Morning Call For Wednesday, August 15

Overnight Markets And News

Sep E-mini S&Ps (ESU18 -0.61%) this morning are down -0.55% and European stocks are down -0.77% as global stocks and commodities slide on concern the China/U.S. trade spat and financial turmoil in Turkey will lead to slower economic growth throughout the world. Weakness in mining stocks, energy companies and raw-material producers are leading losses in the overall market as Sep COMEX copper (HGU18 -2.72%) plunges -2.54% to a 13-1/2 month low, Dec COMEX gold (GCZ18 -0.71%) drops -0.69% to a 1-1/2 year low and Sep WTI crude oil (CLU18 -0.97%) falls -1.31%. Crude oil prices were also weighed down after API data late Tuesday afternoon showed U.S. crude inventories rose +3.66 million bbl last week. The Turkish lira rose for a second day and climbed more than 3% against the dollar after Turkey’s banking regulator limited the amount of currency swap transactions banks can participate in by half to 25% of shareholder equity. Asian stocks settled mostly lower: Japan -0.68%, Hong Kong -1.55%, China -2.08%, Taiwan -0.99%, Australia +0.47%, Singapore -0.27%, South Korea and India closed for holiday. China’s Shanghai Composite fell to a 1-week low after the yuan tumbled to a 17-month low of 6.9137 per dollar on concern the ongoing China/U.S. trade war will slow China’s economic growth.

The dollar index (DXY00 +0.16%) is up +0.15% at a 13-1/2 month high. EUR/USD (^EURUSD -0.24%) is down -0.26% at a 13-1/4 month low. USD/JPY (^USDJPY -0.13%) is down -0.03%.

Sep 10-year T-note prices (ZNU18 +0-065) are up +5 ticks as the slide in stocks boosts the safe-haven demand for T-notes.

China Jul home prices rose +1.21% m/m, the largest increase in 22-months.

UK Jul CPI was unch m/m and rose +2.5% y/y, right on expectations. The Jul core CPI rose +1.9% y/y, right on expectations.

U.S. Stock Preview

Key U.S. news today includes: (1) weekly MBA mortgage applications (previous -3.0% to 342.5 with purchase sub-index down -2.0% to 233.1 and refi sub-index down -4.5% to 927.6), (2) Q2 non-farm productivity (expected +2.4%, Q1 +0.4%) and Q2 unit labor costs (expected +0.2%, Q1 +2.9%), (3) Aug Empire survey manufacturing business conditions index (expected -2.6 to 20.0, Jul -2.4 to 22.6), (4) Jul retail sales (expected +0.1% and +0.4% ex autos, Jun +0.5% and +0.4% ex autos), (5) Jul industrial production (expected +0.3%, Jun +0.6%), (6) Jun business inventories (expected +0.1%, May +0.4%), (7) Aug NAHB housing market index (expected -1 to 67, Jul unch at 68), (8) EIA weekly Petroleum Status Report.