Morning Call: Optimism about global trade boosts stocks; Jun E-mini S&Ps up +0.55%; Japan's Nikkei Stock Index up +2.65%.
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 ESM18 - S&P 500 E-Mini
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ESM182,713.00s-5.75-0.21%
DXY0093.637s+0.168+0.18%
ZNM18118-270s+0-105+0.28%
CLK1868.38s+0.09+0.13%
RBK182.1292s+0.0023+0.11%
GCJ181,316.3s-4.9-0.37%
SIK1816.387s-0.026-0.16%
HGK183.0510s-0.0260-0.84%
PLD63.24-0.04-0.06%
XEL43.70-0.13-0.30%
BBT54.91-0.52-0.94%
RHT163.28+2.20+1.37%
ANAB87.57-1.82-2.04%
BCO70.65-0.10-0.14%
TSRO47.71-2.87-5.67%
DISH32.35-0.30-0.92%
MGNX21.75+0.41+1.92%
OSTK37.90+0.55+1.47%
WPZ41.23-0.26-0.63%
HOME36.99+1.00+2.78%
LAND12.72-0.06-0.47%
NVTA6.80+0.26+3.98%

Overnight Markets and News

Jun E-mini S&Ps (ESM18 +0.58%) this morning are up +0.55% and European stocks are up +1.53% as global stock markets rally on reduced concerns for a trade war. U.S. Treasury Secretary Mnuchin said he and his Chinese counterpart have been discussing the trade deficit between the two countries and were committed to finding a mutually agreeable way to reduce the trade gap and help China avoid tariffs. Increased M&A activity gave U.S. and European stocks a boost as well after the Dutch company Akzo Nobel NV sold its chemical unit to Carlyle Group for 10.1 billion euros ($12.5 billion). Asian stocks settled higher: Japan +2.65%, Hong Kong +0.79%, China +1.05%, Taiwan +1.35%, Australia +0.72%, Singapore +0.79%, South Korea +0.46%, India +0.33%.

The dollar index (DXY00 +0.45%) is up +0.42%. EUR/USD (^EURUSD -0.42%) fell back from a 1-1/4 month high in overnight trade and is down -0.35% after Eurozone Mar economic confidence fell to a 6-month low and after Eurozone Feb M3 money supply rose +4.2% y/y, the smallest pace of increase in 3 years. USD/JPY (^USDJPY +0.35%) is up +0.31%.

Jun 10-year T-note prices (ZNM18 -0-015) are little changed, down -0.5 of a tick.

Eurozone Mar economic confidence fell -1.6 to a 6-month low of 112.6, weaker than expectations of -0.8 to 113.3. The Mar business climate indicator fell -0.14 to 1.34, weaker than expectations of -0.12 to 1.36.

Eurozone Feb M3 money supply rose +4.2% y/y, weaker than expectations of +4.6% y/y and the smallest pace of increase in 3 years.

The German Feb import price index fell -0.6% m/m, weaker than expectations of -0.3% m/m and the biggest decline in 8 months.

Japan Feb PPI services prices rose +0.6% y/y, weaker than expectations of +0.7% y/y and the slowest pace of increase in 6 months.

U.S. Stock Preview

Key U.S. news today includes: (1) Jan S&P CoreLogic composite-20 home price index (expected +0.6% m/m and +6.1% y/y, Dec +0.64% m/m and +6.3% y/y), (2) Mar Richmond Fed manufacturing index (expected -6 to 22, Feb +14 to 28), (3) Conference Board Mar U.S. consumer confidence (expected +0.2 to 131.0, Feb +6.5 to 130.8), (4) Atlanta Fed President Raphael Bostic (voter) speaks at an economic policy conference in Atlanta, (5) Treasury auctions $35 billion of 5-year T-notes.

Notable Russell 1000 earnings reports today include: FactSet (consensus $2.07), IHS Markit (0.50), McCormick (0.90), Lululemon Athletica (1.27).

U.S. IPO's scheduled to price today: OP Bancorp (OPBK), Bilibili Inc (BILI), OneSmart Intl Education Group (ONE).

Equity conferences this week: Scotia Howard Weil Energy Conference on Mon-Tue, Needham & Company Health Care Conference on Tue, Bank of America Merrill Lynch Auto Summit on Wed, Barclays, Chemical ROC Stars Conference on Wed.

Market Comments

Jun S&P 500 E-mini stock futures (ESM18 +0.58%) this morning are up +14.50 points (+0.55%). Monday's closes: S&P 500 +2.72%, Dow Jones +2.84%, Nasdaq +3.78%. The S&P 500 on Monday closed sharply highe on reduced concerns about a trade war between China and the U.S. after Treasury Secretary Mnuchin said he's "cautiously hopeful" that China will reach a deal to avoid tariffs. There was also a sharp rally in beaten-down technology stocks. Stocks also received a boost from the rise in the Feb Chicago Fed national activity index by +0.86 points to a 4-month high of 0.88, stronger than expectations of +0.03 to 0.15.

Jun 10-year T-note prices (ZNM18 -0-015) this morning are down -0.5 of a tick. Monday's closes: TYM8 -4.50, FVM8 -3.75. Jun 10-year T-notes on Monday closed lower on reduced safe-haven demand for T-notes after stocks rallied on reduced trade-war concerns. T-notes were also undercut by supply pressures as the Treasury auctions $109 billion of T-notes and floating-rate notes this week.

The dollar index (DXY00 +0.45%) this morning is up +0.373 (+0.42%). EUR/USD (^EURUSD -0.42%) is down -0.0043 (-0.35%) and USD/JPY (^USDJPY +0.35%) is up +0.33 (+0.31%). Monday's closes: Dollar Index -0.409 (-0.46%), EUR/USD +0.0091 (+0.74%), USD/JPY +0.67 (+0.64%). The dollar index on Monday fell to a 5-week low and closed lower on strength in GBP/USD which climbed to a 1-3/4 month high as concerns eased about a UK hard Brexit after the UK's Labour party said it would seek an amendment to key Brexit legislation to prevent Britain leaving the EU without a deal. In addition, EUR/USD rallied to a 5-week high on hawkish comments from ECB Governing Council member Weidmann who said "it's particularly important to start soon" to end asset purchases and to start to raise interest rates.

May crude oil (CLK18 +0.44%) this morning is up +21 cents (+0.32%) and May gasoline (RBK18 +0.48%) is +0.0070 (+0.35%). Monday's closes: May crude -0.33 (-0.50%), May gasoline -0.0212 (-1.04%). May crude oil and gasoline on Monday closed lower on a lack of damage to Saudi Arabia's oil infrastructure after a missile attack Sunday from Houthi rebels. There was also negative carry-over from Friday's Baker Hughes report that U.S. active oil rigs in the week ended Mar 23 rose by +4 rigs to a 2-3/4 year high of 804 rigs.

Metals prices this morning are mixed with Apr gold (GCJ18 -0.66%) -7.0 (-0.52%), May silver (SIK18 -0.38%) -0.024 (-0.14%), and May copper (HGK18 +0.96%) +0.031 (+1.03%). Monday's closes: Apr gold +5.1 (+0.38%), May silver +0.102 (+0.62%), May copper -0.0230 (-0.77%). Metals on Monday settled mixed with Apr gold at a 1-month high, May silver at a 2-1/2 week high, and May copper at a 3-1/2 month low. Metals prices were boosted by the slide in the dollar index to a 5-week low and by fund-buying of gold as long gold positions in ETFs rose to a 4-3/4 year high Friday. Metals prices were undercut by the rally in stocks that reduced safe-haven demand for precious metals, and by signs of adequate copper supplies after LME copper inventories surged by +35,000 MT to a 10-1/2 month high of 352,750 MT.

Overnight U.S. Stock Movers

Prologis (PLD +1.86%) was upgraded to 'Overweight' from 'Neutral' at JPMorgan Chase with a price target of $68.

Xcel Energy (XEL +0.91%) was upgraded to 'Buy' from 'Neutral' at Mizuho Securities USA with a price target of $47.

BB&T (BBT +3.04%) was upgraded to 'Buy' from 'Neutral' at B. Riley FBR with a price target of $59.

Red Hat (RHT +3.51%) rallied 5% in after-hours trading after it reported Q4 revenue of $772.3 million, better than consensus of $761.9 million, and forecast Q1 revenue of $800 million to $810 million, above consensus of $795 million.

AnaptysBio (ANAB +3.04%) jumped over 9% in after-hours trading after it said a Phase 2a trial of its ANB020 peanut allergy treatment shows "positive top-line proof-of-concept-data."

Brink's (BCO +3.56%) was rated a new 'Buy' at Buckingham Research Group with a price target of $100.

Tesaro (TSRO -2.24%) climbed over 2% in after-hours trading after it said data from a TOPACIO trial shows "compelling" clinical activity of niraparib in combination with an anti-PD-1 antibody in patients with refractory ovarian cancer.

DISH Network (DISH +1.20%) was rated a new 'Outperform' at Cowen with a price target of $54.

MacrGenics (MGNX +3.36%) fell 4% in after-hours trading after it announced that it intends to offer 4.5 million shares of its common stock in an underwritten public offering.

Overstock.com (OSTK -1.33%) tumbled nearly 10% in after-hours trading after it announced that it intends to offer 4.0 million shares of its common stock in an underwritten public offering.

Williams Partners (WPZ +1.60%) was downgraded to 'Market Perform' from 'Outperform' at Bernstein.

At Home Group (HOME -0.67%) lost nearly 2% in after-hours trading after it announced the launch of an underwritten secondary public offering of 6.0 million shares of its common stock by holders.

Gladstone Land (LAND -0.63%) fell 6% in after-hours trading after it announced that it intends to offer 1.0 million shares of its common stock in an underwritten public offering.

Invitae (NVTA -0.28%) dropped 7% in after-hours trading after it announced that it intends to offer $50 million of shares of its common stock in an underwritten public offering.