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Stock futures are mixed, currently trading around their best levels of the morning, though are only higher by a few points, while European markets edge higher. Slumping oil continues to be a drag on energy stocks, with crude down around 2% this morning after slipping yesterday. Markets await a handful of earnings reports as well as pending home sales and manufacturing data later today. With one session left to go of the month, the Nasdaq has been the best-performing major index for May, up 2.6%, followed by a 1.2% gain for the S&P 500. Both indexes are set for their best monthly percentage gains since February 2017. The Dow industrials is up 0.4%, its best monthly performance since March.
Stocks were down slightly on Tuesday, as energy and financial shares weighed on markets, while the seven-session winning streak for the Nasdaq Composite came to an end. However, the Nasdaq 100 closed higher amid another record setting day for several large cap techs, including AMZN as it topped the $1,000 per share level for the first time along with 52-week highs for several semiconductor stocks. Bonds gained as yields slipped, with the 10-yr trading to 2.21%, its lowest on a closing basis since the tax-day low of 2.168% on April 18th. Tuesday was also a busy day for Fed speakers as Dallas Federal Reserve President Robert Kaplan said that “some correction” in the stock market could be healthy for sustaining the economic expansion for longer. Fed Gov Lael Brainard indicated the possibility of an imminent rate hike given the strength in the economy, while Fed Reserve Bank of St. Louis President James Bullard said that Washington will need to deliver on these policy expectations.
In Asian markets, The Nikkei Index fell 27 points to settle at 19,650, the Shanghai Index rose 7 points to settle at 3,117, and the Hang Seng Index fell -40 points to close at 25,660. In Europe, the German DAX is up about 0.5% at 12,660, while the FTSE 100 is up around 30 points at 7,560. China May Manufacturing PMI at 51.2 vs. est. 51.0 according to the National Bureau of Statistics and China Federation of Logistics and Purchasing.
Market Closing Prices Yesterday
· The S&P 500 Index slipped -2.91 points, or 0.12%, to 2,412.91
· The Dow Jones Industrial Average fell -50.81 points, or 0.24%, to 21,029.47
· The Nasdaq Composite dropped -7.00 points, or 0.11%, to 6,203.19
· The Russell 2000 Index declined -11.05 points, or 0.80% to 1,371.19
Events Calendar for Today
· 7:00 AM ET MBA Mortgage Applications Data
· 8:00 AM ET Fed’s Kaplan speaks in New York
· 9:45 AM ET Chicago PMI for May…est. 57.0
· 10:00 AM ET Pending Home Sales MoM for April…est. 0.5%
· 10:30 AM ET Weekly DOE Inventory Data
· 2:00 PM ET Fed Beige Book released
· 8:10 PM ET Fed’s Williams speaks in Seoul Korea
· Earnings Before the Open: ADI, CMCO, DAKT, JILL, KORS, ROLL, VRA
· Earnings After the Close: BOX, CSWC, HPE, OLLI, PANW, SMTC, XPLR
Other Key Events:
· Deutsche Bank Global Financial Services Conference, 5/30-5/31, in NY
· KeyBanc Industrial, Auto, Transport Conference, 5/30-6/1, in Boston, MA
· Bernstein 33rd Annual Strategic Decisions Conference, 5/31-6/2, in NY
· Cowen and Company 46th Annual Technology, Media & Telecom Conference, 5/31-6/1, in NY
· Former national security adviser Mike Flynn will cooperate with a subpoena and hand over business records sought by a Senate committee investigating the Trump campaign’s ties with Russia, the Wall Street Journal reported late Tuesday.
· A bomb was detonated in the heart of Kabul near foreign embassies and military bases, killing at least 80 people, and injuring more than 300
· YouGov research reported by The Times shows the governing Conservatives could be in line to lose 20 seats and the opposition Labour Party add 28, leading to a hung parliament with no clear majority — and a chance for Labour’s Jeremy Corbyn to become leader
· China May Manufacturing PMI at 51.2 vs. est. 51.0 according to the National Bureau of Statistics and China Federation of Logistics and Purchasing
· The European Union’s statistics agency said consumer prices were 1.4% higher in May than a year earlier, a decline in the inflation rate from 1.9% in April, when it was in line with the ECB’s target.
· The eurozone’s annual rate of inflation fell more sharply than expected in May despite a drop in the jobless rate to a seven-year low, a combination that is likely to reinforce the European Central Bank’s reluctance to quickly unwind its stimulus programs
Sector News Breakdown
· Quanex Building (NX) Q2 EPS 11c/$209.13M vs. est. 5c/$205,5M; reaffirms 2017 guidance
· J Jill (JILL) raises year EPS view to 80c-84c vs. est. 79c
· Hertz Global (HTZ) to offer $1B in senior second priority secured notes
· DCP Midstream, LP (DCP) announced an additional large-scale expansion of the Sand Hills natural gas liquids (NGL) pipeline, with plans to initially spend $105 million towards long-lead equipment and right-of-way
· EnerSys (ENS) Q4 EPS $1.28/$626.8M vs. est. $1.26/$622.66M; cuts Q1 adjusted EPS view to $1.10-$1.14 from $1.21-$1.25 (est. $1.25)
· Apollo Commercial (ARI) files to sell 12M shares of common stock
· James River (JRVR) files to sell 4.25M shares of common stock for holders
· National Bank of Canada (NA.CN) Q2 EPS C$1.30 vs. est. C$1.26; Q2 common equity Tier 1 ratio 10.8%, return on equity 17.9%
· The Federal Reserve fined Deutsche Bank (DB) $41 million over anti-money laundering deficiencies in the bank’s U.S. operations.
· Mallinckrodt Plc (MNK) is exploring a sale of its generic drug unit, in a deal that could fetch as much as $2 billion and help pivot the specialty pharmaceutical maker toward higher-margin branded drugs – Reuters https://goo.gl/7k5UOU
· Exact Sciences (EXAS) rose 11% after UnitedHealth (UNH) said it will begin covering virtual colonoscopy tests such as EXAS’s Cologuard, effective July 1.
· Akari Therapeutics (AKTX) announced the resignation of its CEO
· AngioDynamics (ANGO) alleges C.R. Bard (BCR) tying sales of its tip location systems to its line of peripherally inserted central catheters (PICCs), violates federal antitrust laws, in lawsuit filed in N.Y. district court
· The FDA approved first generic copies of Lilly’s (LLY) Strattera to treat ADHD in pediatric and adult patients, according to email from the agency; generics made by Apotex, Teva
· Intuitive Surgical (ISRG) said its new da Vinci X Surgical System received FDA clearance in the United States. The da Vinci X System will provide surgeons and hospitals with access to some of the most advanced robotic-assisted surgery technology at a lower cost
Industrials & Materials
· Kadant Inc. (KAI) has entered into a definitive agreement to acquire the forest products business of NII FPG Company for $173 million in cash
Technology, Media & Telecom
· Analog Devices (ADI) is expected to report earnings later this morning
· VMWare (VMW) upgraded to outperform at Baird