking in Sydney, Cleveland Fed President Mester said the "the timing of the next Fed rate hike is going to depend on how the economy evolves." She added that she's "comfortable that we're not behind the curve, but that she thinks a gradual upward tilt for interest rates is appropriate for the U.S. economy."
Key U.S. news today includes: (1) Fed Governor Danial Tarullo delivers opening remarks at a conference on shadow banking, (2) St. Louis Fed President James Bullard (voter) delivers a presentation at a breakfast meeting of the NABE, (3) May wholesale inventories (expected +0.2% m/m, Apr +0.6% m/m) and May wholesale trade sales (expected +0.5% m/m, Apr +1.0% m/m), (4) May JOLTS job openings (expected -288,000 to 5.500 million, Apr +118,000 to 5.788 million), (5) Treasury's auction of $20 billion of 10-year T-notes, (6) Minneapolis Fed President Neel Kashkari (non-voter) holds a town hall forum at Northern Michigan University on the state of the economy and the role of the Federal Reserve, and (7) USDA July WASDE crop production.
Russell 1000 companies reporting earnings today: Fastenal (consensus $0.48), Commerce Bancshares (0.68).
U.S. IPO's scheduled to price today: none.
Equity conferences this week include: none.
Pinnacle Foods (PF -1.83%) was upgraded to a 'Buy' at Goldman Sachs.
Alcoa (AA +3.26%) rallied +4% in pre-market trading after reporting Q2 adjusted EPS of 15 cents, which was better than the consensus of 9 cents. Q2 revenue of $5.30 billion was close to the market consensus.
Seagate Technology (STX +0.33%) rallied 13% in pre-market trading after its preliminary Q4 revenue beat expectations and the company announced more cost-cutting by cutting 14% of jobs.
Oracle (ORCL -0.22%) was upgraded to 'Outperform' from 'Market Perform' at BMO Capital Markets.
Astec Industries (ASTE +1.36%) was downgraded to 'Hold' from 'Buy' at BB&T Capital Markets.
Swift Transportation (SWFT +0.96%) and Marten Transport Ltd (MRTN +0.09%) were both downgraded to 'Sector Weight' from 'Oveweight' at Keyblanc Capital Markets.
Fastenal (FAST +0.29%) reported Q2 EPS of 45 cents, below consensus of 48 cents.
RR Donnelley (RRD +2.33%) rallied 5% in after-hours trading on a report by Bloomberg that Xerox (XRX -0.42%) is in early-stage talks to acquire Donnelley.
Imperva (IMPV +7.55%) fell -12% in after-hours trading after reporting disappointing adjusted EPS and revenue figures.
Tesla (TSLA +3.69%) fell -1% in after-hours trading on continued concern about the WSJ report that the SEC is considering whether Tesla failed to report a recent crash as a material event.
Sep E-mini S&Ps (ESU16 +0.46%) this morning are up +11.00 points (+0.52%) at a fresh record high. Monday's closes: S&P 500 +0.34%, Dow Jones +0.44%, Nasdaq +0.64%. The S&P 500 on Monday rallied to a new record high and closed moderately higher on support from the +4% rally in the Nikkei index after Japanese PM Abe's LDP party in Sunday's elections gained a supermajority in the upper house of parliament, ensuring a new fiscal stimulus program totaling as much as $200 billion. U.S. stocks also rallied on reduced UK political uncertainty and indications that Brexit will move more quickly after Theresa May's opponent in the PM race dropped out, allowing Ms. May to become PM by Wednesday.
Sep 10-year T-note prices (ZNU16 -0.25%) this morning are down -10.5 ticks. Monday's closes: TYU6 -20.5, FVU6 -11.75. Sep 10-year T-notes on Monday closed sharply lower on the prospects for a large Japanese fiscal stimulus program and on reduced Brexit uncertainty as Theresa May will become Prime Minister by Wednesday, much sooner than expectations of September. T-notes were also undercut by reduced safe-haven demand with the rally in the S&P 500 index to a new record high and by Kansas City Fed President Esther George's (voter) resumption of her campaign for higher interest rates following last Friday's strong payroll report.
The dollar index (DXY00 -0.22%) this morning is down -0.360 (-0.37%), while EUR/USD (^EURUSD) is up +0.0031 (+0.28%) and USD/JPY (^USDJPY) is up +0.92 (+0.89%) at a 2-week high. Monday's closes: Dollar Index +0.276 (+0.29%), EUR/USD +0.0008 (+0.07%), USD/JPY +2.25 (+2.24%). The dollar index on Monday edged to a new 3-month high and closed mildly higher on weakness in the yen caused by reduced safe-haven demand due to the rally in the S&P 500 index to a new record high. The yen also saw weakness on expectations for further BOJ easing in conjunction with a new Japanese fiscal stimulus program. The dollar also continued to receive support from last Friday's strong U.S. payroll report.
Aug WTI crude oil (CLQ16 +2.50%) prices this morning are up +$1.32 a barrel (+2.95%) and Aug gasoline prices (RBQ16 +2.48%) are up +0.0405 (+2.93%). Monday's closes: CLQ6 -0.65 (-1.43%), RBQ6 +0.0127 (+0.93%). Aug crude and gasoline on Monday closed mixed. Crude oil prices were undercut by last Friday's news from Baker Hughes that active U.S. oil rigs rose by +10 rigs to 351 in the week ended July 8, adding to the previous week's +11 rig increase. Crude oil prices received some underlying support from expectations for a -3.5 million bbl decline in Wednesday's weekly EIA U.S. crude oil inventories report. Gasoline rallied on some short-covering after the recent sell-off.
|Tuesday, July 12, 2016|
|US||0915 ET||Fed Governor Danial Tarullo delivers opening remarks at a conference on shadow banking.|
|0935 ET||St. Louis Fed President James Bullard (voter) delivers a presentation at a breakfast meeting of the NABE.|
|1000 ET||May wholesale inventories expected +0.2% m/m, Apr +0.6% m/m. May wholesale trade sales expected +0.5% m/m, Apr +1.0% m/m.|
|1000 ET||May JOLTS job openings expected -288,000 to 5.500 million, Apr +118,000 to 5.788 million.|
|1200 ET||USDA Jul WASDE crop production.|
|1300 ET||Treasury auctions $20 billion of 10-year T-notes.|
|1730 ET||Minneapolis Fed President Neel Kashkari (non-voter) holds a town hall forum at Northern Michigan University on the state of the economy and the role of the Federal Reserve.|
|Wednesday, July 13, 2016|
|US||0700 ET||Weekly MBA mortgage applications, previous +14.2% with purchase sub-index +4.3% and refi sub-index +20.8%.|
|0830 ET||Jun import price index expected +0.6% m/m and -4.6% y/y, May +1.4% m/m and -5.0% y/y.|
|1030 ET||EIA Weekly Petroleum Status Report.|
|1300 ET||Treasury auctions $12 billion of 30-year T-bonds.|
|1400 ET||Jun monthly budget statement expected +$24.0 billion, May -$52.507 billion.|
|1400 ET||Fed Beige Book.|
|1800 ET||Philadelphia Fed President Patrick Harker (non-voter) speaks on the economic outlook at an event in Philadelphia.|
|JPN||0030 ET||Revised Japan May industrial production, prelim-May -2.3% m/m and -0.1% y/y.|
|0030 ET||Japan May capacity utilization, Apr -1.0% m/m.|
|UK||0430 ET||BOE credit conditions and bank liabilities surveys.|
|1901 ET||UK Jun RICS house price balance expected 9%, May 19%.|
|EUR||0500 ET||Eurozone May industrial production, Apr +1.1% m/m and +2.0% y/y.|
|Fastenal Co||FAST||7:00||Q2 2016 Earnings Release||Q2 2016||0.476|
|Fastenal Co||FAST||10:00||Q2 2016 Earnings Call||Q2 2016|
|American Airlines Group Inc||AAL||June 2016 Sales and Revenue Release - Traffic Results||2016|
|Commerce Bancshares Inc/MO||CBSH||Q2 2016 Earnings Release||Q2 2016||0.683|
|Genesee & Wyoming Inc||GWR||June 2016 Sales and Revenue Release - Traffic Results||2016|
|Copa Holdings SA||CPA||June 2016 Sales and Revenue Release - Traffic Statistics||2016|