OVERNIGHT MARKETS AND NEWS
June E-mini S&Ps (ESM14Â -0.19%) this morning are down -0.36% and European stocks are down -0.75%. AstraZeneca is down 13% in pre-market trading and is leading health-care stocks lower after it rejected Pfizer’s upward revised $117 billion bid for the company as too low. Deutsche Bank is down 2% after Germany’s biggest bank sold about 60 million shares to the Qatari royal family as it announced plans to raise 8 billion euros in its second-largest capital increase. Asian stocks closed mixed: Japan -0.64%, Hong Kong -0.04%, China -1.43%, Taiwan +0.13%, Australia -1.28%, Singapore unch, South Korea +0.17%, India +1.00%. India’s Sensex Stock Index rose to another record high on positive carry-over on speculation Narendra Modi’s incoming government will take steps to revive India’s economy. China’s Shanghai stock index fell to a 1-3/4 month low on concern over China’s economy after China Apr new-home prices rose in April in the fewest cities in 1-1/2 years. Commodity prices are mixed. Jun crude oil (CLM14Â +0.73%) is up +0.58% at a 3-1/2 week high. Jun gasoline (RBM14Â +0.49%) is up +0.66% at a 2-week high. Jun gold (GCM14Â +0.68%) is up +0.66%. July copper (HGN14Â +0.91%) is up +0.71% at a 2-1/4 month high. Agriculture prices are mixed. The dollar index (DXY00Â -0.12%) is down -0.11%. EUR/USD (^EURUSD) is up +0.18%. USD/JPY (^USDJPY) is down -0.33% at a 3-1/2 month low as a slide in stocks boost the safe-haven demand for the yen. June T-note prices (ZNM14Â -0.01%) are up +1 tick.
China Apr new-home prices rose in 44 of the 70 cities tracked by the government, the fewest in 1-1/2 years and a sign that the slowdown in China’s housing market is spreading.
Der Spiegel reported that ECB Chief Economist Peter Praet will recommend that the ECB cut the 2-week refinancing rate by 10 bp to 0.15% and cut the overnight deposit rate to a negative -0.10% when the central bank next meets on Jun 5.
UK May Rightmove house prices rose +3.6% m/m and +8.9% y/y with the +8.9% y/y increase the largest annual gain in 6-1/2 years.
EUR Mar construction output fell -0.6% m/m and rose +5.2% y/y, weaker than Feb’s upward revised +0.4% m/m and +7.5% y/y.
Japan Mar machine orders surged +19.1% m/m, well above expectations of +5.8% m/m and the largest monthly increase in 17 years. On a year-over-year basis, machine orders rose +16.1% y/y over three time expectations of +4.3% y/y.
U.S. STOCK PREVIEW
The markets this week will focus on a heavy schedule of speaking engagements by Fed officials, the minutes of the April 29-30 FOMC meeting on Wednesday, and the Treasury’s sale of $13 billion of 10-year TIPS on Thursday. There are 4 of the Russell 2000 companies that report earnings today: Campbell Soup (consensus $0.59), Valspar (1.04), Urban Outfitters (0.27), Hertz Global Holdings (0.09).
