Jun E-mini S&Ps (ESM17 +0.24%) this morning are up +0.16% and European stocks are up +0.05% as a rally in crude oil prices lifts energy producing stocks. Apr WTI crude (CLJ17 +2.14%) is up sharply by +2.01% after API data released late Tuesday showed U.S. crude stockpiles fell -531,000 bbl last week. The markets are expecting the FOMC to raise the fed funds rate by 25 bp today, but will be looking at the Fed's economic projections and any guidance from Fed Chair Yellen as to the future course of monetary policy. European stocks and EUR/USD also received a boost as the latest polls show the pro-EU Liberal Party leading against the anti-EU Freedom Party in today's elections in the Netherlands. Asian stocks settled mixed: Japan -0.16%, Hong Kong -0.15%, China +0.08%, Taiwan -0.04%, Australia +0.26%, Singapore -0.19%, South Korea unchanged, India -0.15%. Chinese stocks erased losses and closed higher after Chinese Premier Li Keqiang played down the risk of a trade conflict when he said it was important for both China and the U.S. to keep talking to build trust.
The dollar index (DXY00-0.12%) is down -0.13%. EUR/USD (^EURUSD) is up +0.20%. USD/JPY (^USDJPY) is down -0.09%.
Jun 10-year T-note prices (ZNM17 +0.09%) are up +2.5 ticks.
ECB Executive Board member Praet said "looking through recent volatility, the inflation outlook does not at this stage warrant a reassessment of the current monetary policy stance." He added that "the recovery has yet to translate into a durable and self-sustained pick-up in inflation."
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) weekly MBA mortgage applications (previous +3.3% with purchase sub-index +1.7% and refi sub-index +5.2%), Mar Empire manufacturing survey general business conditions index (expected -3.7 to 15.0, Feb +12.2 to 18.7), (3) Feb CPI (expected unch m/m and +2.7% y/y, Jan +0.6% m/m and +2.5% y/y) and Feb CPI ex food & energy (expected +0.2% m/m and +2.2% y/y, Jan +0.3% m/m and +2.3% y/y), (4) Feb retail sales (expected +0.1% and +0.1% ex autos, Jan +0.4% and +0.8% ex autos), (5) Mar NAHB housing market index (expected unch at 65, Feb -2 to 65), (6) Jan business inventories (expected +0.3%, Dec +0.4%), (7) FOMC interest rate decision (expected 25 bp increase in fed funds target range to 0.75%-1.00%. FOMC releases updated macroeconomic forecasts and Fed Chair Yellen holds a press conference), (8) President Trump scheduled to release fiscal 2018 budget proposal, (9) EIA Weekly Petroleum Status Report.
U.S. IPO's scheduled to price today: Canada Goose Holdings (GOOS).
Equity conferences: JP Morgan Aviation, Transportation & Industrials Conference on Mon-Wed, Bank of America Merrill Lynch Consumer and Retail Tech Conference on Tue-Wed, Barclays Emerging Payments Forum on Tue-Wed, Barclays Global Health Care Conference on Tue-Thu, Gabelli & Co. Waste & Environmental Services Symposium on Thu, American College of Cardiology Meeting on Fri.
OVERNIGHT U.S. STOCK MOVERS
Netflix (NFLX-0.23%) was upgraded to 'Hold' from 'Underperform' at Jeffries.
Intel (INTC +0.06%) was downgraded to 'Neutral' from 'Outperform' at Credit Suisse.
WedMD (WBMD +0.38%) was downgraded to 'Market Perform' from 'Outperform' at Cowen with a 12-month target price of $55.
AMC Entertainment Holdings (AMC +0.49%) was downgraded to 'Underperform' from 'Neutral' at Credit Suisse.
Penn Virginia (PVAC-0.20%) was rated a new 'Buy' at Johnson Rice.
Snapchat (SNAP-2.42%) was rated new 'Underweight' at Cantor Fitzgerald.
NeoPhotonics (NPTN-5.05%) sold-off 13% in after-hours trading after it said it sees Q1 revenue of $67 million-$73 million, well below consensus of $98 million.
Achaogen (AKAO-5.75%) sank 10% in after-hours trading after it reported a Q4 loss of -$1.04 a share, a much bigger loss than consensus of -48 cents.
Endo International PLC (ENDP-4.22%) lost 2% in after-hours trading after an FDA advisory panel said that the benefits of Endo's Opana XR no longer outweigh the risks.
FTD Cos. (FTD-0.68%) dropped over 8% in after-hours trading after it reported Q4 revenue of $280.7 million, below consensus of $282.5 million.
Rosetta Stone (RST +3.27%) jumped 12% in after-hours trading after it reported Q4 revenue of $51.7 million, higher than consensus of $48.1 million, and said it will provide Sourcenext in a license deal for education markets in Japan.
Fogo De Chao (FOGO-5.02%) rose almost 3% in after-hours trading after it reported Q4 adjusted EPS of 28 cents, better than consensus of 27 cents, and then said it sees full-year adjusted EPS of 92 cents-95 cents, above consensus of 92 cents.
Rubicon Project (RUBI-1.99%) slumped 14% in after-hours trading after it forecast a Q1 adjusted loss per share of -22 cents to -26 cents, much weaker than consensus of a profit of 10 cents.
T2 Biosystems (TTOO unch) fell over 3% in after-hours trading after it was downgraded to 'Underweight' from Equal-Weight' at Morgan Stanley.
Jun E-mini S&Ps (ESM17 +0.24%) this morning are up +3.75 points (+0.16%). Tuesday's closes: S&P 500 -0.34%, Dow Jones -0.21%, Nasdaq -0.23%. The S&P 500 on Tuesday closed lower on the U.S. Feb PPI final demand report of +0.3% m/m and +2.2% y/y (stronger than expectations of +0.2% m/m and +1.9% y/y with the +2.2% y/y gain the largest year-on-year increase in 4-3/4 years) and the -1.40% slump in crude oil prices to a 3-1/2 month low, which undercut energy producing stocks.
Jun 10-year T-notes (ZNM17 +0.09%) this morning are up +2.5 ticks. Tuesday's closes: TYM7 +2.50, FVM7 +1.00. Jun 10-year T-notes recovered from a 2-1/2 month low Tuesday and closed higher on the slump in crude oil prices to a 3-1/2 month low, which reduces inflation expectations, and on the slide in stocks that boosted the safe-haven demand for T-notes. Gains were limited after U.S. Feb PPI final demand rose more than expected, which may prompt the Fed to speed up the pace of its rate hikes.
The dollar index (DXY00-0.12%) this morning is down -0.13 (-0.13%). EUR/USD (^EURUSD) is up +0.0021 (+0.20%). USD/JPY (^USDJPY) is down -0.10 (-0.09%). Tuesday's closes: Dollar index +0.44 (+0.43%), EUR/USD -0.0049 (-0.46%), USD/JPY -0.13 (-0.11%). The dollar index on Tuesday closed higher on the +2.2% y/y gain in U.S. Feb PPI final demand report, the largest year-on-year increase in 4-3/4 years, which bolsters the case for the Fed to continue raising interest rates. There was also weakness in GBP/USD which fell to a 1-3/4 month low on Brexit concerns after the UK Parliament voted to give Prime Minister May the go-ahead to invoke Article 50 of the Lisbon Treaty that takes the UK out of the European Union.
Apr WTI crude oil prices (CLJ17 +2.14%) this morning are up +96 cents (+2.01%) and Apr gasoline (RBJ17 +1.47%) is +0.0209 (+1.32%). Tuesday's closes: Apr crude -0.68 (-1.40%), Apr gasoline +0.0028 (+0.18%). Apr crude oil and gasoline on Tuesday settled mixed with Apr crude at a 3-1/2 month low. Crude oil prices were undercut by a stronger dollar and by increased Saudi crude output after Saudi Arabian Feb crude oil production rose +2.7% m/m to 10.0111 million bpd. Crude oil prices were also undercut by expectations for Wednesday's EIA data to show crude inventories rose +3.0 million bbl. Gasoline closed higher on expectations for Wednesday's EIA gasoline stockpiles to fall -2.0 million bbl.
GLOBAL EVENT CALENDAR03/15/2017
Wednesday, Mar 15
Weekly MBA mortgage applications, previous +3.3% with purchase sub-index +1.7% and refi sub-index +5.2%.
Mar Empire manufacturing survey general business conditions expected -3.7 to 15.0, Feb +12.2 to 18.7.
Feb CPI expected unch m/m and +2.7% y/y, Jan +0.6% m/m and +2.5% y/y. Feb CPI ex food & energy expected +0.2% m/m and +2.2% y/y, Jan +0.3% m/m and +2.3% y/y.
Feb retail sales expected +0.1% and +0.1% ex autos, Jan +0.4% and +0.8% ex autos.
Mar NAHB housing market index expected unch at 65, Feb -2 to 65.
Jan business inventories expected +0.3%, Dec +0.4%.
EIA Weekly Petroleum Status Report.
FOMC interest rate decision expected 25 bp increase in fed funds target range to 0.75%-1.00%. FOMC releases updated macroeconomic forecasts and Fed Chair Yellen holds a press conference.
President Trump scheduled to release fiscal 2018 budget proposal.
U.S. debt ceiling suspension expires, but Treasury has until Aug-Sep until default.
Thursday, Mar 16
Weekly initial unemployment claims expected -3,000 to 240,000, previous +20,000 to 243,000. Weekly continuing claims expected -5,000 to 2.053 million, previous -6,000 to 2.058 million.
Feb housing starts expected +1.4% to 1.263 million, Jan -2.6% to 1.246 million. Feb building permits expected -2.0% to 1.267 million, Jan +5.3% to 1.293 million.
USDA weekly Export Sales.
Mar Philadelphia Fed business outlook survey expected -13.3 to 30.0, Feb +19.7 to 43.3.
Jan JOLTS job openings expected +61,000 to 5.562 million, Dec -4,000 to 5.501 million.
Treasury announces amount of 10-year TIPS to be auctioned Mar 23 (previous $13 billion).
Treasury Secretary Mnuchin and German Finance Minister Schaeuble meet in Berlin to discuss trade and economic issues, with a joint press conference to follow the meeting.