Stock Market Update from Briefing.com

3:35 pm: [BRIEFING.COM]

  • The dollar index is up +0.3% trading near the 96.03 level, weighing on commodities
    • Commodities, as measured by the Bloomberg Commodity Index, are down -0.5% at 88.84
  • Crude oil plummets to close at fresh lows of the session after finding resistance near the $50/barrel handle as the long July 4th weekend approaches
    • August crude oil futures fell $1.58 (-3.2%) to $48.26/barrel
    • Monthly IEA data is scheduled to be released on July 13th
    • Baker Hughes rig count data will be released tomorrow at 1 pm ET
  • Natural gas surges near highs of the year after EIA natural gas inventory data released this morning showed a smaller-than-expected build compared to Consensus
    • August natural gas closed $0.06 higher (+2.1%) at $2.92/MMBtu
      • Natural gas inventory showed a build of +37 bcf vs expectations for inventory to be a build of approximately +48 bcf.
      • Working gas in storage was 3,140 Bcf as of Friday, June 24, 2016, according to EIA estimates.
      • Stocks were 582 Bcf higher than last year at this time and 637 Bcf above the five-year average of 2,503 Bcf.
      • At 3,140 Bcf, total working gas is above the five-year historical range.
  • In precious metals, gold consolidates in the afternoon, seeing little movement from session lows hit this morning
    • August gold ended today's session down $6.40 (-0.5%) to $1320.20/oz
  • Silver extends this morning's rally, closing higher on the day even as the dollar index gains momentum
    • September silver closed today's session $0.19 higher (+1.0%) at $18.60/oz
  • Base metal copper ends afternoon pit trading unchanged for the day
    • September copper closed flat at $2.19/lb
  • Grains futures show notable movement after the release of the USDA's Annual Acreage Report & the quarterly grain stocks report:
    • December corn closed $0.10 lower (-2.6%) at $3.74/bushel
    • September wheat closed $0.01 higher (+0.2) at $4.45/bushel
    • November soybeans closed $0.41 higher (+3.7%) at $11.55/bushel
    • October sugar closed $0.01 lower (-4.8%) at $0.20/lb
      • Acreage report shows:
        • Corn Planted Acreage Up 7% from 2015
        • Soybean Acreage Up 1%
        • All Wheat Acreage Down 7%
        • All Cotton Acreage Up 17%
      • Quarterly grain stocks report shows:
        • Corn Stocks Up 6 % from June 2015
        • Soybean Stocks Up 39%
        • All Wheat Stocks Up 30%

3:00 pm:

[BRIEFING.COM] As the stock market enters its final hour of trade for the second quarter, the S&P 500 (+1.2%) trades in-line with the Dow Jones Industrial Average (+1.2%).

All ten sectors trade in the green with consumer staples (+1.8%) and industrials (+1.6%) leading the pack. The remaining gainers sport upticks between 0.6% (consumer discretionary) and 1.5% (utilities).

In the industrial sector (+1.6%), Dow component General Electric (GE 31.43, +0.88) tops the price-weighted index, gaining 2.9%. The stock is seeing continued strength from yesterday's approval to have its nonbank Systemically Important Financial Institution designation removed. Elsewhere, the Dow Jones Transportation Average (+0.6%) demonstrates relative weakness as airline and shipping names underperform. On that note, Kirby (KEX 62.37, -2.15) is the worst performer in the Transportation Index.

The Treasury complex trades modestly higher despite the rally in equities. The yield on the 10-yr note has slipped four basis points to 1.47%.

WTI crude ended its pit session lower by 3.2% ($48.26; -$1.58), losing 1.7% in June.

2:30 pm:

[BRIEFING.COM] The major indices recently notched new session highs as the S&P 500 (+1.2%) leads the tech-heavy Nasdaq (+1.1%). Elsewhere, the Russell 2000 (+1.0%) trades narrowly behind the other indices.

On the bottom of the leaderboard, the energy sector (+0.9%) leads consumer discretionary (+0.8%) and health care (+0.8%). The commodity-sensitive group has struggled to keep pace with the market amid a downturn in crude oil. Currently, WTI crude trades lower by 1.5% ($49.14/bbl; -$0.75) ahead of its pit session close at 14:30 ET. In the group, refining names demonstrate relative weakness as Phillips 66 (PSX 78.97, -0.73) and Valero Energy (VLO 50.53, -1.40) lose a respective 0.9% and 2.7%. The broader sector shows a gain of 3.2% in June, leading the remaining cyclical sectors.

The U.S. Dollar Index (96.22, +0.45) trades higher by 0.5% as the greenback gains ground against the yen, euro, and pound. The dollar/yen pair trades higher by 0.4% (103.20) while the single currency has lost 0.6% against the buck (1.1055). Separately, the pound has fallen 1.5% against the dollar (1.3226) after Bank of England Governor Mark Carney hinted at more stimulus in the pipeline.

2:00 pm:

[BRIEFING.COM] The major averages have floated sideways since the last update as the Dow Jones Industrial Average (+1.0%) and the S&P 500 (+1.0%) lead the Nasdaq Composite (+0.8%). The benchmark index trades within three points of its session high.

The health care space (+0.6%) trades behind the broader market as biotechnology lags. The iShares Nasdaq Biotechnology ETF (IBB 256.69, +0.64) has inched higher by 0.3%, extending its weekly gain to 3.1%. The ETF registered the bulk of that gain on Tuesday and Wednesday, rallying 6.0% from Monday's settlement. Health care plan names demonstrate relative weakness as CIGNA (CI 127.14, -1.69) and Humana (HUM 178.63, -5.02) decline by 1.3% and 2.7%, respectively. On that note, CIGNA is seeing headwinds after reports indicated that the Department of Justice remains wary of the company's merger with Anthem (ANTM 131.29, -0.19). The broader sector has gained 3.1% this week, having climbed 0.5% in June.

On the commodities front, gold ended its day lower by 0.5% ($1,320.20/ozt; -$6.40), trimming its monthly gain to 8.4%.

1:30 pm:

[BRIEFING.COM] The major U.S. indices have continued to climb higher, with stocks currently at their session highs. 

A look inside the Dow Jones Industrial Average shows that General Electric (GE 31.28, +0.73), Goldman Sachs (GS 148.61, +3.11), and Intel (INTC 32.58, +0.65) are outperforming. GE is building on yesterday's gains, which were driven by the Financial Stability Oversight Council rescinding GE Capital's designation as a nonbank Systemically Important Financial Institution. Goldman, like most financials, is trading higher after having its capital plan accepted by the Federal Reserve in its Comprehensive Capital Analysis and Review. Intel is advancing after Bloomberg reported that the company was partnering with Mobileye (MBLY 46.68, +4.72) to develop autonomous driving technology for BMW. 

Conversely, Visa (V 74.94, -1.80) is the worst-performing Dow component after a Federal appeals court vacated it and Mastercard's (MA 89.85, -2.28) prior $7.25 bln antitrust settlement with retailers over credit and debit card fees. 

For the week, the DJIA is now +2.67%, pushing June returns into positive trading on the final trading day of the month. 

1:10 pm:

[BRIEFING.COM] The stock market trades on a higher note at midday, extending its rally into the third day alongside European bourses. In particular, Bank of England Governor Mark Carney added to the risk-on posture when he cited possible summer stimulus measures to combat a potential recession in England. Other focal points impacting today's trade include strengthening in the dollar, a downturn in oil, and the outperformance of the heavily-weighted industrial (+1.6%) and financial (+1.3%) sectors. Currently, the Dow Jones Industrial Average (+1.1%) trades ahead of the S&P 500 (+1.0%) and the Nasdaq Composite (+1.0%).

Equity indices began their day on a flat note as investors considered the breadth of the recent rebound in equity markets.  The benchmark index tumbled a combined 5.3% on Friday and Monday, responding to the surprise outcome in the United Kingdom's referendum on EU membership. However, the S&P 500 recouped 3.5% of that loss over the past two trading days. Additionally, flat trade in global bourses failed to illicit a bullish response as investors eyed a downturn in crude oil.

The major averages gained traction after the first hour of trade as the consumer staples sector (+1.8%) rallied to the top of the leaderboard. The broader group received a bid when reports indicated that Mondelez International (MDLZ 44.43, +1.46) submitted a takeover offer for Hershey Foods (HSY 111.87, +14.73). The benchmark index reclaimed its 50-day simple moving average (2075.99) shortly thereafter.

Equities extended their gains late in the morning when BoE Governor Mark Carney stated that the bank was ready to provide further stimulus in the wake of Thursday's surprise Brexit vote. Not to be outdone, the ECB also helped rouse markets when it was reported that the central bank may loosen its QE purchasing rules. A shrinking pool of eligible debt is the likely reason for the move. Ten sectors trade in the green with consumer staples (+1.9%), industrials (+1.6%), and utilities (+1.4%) leading the pack. The remaining gainers sport upticks between 0.6% (consumer discretionary) and 1.3% (telecom services).

The economically-sensitive financial sector (+1.3%) trades ahead of the benchmark index as participants examine results from the Federal Reserve's supervisory stress test. The response has been mixed despite the fact that 30 out of the 33 institutions were approved to increase their respective capital return programs. In the group, Morgan Stanley (MS 25.92, +0.69) has jumped 2.8% after announcing a share repurchase of $3.5 billion and a dividend increase to $0.20 per share. However, the name received only conditional approval on the grounds that it resubmits its capital plan.

The consumer discretionary space (+0.6%) trades behind the broader market as travel and leisure names, retailers, and restaurants trail. The SPDR S&P Retail ETF (XRT 41.81, +0.20) has ticked higher by 0.2% amid weakness in specialty retailers. Tractor Supply (TSCO 92.23, -2.94) has fallen 2.9% after the company issued an earnings warning. Separately, Darden Restaurants (DRI 63.93, -2.03) has lost 3.1% after lowering its full-year earning guidance below consensus.

The U.S. Dollar Index (96.22, +0.45) trades off its session high as the buck gains against the euro and the pound. The single currency has lost 0.6% against the greenback (1.1062) while the pound/dollar pair has fallen 1.2% to 1.3272.

The Treasury complex trades higher as the yield on the 10-yr note slides three basis points to 1.49%.

Today's economic data included weekly initial claims and Chicago PMI for June:  

  • The encouraging trend for initial jobless claims persists with claims for the week ending June 25 increasing by 10,000 to 268,000 (Briefing.com consensus 265,000).
    • Weekly initial claims have been running below 300,000 for 69 consecutive weeks.
    • This is the longest streak below 300,000 for initial claims since 1973!
    • The latest initial claims reading left the four-week moving average for initial claims unchanged at 266,750.
  • Continuing claims for the week ending June 18, meanwhile, decreased by 20,000 to 2.120 million.
    • The four-week moving average for this series fell by 13,000 to 2.134 million, which is the lowest since November 11, 2000.
  • The Chicago Purchasing Managers Index (PMI) sprung out of its contraction, surging to 56.8 in June from 49.3 in May.
    • The June reading is the highest reading since January 2015 and was well above the Briefing.com consensus estimate of 50.8.
    • The headline strength in June was nice to see, yet it most likely reflects inventory rebuilding after an extended period of destocking in an environment of sluggish demand.
    • One month here does not a trend make and the providers of the report implied as much, pointing out that the business barometer needs to be viewed in the context of the weakness seen in April and May.
    • On that note, it is worth pointing out that the three-month average of 52.2 for the second quarter is roughly flat with the three-month average for the first quarter. The line between contraction and expansion is 50.0.
    • There was a huge surge in new orders, which drove the strength in June. The New Orders Index spiked from 48.8 to 63.2.
    • Similarly, there was a big jump in the Production Index from 47.4 to 56.3, which also proved to be a driving factor behind the headline surprise.
    • Order backlogs reportedly rose to their highest level since March 2011, breaking a 16-month streak of below 50 readings.
    • The Inventory Index ended a seven month run in contraction and saw a double-digit increase from the 6 1/2 year low recorded in May
    • Strikingly, despite the big jump in new orders and order backlogs, there wasn't a pickup in employment.
    • That could be seen in the Employment Index, which fell from 48.3 to 45.0. The Prices Paid Index was little changed at 55.7 versus 56.5 in May.

12:30 pm:

[BRIEFING.COM] The major averages hover near fresh session highs as the Dow Jones Industrial Average (+1.0%) leads the Nasdaq Composite (+0.9%) and the S&P 500 (+0.9%).

The consumer discretionary space (+0.2%) trades behind the benchmark index as cruise ship operators, retailers, and restaurant names lag the broader sector. In the group, Carnival (CCL 43.90, - 0.56) has fallen 1.3%, trimming its post-earnings gain to 0.6%. The company reported above-consensus results on Tuesday. The retail group trades behind the broader sector, evidenced by the 0.1% gain in the SPDR S&P Retail ETF (XRT 41.70, +0.09). Specialty retailer Tractor Supply (TSCO 91.56, -3.60) has declined by 3.7% after warning that its fiscal-year 2016 and second-quarter earnings may come in below analysts' estimates.

In the restaurant group, Darden Restaurants (DRI 63.72, -2.22) underperforms after reporting a mixed quarter and lowering its full-year earning guidance below consensus. However, the company did raise its dividend 12.0% to $0.50 per share.

WTI crude trades lower by 2.4% ($48.71/bbl, -$1.17) as a rally in the greenback weighs on the dollar-denominated commodity. Elsewhere, gold trades lower by 0.4% (1,322.30/ozt, -$4.60).

12:00 pm:

[BRIEFING.COM] The S&P 500 (+0.6%) has ticked higher since the last update, trading two points off its best level of the day.

All ten sectors remain in the green with consumer staples (+1.3%), industrials (+1.1%), and utilities (+0.9%) leading the way. Conversely, consumer discretionary (+0.2%), energy (+0.2%), and health care (+0.4%) show the smallest upticks.

The high-beta chipmakers demonstrate relative strength evidenced by the 0.9% gain in the PHLX Semiconductor Index. In the group, Micron (MU 13.58, +0.39) outperforms ahead of this evening's earnings report. Conversely, Qualcomm (QCOM 52.89, -0.65) rounds out the price-weighted index. The stock continues to see pressure as bearish commentary from Bernstein weighs. The semi index has gained 1.5% on a weekly basis, compared to a gain of 2.2% in the benchmark index.

In the broader technology sector (+0.6%), video game names outperform as Electronic Arts (EA 75.57, +1.83) and ActivisionBlizzard (ATVI 39.49, +1.47) climb 2.5% and 3.9%, respectively.

The Treasury complex continues to inch higher as the yield on the 10-yr note slides five basis points to 1.46%.

11:30 am:

[BRIEFING.COM] The major indices have pulled back from fresh session highs as investors weigh commentary from Governor Carney of the Bank of England. At this juncture, the Nasdaq Composite (+0.6%) trades neck-and-neck with the S&P 500 (+0.6%).

Governor Carney recently attempted to calm markets in England, stating that the central bank will be ready with monetary policy measures over the summer.

In the consumer staples sector (+1.3%), food product names demonstrate relative strength, trading higher in sympathy with Hershey Foods (HSY 113.30, +16.16). The stock has spiked 16.6% after reports indicated that Mondelez International (MDLZ 43.54, +0.57) has submitted a takeover bid on the name. The broader staples sector sports a gain of 2.8% this week, leading the remaining groups.

The U.S. Dollar Index (95.82, +0.05) pulled back in recent trade after the pound plunged to a new session low against the greenback. Cable trades lower by 1.1% (1.3279) after notching a session low at 1.3246. Separately, the dollar has lost 0.2% against the safe haven yen (102.61).

11:05 am:

[BRIEFING.COM] The major averages have notched new session highs in recent action as the S&P 500 (+0.5%) clears resistance near the 2076/2077 price level. The benchmark index has also been able to climb above its 50-day simple moving average (2075.99).

The economically-sensitive financial sector (+0.2%) trades behind the broader market as investors weigh results from the Federal Reserve's supervisory stress test. The central bank approved 30 out of the 33 capital plans that it reviewed, allowing expansions to the group's capital return programs. However, the response has been mixed as investors eye an already strong weekly reversal in the group. The SPDR S&P Bank ETF (KBE 30.11, +0.22) has jumped 6.8% since Monday's close. Separately, Dow component American Express (AXP 59.22, -0.41) underperforms, trading lower in sympathy with Visa (V 75.37, -1.38) and MasterCard (MA 90.76, -1.36). The two names have been pressured after reports indicated that a federal appeals court voided a $7.25 billion antitrust settlement involving the two names and millions of retailers.

The Treasury complex trades at a session high as the yield on the 10-yr note slips three basis points to 1.48%. For the month, the benchmark yield has fallen 37 basis points.

10:30 am: [BRIEFING.COM]

  • The dollar index inches upward as morning pit trading gets underway, up +0.08% around the 95.85 level
    • Commodities, as measured by the Bloomberg Commodity Index, are down -0.8% at 88.61
  • Crude oil sees a notable morning drop after briefly heading north of the $50/barrel handle yesterday
    • August crude oil futures are currently down $1.08 (-2.2%) at $48.80/barrel
    • Factors being discussed as impacting oil this morning:
      • Reports discussing price-negative impact of increased Nigerian oil supply due to a lack of recent attacks there.
        • Some are discussing a Goldman Sachs note suggesting downside risk to their $50 oil price target, as a result of the Nigerian situation.
      • Continued uncertainty about the Brexit situation and economic impact of it, with Boris Johnson announcing this morning that he will not run for UK Prime Minister, as many had expected.
    • Monthly IEA data is scheduled to be released on July 13th
    • Baker Hughes rig count data will be released tomorrow at 1 pm ET
  • Natural gas holds onto its initial morning gains after the release of EIA storage data which showed a smaller-than-expected build compared to Consensus
    • August natural gas futures are currently up $0.03 (+1.4%) at $2.90/MMBtu
    • Prior to the release of EIA inventory data, natural gas futures were up $0.04 (+1.5%) at $2.91/MMBtu
    • Natural gas inventory showed a build of +37 bcf vs expectations for inventory to be a build of approximately +48 bcf.
    • Working gas in storage was 3,140 Bcf as of Friday, June 24, 2016, according to EIA estimates.
    • Stocks were 582 Bcf higher than last year at this time and 637 Bcf above the five-year average of 2,503 Bcf.
    • At 3,140 Bcf, total working gas is above the five-year historical range.
  • In precious metals, gold consolidates near lows of the session as the dollar index inches modestly upward in morning pit trading
    • August gold futures are down $7.80 (-0.6%) at $1319.10/oz
  • Silver rallies for the third consecutive session, hitting 21 month highs despite dollar weakness
    • September silver futures are up $0.09 (+0.5%) at $18.50/oz
  • Base metal copper gives up half of yesterday's gains in morning pit trading
    • September copper futures are down $0.01 (-0.5%) at $2.17/lb

10:05 am:

[BRIEFING.COM] The major averages continue to tread water near their flat lines as the Nasdaq Composite (-0.1%) and the S&P 500 (UNCH) slip into negative territory. 

Five sectors trade in the green with consumer staples (+0.4%) and industrials (+0.2%) leading the rest of the pack. On the flipside, energy (-0.4%), health care (-0.2%), and consumer discretionary (-0.2%) round out the board.

The high-beta chipmakers trade on a flat note as the PHLX Semiconductor Index gains 0.2%. In the group, Qualcomm (QCOM 52.76, -0.78) trades lower by 1.5% after being downgraded to "Market Perform" from "Outperform" at Bernstein. The firm cited high expectations regarding the September quarter's estimates.

The U.S. Dollar Index (95.76, -0.02) has pulled back as the euro, and Canadian dollar each sport losses against the buck. The single currency has slipped 0.1% against the greenback (1.1111). Separately, the dollar/Canadian dollar trades higher by 0.4% (1.2982) amid continued weakness in crude oil.

9:50 am:

[BRIEFING.COM] As expected, the stock market began the day on a flat note as the Dow Jones Industrial Average (+0.2%) leads the Nasdaq Composite (+0.1%) and the S&P 500 (+0.1%).

Nine sectors trade in the green with industrials (+0.4%), technology (+0.3%), and consumer staples (+0.3%) pacing the advance. The remaining gainers sport upticks between 0.1% (financials) and 0.2% (consumer discretionary). On the flipside, telecom services (UNCH) sports the only loss.

In the consumer staples sector (+0.3%), Anheuser-Busch InBev (BUD 129.67, +3.37) demonstrates relative strength after reports indicated that the company received regulatory clearance in South Africa regarding its merger with SABMiller (SBMRY 58.62, -0.10).

The industrial sector (+0.4%) tops the leaderboard as Dow component General Electric (GE 30.86, +0.31) leads the price-weighted index.

On the economic front, the just released Chicago Purchasing Managers Index for June rose to 56.8 from 49.3 in May. The June reading was above the Briefing.com consensus estimate, which was pegged at 50.8.

WTI crude trades lower by 2.3% ($48.76/bbl; -$1.12) while gold has ticked lower by 0.3% to $1,322.40/ozt.

9:19 am: [BRIEFING.COM] S&P futures vs fair value: +6.50. Nasdaq futures vs fair value: +10.60.

The stock market is on track for a modestly higher open as the S&P 500 futures trade seven points above fair value.

Equity futures have inched forward in recent action as investors weigh positive results from the Federal Reserve's supervisory stress test against a downturn in crude oil and ongoing political uncertainty in the United Kingdom. Last evening the Federal Reserve released results from its Comprehensive Capital Analysis and Review (CCAR), which showed that 30 out of 33 banks had their capital plans approved by the central bank. As a result, the banking sub-group announced a mass of share repurchase programs and dividend increases.

European bourses tread water near their flat lines, attempting to keep the recent risk rebound alive. Regional indices pulled back earlier in the morning, corresponding to reports that Boris Johnson would not run for prime minister this fall. The news came as a surprise as the country looks ahead to invoking Article 50 of the Lisbon Treaty in September, which would begin negotiations regarding its exit from the EU. For its part, WTI crude trades lower by 2.0% ($48.88/bbl; -$1.00), succumbing to some month/quarter-end selling pressure.

In company specific news, Pier 1 Imports (PIR 5.11, -0.33) has lost 6.1% in pre-market trading after missing bottom-line estimates and disappointing investors with its outlook. Morgan Stanley (MS 25.47, +0.24) trades higher by 1.0% after announcing a share repurchase of $3.5 billion and a dividend increase to $0.20 per share. However, the company must resubmit its capital plan after the Fed identified that the plan does not adequately reflect risks and vulnerabilities specific to the firm.

Today's economic data will be capped off with the release of Chicago PMI for June (Briefing.com consensus 50.8), which will cross the wires at 9:45 ET.

8:55 am: [BRIEFING.COM] S&P futures vs fair value: +5.30. Nasdaq futures vs fair value: +7.60.

Equity futures have inched higher in recent trade as the S&P 500 futures trade five points above fair value. 

Equity indices in the Asia-Pacific region ended Thursday on a mostly higher note while the yen briefly rallied to 102.50 against the dollar before giving up the entire overnight gain. Equities in China struggled to keep up with other regional indices after the country's Beige Book conveyed some cautious comments from Finance Minister Lou Jiwei, who said the government is struggling to meet annual fiscal targets.

  • In economic data:
    • Japan's May Housing Starts +9.8% year-over-year (consensus 4.8%; last 9.0%) and May Construction Orders +34.5% year-over-year (last -16.9%). May Industrial Production -2.3% month-over-month (expected -0.1%; last 0.5%)
    • Australia's May Housing Credit +0.5% (previous 0.4%) and May Private Sector Credit +0.4% month-over-month (expected 0.5%; last 0.5%)
    • New Zealand's June ANZ Business Confidence 20.2 (last 11.3)
    • South Korea's May Industrial Production +4.3% year-over-year (consensus 0.4%; last -2.6%) and Retail Sales +0.6% month-over-month (last -0.5%)

---Equity Markets---

  • Japan's Nikkei added 0.1% with energy (+1.1%) and industrials (+1.1%) outperforming while health care (-1.2%) and communications (-0.4%) lagged. DeNA, Haseko, Trend Micro, Nitto Denko, Advantest, TOTO, and Mitsubishi Logistics gained between 1.9% and 4.8%. On the downside, J Front Retailing, Mazda Motor, Toyota Motor, and Nissan Motor lost between 1.3% and 2.1%.
  • Hong Kong's Hang Seng rallied 1.8% with property and consumer names showing relative strength. China Overseas, China Resources Land, SHK Properties, and Hang Lung Properties gained between 2.5% and 6.3% while Li & Fung, Galaxy Entertainment, and Belle International posted gains between 2.5% and 2.8%.
  • China's Shanghai Composite shed 0.1%. Sino-Platinum Metals, Tibet Tourism, Shanghai Zhngyida, Irico Display Devices, and Chengtun Mining Group lost between 3.4% and 7.8%.

Major European indices trade on a flat note. Recent media reports indicate Boris Johnson will not run for British prime minister, meaning the search for a leader who will invoke article 50 of the Lisbon Treaty will continue for the foreseeable future. The British pound saw some overnight weakness against the dollar, but the pound is now up 0.3% at 1.3473.

  • In economic data:
    • Eurozone June CPI +0.1% year-over-year (consensus 0.0%; last -0.1%). Core CPI +0.9% year-over-year (consensus 0.8%; last 0.8%)
    • Germany's June Unemployment Change -6,000 (expected -5,000; last -10,000) and Unemployment Rate held at 6.1%, as expected. May Retail Sales +0.9% month-over-month (expected 0.7%; last -0.3%); +2.6% year-over-year (consensus 3.0%; last 2.7%)
    • UK's Q1 GDP +0.4% quarter-over-quarter, as expected; +2.0% year-over-year, as expected. Q1 Current Account deficit narrowed to GBP32.60 billion from GBP34.00 billion (expected deficit of GBP27.10 billion)
    • France's May Consumer Spending -0.7% month-over-month (expected -0.1%; last -0.1%). June CPI +0.2% month-over-month (expected 0.1%; last 0.4%) and May PPI +0.3% month-over-month (last -0.5%)
    • Italy's June CPI +0.1% month-over-month (expected 0.3%; last 0.3%); -0.4% year-over-year (consensus -0.2%; last -0.3%)

---Equity Markets---

  • Germany's DAX has slipped 0.1% with utilities showing relative strength. RWE, E.On, and Deutsche Telekom are up between 6.2% and 9.7%. Financials are under pressure with Deutsche Bank down 2.3% and Commerzbank lower by 1.3%.
  • UK's FTSE trades lower by 0.1% with consumer names like Tesco and Burberry both up near 6.5% while financials Standard Life, Prudential, Barclays, and Aberdeen Asset Management show gains between 2.2% and 5.0%. On the downside, homebuilders Persimmon and Taylor Wimpey are both down near 3.5%.
  • France's CAC has climbed 0.3%. Vivendi, Safran, Vinci, Pernod Ricard, and Danone have added between 1.0% and 2.4% while financials Credit Agricole, Societe Generale, and BNP Paribas are up between 0.2% and 0.6%.

8:33 am: [BRIEFING.COM] S&P futures vs fair value: +4.30. Nasdaq futures vs fair value: +5.00.

Futures have ticked higher in recent action with the S&P 500 futures trading four points above fair value.

The latest weekly initial jobless claims count totaled 268,000 while the Briefing.com consensus expected a reading of 265,000. Today's tally was above the revised prior week's count of 258,000 (from 259,000). As for continuing claims, they fell to 2.120 million from 2.140 million.

The U.S. Dollar Index (95.83, +0.06) has crossed its flat line as commodity currencies and the euro show losses against the buck. The dollar/Canadian dollar pair trades higher by 0.1% (1.2950) after ticking off the 1.2920 price level overnight. Separately, single currency has lost 0.3% against the greenback (1.1088).

8:10 am: [BRIEFING.COM] S&P futures vs fair value: +2.30. Nasdaq futures vs fair value: +2.80.

U.S. equity futures trade near their flat lines as the S&P 500 futures hover two points above fair value. Futures have pulled back in recent action as investors respond to a similar move in European bourses. There is no explicit catalyst for the pullback, but reports indicated earlier that Boris Johnson will not be running for British Prime Minister. The news could be adding to uncertainty as the country looks to invoke Article 50 of the Lisbon Treaty in September. On the home front, largely positive results from the Federal Reserve's supervisory stress test have boosted bank stocks. The group had the bulk of their capital return programs approved, leading to increased dividends and share repurchase programs. For its part, WTI crude trades lower by 1.8% ($48.98, -$0.90), responding to cautious remarks from Goldman Sachs. 

The Treasury complex trades on a higher note as the yield on the 10-yr note slips two basis points to 1.50%.

On the economic front, data will include weekly initial claims (Briefing.com consensus 265k) and Chicago PMI for June (Briefing.com consensus 50.8), which will be released at 8:30 ET and 9:45 ET, respectively.

In U.S. corporate news of note:

  • Darden Restaurants (DRI 63.20, -2.76): -4.1% after beating bottom-line estimates for the quarter and lowering its FY16 guidance below-consensus 
  • Starz (STRZA 33.50, +5.25): +18.6% following reports that the company will be acquired by Lions Gate Entertainment (LGF 22.97, +2.03) for $32.73 per share 
  • Citigroup (C 42.60, +0.48): +1.1% after the Federal Reserve did not object to its capital plan: raising its dividend to $0.16 per share and adding $8.6 billion to its stock repurchase program
  • Tractor Supply (TSCO 91.29, -3.88): -4.1% following the company lowering its FY16 and Q2 guidance below-consensus

Reviewing overnight developments:

  • Asia-Pacific indices ended Thursday mostly higher with Hong Kong's Hang Seng +1.8%, Japan's Nikkei +0.1%, and China's Shanghai Composite -0.1%.
    • In economic data:
      • Japan's May Housing Starts +9.8% year-over-year (consensus 4.8%; last 9.0%) and May Construction Orders +34.5% year-over-year (last -16.9%). May Industrial Production -2.3% month-over-month (expected -0.1%; last 0.5%)
      • Australia's May Housing Credit +0.5% (previous 0.4%) and May Private Sector Credit +0.4% month-over-month (expected 0.5%; last 0.5%)
      • New Zealand's June ANZ Business Confidence 20.2 (last 11.3)
      • South Korea's May Industrial Production +4.3% year-over-year (consensus 0.4%; last -2.6%) and Retail Sales +0.6% month-over-month (last -0.5%)
    • In news:
      • Equities in China struggled to keep up with other regional indices after the country's Beige Book conveyed some cautious comments from Finance Minister Lou Jiwei.
      • Minister  Lou Jiwei commented that the government is struggling to meet annual fiscal targets.
      • The yen briefly rallied to 102.50 against the dollar before giving up the entire overnight gain.
  • European bourses trade on a flat note with France's CAC +0.2%, the U.K.'s FTSE -0.1%, and Germany's DAX -0.2%. 
    • In economic data:
      • Eurozone June CPI +0.1% year-over-year (consensus 0.0%; last -0.1%). Core CPI +0.9% year-over-year (consensus 0.8%; last 0.8%)
      • Germany's June Unemployment Change -6,000 (expected -5,000; last -10,000) and Unemployment Rate held at 6.1%, as expected. May Retail Sales +0.9% month-over-month (expected 0.7%; last -0.3%); +2.6% year-over-year (consensus 3.0%; last 2.7%)
      • UK's Q1 GDP +0.4% quarter-over-quarter, as expected; +2.0% year-over-year, as expected. Q1 Current Account deficit narrowed to GBP32.60 billion from GBP34.00 billion (expected deficit of GBP27.10 billion)
      • France's May Consumer Spending -0.7% month-over-month (expected -0.1%; last -0.1%). June CPI +0.2% month-over-month (expected 0.1%; last 0.4%) and May PPI +0.3% month-over-month (last -0.5%)
      • Italy's June CPI +0.1% month-over-month (expected 0.3%; last 0.3%); -0.4% year-over-year (consensus -0.2%; last -0.3%)
    • In news: 
      • Recent media reports indicated that Boris Johnson will not run for British prime minister.
      • The search for a leader who will invoke article 50 of the Lisbon Treaty will continue for the foreseeable future.
      • The British pound saw some overnight weakness against the dollar, but the pound now trades flat at 1.3428.

5:54 am: [BRIEFING.COM] S&P futures vs fair value: +10.50. Nasdaq futures vs fair value: +18.00.

5:54 am: [BRIEFING.COM] Nikkei...15576...+9.10...+0.10%.  Hang Seng...20794...+358.30...+1.80%.

5:54 am: [BRIEFING.COM] FTSE...6381.35...+21.30...+0.30%.  DAX...9626.54...+14.30...+0.20%.

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