Overnight Markets And News

Dec E-mini S&Ps (ESZ18 +0.79%) this morning are up +0.80% and European stocks recovered from a 1-3/4 year low and are up +0.81%. Stronger than expected Q1 quarterly earnings results from Microsoft have pushed the stock up 5% in pre-market trading to lead a rally in technology stocks that is pushing the overall market higher. A rally in automakers lifted European stocks out of negative territory as Peugeot SA jumped 6% to lead auto stocks higher when the carmaker said plants are running “at full capacity” as demand remains strong for new models. Weaker than expected German Oct IFO business confidence fueled a rally in German bunds as the 10-year bund yield fell to a 1-1/2 month low of 0.380%. Trading activity in Europe was muted ahead of the results of the ECB meeting and press conference from ECB President Draghi later today. Asian stocks settled mostly lower: Japan -3.72%, Hong Kong -1.01%, China +0.02%, Taiwan -2.44%, Australia -2.83%, Singapore -0.63%, South Korea -1.71%, India -1.01%. Japan’s Nikkei Stock Index tumbled to a 6-1/2 month low due to a sell-off in technology stocks and the plunge in U.S. equities on Wednesday. Chinese equity markets stabilized and actually recovered early losses and closed slightly higher on reports that state-sponsored funds were buying stocks in the last hour of trade. Chinese equities rebounded even after the yuan fell to a new 1-3/4 year low of 6.9558 against the dollar.

The dollar index (DXY00 -0.10%) is down -0.10%. EUR/USD (^EURUSD +0.14%) is up +0.09%. USD/JPY (^USDJPY +0.08%) is up +0.02%.

Dec 10-year T-note prices (ZNZ18 -0-015) are down -1.5 ticks.

The German Oct IFO business climate fell -0.9 to 102.8, weaker than expectations of -0.5 to 103.2.

Japan Sep PPI services rose +1.2% y/y, right on expectations.

U.S. Stock Preview

Key U.S. news today includes: (1) weekly initial unemployment claims (expected +5,000 to 215,000, previous -5,000 to 210,000) and continuing claims (expected +4,000 to 1.644 million, previous -13,000 to 1.640 million), (2) Sep durable goods orders (expected -1.5% and +0.4% ex transportation, Aug +4.4% and unch ex transportation), (3) Sep wholesale inventories (expected +0.5%, Aug +1.0%) and Sep retail inventories (Aug +0.7%), (4) Sep pending home sales (expected unch m/m and -2.6% y/y, Aug -1.8% m/m and -2.5% y/y), (5) Oct Kansas City Fed manufacturing activity (expected +1 to 14, Sep -1 to 13), (6) Fed Vice Chairman Richard Clarida speaks about his outlook for the U.S. economy and monetary policy at an event in Washington, D.C., (7) Treasury auctions $31 billion of 7-year T-notes, (8) Cleveland Fed President Loretta Mester (voter) speaks to the Money Marketeers of NYU.