OVERNIGHT MARKETS AND NEWS

Sep E-mini S&Ps (ESU16 +0.18%) are up +0.16% at a new record high and European stocks are up +0.27% at a 2-1/2 month high on a +2.44% rally in Chinese stocks to a 7-month high and a +0.52% increase in crude oil prices (CLU16 +0.61%) to a 3-week high. Energy producing stocks are higher as crude oil rallied after Russian Energy Minister Novak said that Russia is open to cooperation with OPEC to help stabilize the oil market. European stocks also received a boost on an upbeat monthly economic report from the Bundesbank that said the fallout from Brexit to German companies appears limited and that German Q3 economic growth is expected to be strong. Asian stocks settled mixed: Japan -0.30%, Hong Kong +0.73%, China +2.44%, Taiwan -0.02%, Australia +0.16%, Singapore -0.01%, South Korea and India closed for holiday. Chinese stocks rallied sharply as real-estate companies surged after stake purchases by China Ever Grande Group fueled optimism of more mergers. Japanese stocks closed lower after Japan Q2 GDP grew less than expected.

The dollar index (DXY00 -0.13%) is down -0.10%. EUR/USD (^EURUSD) is up +0.09%. USD/JPY (^USDJPY) is down -0.23%.

Sep T-note prices (ZNU16 unch) are little changed, up +1 tick.

In its monthly report, the Bundesbank said that the Brexit impact on expectations by German companies has been mild so far and positive company expectations for export activities support solid growth in Q3. The Bundesbank projects manufacturing will contribute more strongly to economic growth in Q3 and that it sees higher investment in equipment and machinery due to above-average capacity utilization.

Japan Q2 GDP rose +0.2% (q/q annualized), weaker than expectations of +0.7% (q/q annualized). The Q2 GDP deflator rose +0.8% y/y, stronger than expectations of +0.7% y/y.

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) Aug Empire manufacturing index (expected +1.45 to 2.00, Jul -5.46 to 0.55), (2) Aug NAHB housing market index (expected +1 to 60, Jul -1 to 59), (3) USDA weekly grain export inspections, (4) USDA Weekly Crop Progress.

Russell 1000 companies that report earnings today: Sysco Corp (consensus $0.61).

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

Equity conferences this week: Nomura Media, Telecom & Internet Conference on Tue, EnerCom The Oil & Gas Conference on Tue, Wedbush PacGrow Health Care Conference on Tue-Wed, Barclays California MedTools Summit on Wed, Barclays Kohler Utility Mini-Conference on Thu.

OVERNIGHT U.S. STOCK MOVERS

Procter & Gamble (PG +0.36%) was upgraded to 'Buy' from 'Neutralí at B. Riley with a 12-month target price of $105.

Valient Pharmaceuticals (VRX +1.76%) was upgraded to 'Neutral' from 'Underperform' at Mizuho Securities USA.

Esterline Technologies (ESL -0.25%) was raised to 'Buy' from 'Hold' at Drexel Hamilton LLC with a 12-month target price of $86.

Patheon NV (PTHN +4.41%) was rated a new 'Overweight' at Piper Jaffray with a 12-month target price of $32.50.

Equity One (EQY +0.22%) was downgraded to 'Hold' from 'Buy' at Stifel.

Cypress Energy Partners LP (CELP -0.40%) was downgraded to 'Market Perform' from 'Outperform' at Raymond James.

Lennox International (LII -0.32%) was downgraded too 'Neutral' from 'Positive' at Susquehanna.

Channel Advisor reports that Amazon.com (AMZN +0.17%) July comparable sales were up +6.4% versus +11.6% in June and Ebay (EBAY -0.99%) comparable sales were up +3.5% versus +3.8% in June.

Badger Meter (BMI +0.67%) slid over 5% in after-hours trading after the company announced that its review of options to enhance shareholder value had been completed and that it will boost the dividend by 15% and increase the number of shares outstanding through a 2 for 1 stock split.

ACADIA Pharmaceuticals (ACAD -1.57%) gained over 1% in after-hours trading after Baker Bros. Advisors disclosed a 1.3 million share purchase of ACADIA stock on August 10 to increase its stake in the company to 21.56%.

Kingold Jewelry (KGJI +1.99%) catapulted higher by over 40% in after-hours trading after it reported Q2 EPS of 30 cents versus a gain of 1 cent y/y. Kingold reported Q2 net sales of $390.3 million, up +56.5% y/y, and the CEO cited increased gold demand in China and a "quick rebound" in gold prices.

MARKET COMMENTS

Sep E-mini S&Ps (ESU16 +0.18%) this morning are up +3.50 points (+0.16%) at a new all-time nearest-futures high. Friday's closes: S&P 500 -0.08%, Dow Jones -0.20%, Nasdaq +0.08%. The S&P 500 on Friday closed lower on the weak U.S. Jul retail sales report (unchanged and -0.3% ex autos, weaker than expectations of +0.4% and +0.1% ex autos) and the weaker-than-expected +0.4-point increase in Aug University of Michigan U.S. consumer sentiment index to 90.4 (vs expectations of +1.5 to 91.5).

Sep 10-year T-notes (ZNU16 unch) this morning are up +1 tick. Friday's closes: TYU6 +15.50, FVU6 +8.50. Sep T-notes on Friday closed higher on the weaker than weaker-than-expected U.S. retail sales, consumer sentiment, and PPI reports, which may further delay a Fed rate hike. T-notes were also boosted by global growth concerns after China July industrial production was weaker-than-expected and China July aggregate financing, the broadest measure of credit growth, rose at the slowest pace in 2 years.

The dollar index (DXY00 -0.13%) this morning is down -0.097 (-0.10%). EUR/USD (^EURUSD) is up +0.0010 (+0.09%). USD/JPY (^USDJPY) is down-0.23 (-0.23%). Friday's closes: Dollar index -0.135 (-0.14%), EUR/USD +0.0025 (+0.22%), USD/JPY -0.66 (-0.65%). The dollar index on Friday fell to a 1-week low and closed lower on the weaker-than-expected U.S. retail sales, consumer sentiment, and PPI reports that may further delay a Fed rate hike. In addition, EUR/USD rose to a 1-week high after Eurozone Jun industrial production rose +0.6% m/m, stronger than expectations of +0.5% m/m.

Sep WTI crude oil (CLU16 +0.61%) this morning is up +23 cents (+0.52%) at a 3-week high and Sep gasoline (RBU16 -0.53%) is down -0.0077 (-0.56%). Friday's closes: CLU6 +1.20 (+2.76%), RBU6 +0.0093 (+0.68%). Sep crude and gasoline on Friday closed higher with Sep crude at a 2-1/2 week high. Crude oil prices were boosted by the slide in the dollar index to a 1-week low and by reduced oil output from Nigeria, Africa's biggest crude producer, after the country's oil minister said that Nigerian crude output will be no more than 1.5 million bpd this year due to damage to oil infrastructure from militant attacks on oil installations. Crude oil prices were undercut by the Baker Hughes report showing that U.S. active oil rigs rose for a seventh week by 15 rigs to a 5-1/2 month high of 396 rigs.

GLOBAL EVENT CALENDAR08/15/2016
Monday, Aug 15
US0830 ETAug Empire manufacturing survey business conditions expected +1.45 to 2.00, Jul -5.46 to 0.55.
1000 ETAug NAHB housing market index expected +1 to 60, Jul -1 to 59.
1100 ETUSDA weekly grain export inspections.
1600 ETUSDA Weekly Crop Progress.
Tuesday, Aug 16
US0830 ETJul housing starts expected -0.8% to 1.180 million, Jun +4.8% to 1.189 million. Jul building permits expected +0.6% to 1.160 million, Jun +1.5% to 1.153 million.
0830 ETJul CPI expected unch m/m and +0.9% y/y, Jun +0.2% m/m and +1.0% y/y. Jul CPI ex food & energy expected +0.2% m/m and +2.3% y/y, Jun +0.2% m/m and +2.3% y/y.
0915 ETJul industrial production expected +0.3%, Jun +0.6%. Jul manufacturing production expected +0.2%, Jun +0.4%. Jul capacity utilization expected +0.2 to 75.6%, Jun +0.5 to 75.4%.
1230 ETAtlanta Fed President Dennis Lockhart (non-voter) speaks to the Rotary Club of Knoxville, TN.
UK0430 ETUK Jul CPI expected -0.1% m/m and +0.5% y/y, Jun +0.2% m/m and +0.5% y/y. Jul core CPI expected +1.4% y/y, Jun +1.4% y/y.
0430 ETUK Jul RPI expected -0.1% m/m and +1.6% y/y, Jun +0.4% m/m and +1.6% y/y. Jul RPI ex-mortgage interest payments expected +1.7% y/y, Jun +1.7% y/y.
0430 ETUK Jul PPI input prices expected +1.0% m/m and +2.0% y/y, Jun +1.8% m/m and -0.5% y/y.
0430 ETUK Jul PPI output prices expected +0.2% m/m and unch y/y, Jun +0.2% m/m and -0.4% y/y. Jul PPI output core expected +0.1% m/m and +0.8% y/y, Jun +0.1% m/m and +0.7% y/y.
GER0500 ETGerman Aug ZEW survey expectations of economic growth expected +9.3 to 2.5, Jul -26.0 to -6.8. Aug ZEW current situation expected +0.3 to 50.1, Jul -4.7 to 49.8.
U.S. STOCK CALENDAR08/15/2016
CompanyTickerTimeEvent DescriptionPeriodEstimate
Sysco CorpSYYBef-mktQ4 2016 Earnings ReleaseQ4 20160.606
Sysco CorpSYY10:00Q4 2016 Earnings CallQ4 2016
Microchip Technology IncMCHP12:00Annual General MeetingY 2016
American Express CoAXPCredit-card Charge-offs and Delinquencies
JPMorgan Chase & CoJPMCredit-card Charge-offs and Delinquencies
Bank of America CorpBACCredit-card Charge-offs and Delinquencies
Citigroup IncCCredit-card Charge-offs and Delinquencies
Capital One Financial CorpCOFCredit-card Charge-offs and Delinquencies
Alliance Data Systems CorpADSJuly 2016 Sales and Revenue Release2016
Alliance Data Systems CorpADSCredit-card Charge-offs and Delinquencies
Discover Financial ServicesDFSCredit-card Charge-offs and Delinquencies
Synchrony FinancialSYFCredit-card Charge-offs and Delinquencies