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OVERNIGHT MARKETS AND NEWS

Dec E-mini S&Ps (ESZ17 +0.07%) this morning are up +0.09% at a new record nearest-futures high and European stocks are up +0.45%. The prospects for U.S. tax reform is lifting equity prices, although gains in European stocks were limited due to political risks in Spain. Catalan President Puigdemont and the separatist groups that control the legislature in Barcelona will hold a plenary session on Thursday, while Spain's chief prosecutor said that if Puigdemont declares independence he would face as much as 30 years in jail and could be arrested immediately. Asian stocks settled mostly higher: Japan +1.11%, Hong Kong -0.64%, China +0.06%, Taiwan +0.06%, Australia -0.22%, Singapore +0.27%, South Korea +0.17%, India +0.36%. Japan's Nikkei Stock Index rallied to a new 21-year high and has closed higher for a record 15th consecutive sessions after Prime Minister Abe's ruling coalition retained its majority in Sunday's general election, which signals continuity with his platform of fiscal spending and monetary easing.

The dollar index (DXY00 +0.29%) is up +0.26% at a 2-week high. EUR/USD (^EURUSD) is down -0.34%. USD/JPY (^USDJPY) is up +0.33% at a 3-1/4 month high as the prospects of continued QE from the BOJ weakened the yen.

Dec 10-year T-note prices (ZNZ17 +0.01%) are unchanged as they hold above an overnight 2-week low.

Fed Chair Yellen said late Friday night that the neutral federal funds rate is much lower than in previous decades, which means "the probability that short-term interest rates may need to be reduced to their effective lower bound at some point is uncomfortably high, even in the absence of a major financial and economic crisis."

China Sep new home prices rose in 44 cities out of the 70 cities tracked by China's statistics bureau, lower than 46 that rose in Aug.

Japan Sep nationwide department store sales rose +4.4% y/y, the sharpest increase in 2-1/3 years.

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) Sep Chicago Fed national activity index (expected +0.21 to -0.10, Aug -0.34 to -0.31), (2) USDA weekly grain export inspections, (3) USDA Sep Cold Storage, (4) USDA crop conditions and progress report.

Notable S&P 500 earnings reports today include: Halliburton (consensus $0.38), Hasbro (1.94), VF Corp (1.12), State Street Corp (1.61), Kimberley-Clark (1.54), Seagate Technology (0.87), Illinois Took Works (1.65), Arconic (0.27), Whirlpool (3.94), Zions Bancorpation (0.72).

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

Equity conferences this week: Graph Connect Conference on Mon, American Association for the Study of Liver Diseases Liver Meeting on Mon, ASM Heat Treat Conference on Tue, In-Memory Computing Summit on Tue, Broadband World Forum on Tue, International Wafer-Level Packaging Conference on Tue, Digital Transformation Summit on Tue, Offshore Technology Conference on Tue, European AIDS Conference on Wed, Yahoo Finance All Markets Summit on Wed, European Committee for Treatment and Research in Multiple Sclerosis on Thu, Society of Women Engineers National Conference on Fri.

OVERNIGHT U.S. STOCK MOVERS

Illumina (ILMN +2.29%) was upgraded to 'Buy' from 'Hold' at Deutsche Bank with a price target of $250.

Dr. Pepper Snapple Group (DPS -0.31%) was upgraded to 'Outperform' from 'Market Perform' at Wells Fargo Securities with a price target of $98.

General Electric (GE +1.06%) was downgraded to 'Underweight' from 'Equal-Weight' at Morgan Stanley with a price target of $22.

JB Hunt Transport Services (JBHT +1.71%) was upgraded to 'Buy' from 'Neutral' at UBS with a price target of $126.

Biogen (BIIB -1.26%) was downgraded to 'Neutral' from 'Buy' at Citigroup.

Science Applications International (SAIC +1.49%) was upgraded to 'Buy' from 'Neutral' at Citigroup with a price target of $82.

Equifax (EFX -0.49%) was downgraded to 'Sector Perform' from 'Outperform' at RBC Capital Markets.

Southern Copper (SCCO -0.37%) was downgraded to 'Sector Underperform' from 'Sector Perform' at Scotiabank with a price target of $41.

Schmitt Industries (SMIT -0.55%) may move higher this morning after GAMCO Investors reported an 8.26% stake in the company, making it the third-largest equity holder.

Johnson & Johnson (JNJ +0.25%) said its Janssen Biotech company received FDA approval for its SIMPONI ARIA drug for the treatment of adults with active psoriatic arthritis or active ankylosing spondylitis.

DBV Technologies SA (DBVT +1.95%) plunged 50% in after-hours trading after its peanut-allergy patch failed to reach a primary endpoint in a Phase 3 trial. Competitor Aimmune Therapeutics (AIMT -0.23%) surged 60% in after-hours trading on the news.

MARKET COMMENTS

Dec S&P 500 E-mini stock futures (ESZ17 +0.07%) this morning are up +2.25 points (+0.09%) at a new record nearest-futures high. Friday's closes: S&P 500 +0.52%, Dow Jones +0.71%, Nasdaq +0.27%. The S&P 500 on Friday rallied to a new record high and settled higher on the improved prospects for passage of tax reform after the Senate adopted a fiscal 2018 budget resolution. Stocks were also boosted by the U.S. Sep existing home sales report of +0.7% to 5.39 million, stronger than expectations of -0.9% to 5.30 million.

Dec 10-year T-note prices (ZNZ17 +0.01%) this morning are unch. Friday's closes: TYZ7 -14.00, FVZ7 -5.75. Dec 10-year T-notes dropped to a 2-week low and closed lower. T-note prices were undercut by the rally in the S&P 500 to a new all-time high, the improved prospects for passage of tax reform, and the stronger-than-expected U.S. Sep existing home sales report.

The dollar index (DXY00 +0.29%) this morning is up +0.239 (+0.26%) at a 2-week high. EUR/USD (^EURUSD) is down -0.0040 (-0.34%) and USD/JPY (^USDJPY) is up +0.38 (+0.33%) at a 3-1/4 month high. Friday's closes: Dollar Index +0.435 (+0.47%), EUR/USD +0.0065 (+0.55%), USD/JPY -0.40 (-0.35%). The dollar index on Friday closed higher on the U.S. Senate's passage of a fiscal 2018 budget resolution, which boosts the odds for passage of tax reform. The dollar was also boosted by the unexpected increase in U.S. Sep existing home sales report. There was weakness in the yen as USD/JPY climbed to a 3-month high as the rally in the S&P 500 to a record high curbed the safe-haven demand for the yen.

Dec crude oil (CLZ17 +0.52%) is up +3 cents (+0.06%) and Dec gasoline (RBZ17 +0.35%) is +0.0019 (+0.12%). Friday's closes: Dec WTI crude +0.33 (+0.64%), Dec gasoline +0.0281 (+1.74%). Dec crude oil and gasoline on Friday closed higher with Dec gasoline at a 3-week high. Crude oil prices were boosted by the rally in the S&P 500 to a new all-time high and the rise in the crack spread to a 3-week high, which provides incentive for refineries to boost their crude purchases to refine crude into gasoline.

Metals prices this morning are mixed with Dec gold (GCZ17 -0.30%) -3.3 (-0.26%) at a 2-week low, Dec silver (SIZ17 -0.60%) -0.068 (-0.40%) and Dec copper (HGZ17 +0.32%) +0.004 (+0.11%). Friday's closes: Dec gold -9.5 (-0.74%), Dec silver -0.177 (-1.03%), Dec copper -0.0020 (-0.06%). Metals on Friday closed lower on a stronger dollar and on the rally in the S&P 500 to a new record high, which curbed the safe-haven demand for precious metals.

 

GLOBAL EVENT CALENDAR10/23/2017
Monday, Oct 23
US 0830 ET Sep Chicago Fed national activity index expected +0.21 to -0.10, Aug -0.34 to -0.31.
1100 ET USDA weekly grain export inspections.
1500 ET USDA Sep Cold Storage.
1600 ET USDA crop conditions and progress report.
Tuesday, Oct 24
US 0945 ET Oct Markit manufacturing PMI expected +0.4 to 53.5, Sep +0.3 to 53.1. Oct Markit services PMI expected -0.1 to 55.2, Sep -0.7 to 55.3.
1000 ET Oct Richmond Fed manufacturing index expected -3 to 16, Sep +5 to 19.
1300 ET Treasury auctions $26 billion of 2-year T-notes.
U.S. STOCK CALENDAR10/23/2017
NameTickerTimeDescriptionPeriodEstimate
Hasbro Inc HAS US 6:30 Q3 2017 Earnings Release Q3 17 1.943
Halliburton Co HAL US 6:45 Q3 2017 Earnings Release Q3 17 0.375
VF Corp VFC US 6:55 Q3 2017 Earnings Release Q3 17 1.117
State Street Corp STT US 7:00 Q3 2017 Earnings Release Q3 17 1.613
Kimberly-Clark Corp KMB US 7:30 Q3 2017 Earnings Release Q3 17 1.538
Seagate Technology PLC STX US 8:00 Q1 2018 Earnings Release Q1 18 0.867
Illinois Tool Works Inc ITW US 8:00 Q3 2017 Earnings Release Q3 17 1.649
Arconic Inc ARNC US 8:00 Q3 2017 Earnings Release Q3 17 0.271
Hasbro Inc HAS US 8:30 Q3 2017 Earnings Call Q3 17
VF Corp VFC US 8:30 Q3 2017 Earnings Call Q3 17
Halliburton Co HAL US 9:00 Q3 2017 Earnings Call Q3 17
Seagate Technology PLC STX US 9:00 Q1 2018 Earnings Call Q1 18
State Street Corp STT US 9:30 Q3 2017 Earnings Call Q3 17
Kimberly-Clark Corp KMB US 10:00 Q3 2017 Earnings Call Q3 17
Illinois Tool Works Inc ITW US 10:00 Q3 2017 Earnings Call Q3 17
Arconic Inc ARNC US 10:00 Q3 2017 Earnings Call Q3 17
Whirlpool Corp WHR US 16:30 Q3 2017 Earnings Release Q3 17 3.937
Zions Bancorporation ZION US 17:00 Q3 2017 Earnings Release Q3 17 0.72
Zions Bancorporation ZION US 17:30 Q3 2017 Earnings Call Q3 17


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Barchart U.S. Morning Call is written by the experienced members of the Commodity Research Bureau and the Barchart Research Team.  Commodity Research Bureau (CRB) has been providing research to the financial and commodity community since 1934.  If you have any questions for our analysts, please contact us at support@crbtrader.com.

Sent every morning, "Morning Call" summarizes overnight global market news, along with a U.S. market forecast for the day ahead. It Includes upcoming earnings reports, a global financial calendar, and quote board overview of where the markets are standing.

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