Morning Call For May 13, 2016

OVERNIGHT MARKETS AND NEWS

Jun E-mini S&Ps (ESM16 -0.21%) are down -0.28% and European stocks are down -0.36% on global growth concerns after Eurozone Q1 GDP was revised lower and as loan growth in China fell to the slowest pace in 6 months. U.S. stocks were also dragged down by weakness in retailers as Nordstrom plunged 16% in pre-market trading after it cut its full-year earnings forecast and added to evidence that the U.S. department-store industry is in a deep slump. A slide in media stocks also undercut European stocks led by a 30% fall in Eutelstat Communications which cut its forecasts for this year and next. Crude oil (CLM16 -1.03%) is down -1.50%, which has put pressure on energy producing stocks. Asian stocks settled lower: Japan -1.41%, Hong Kong -0.99%, China -0.31%, Taiwan -0.67%, Australia -0.57%, Singapore -0.38%, South Korea -0.72%, India -1.17%. The Chinese yuan weakened to a 1-3/4 month low against the dollar on speculation a slowdown in China’s credit growth may prompt the PBOC to increase stimulus measures.

The dollar index (DXY00 +0.14%) is up +0.23% at a 2-week high. EUR/USD (^EURUSD) is down -0.25% at a 2-week low on the weaker-than-expected Eurozone Q1 GDP. USD/JPY (^USDJPY) is down -0.07%.

Jun T-note prices (ZNM16 +0.17%) are up +6 ticks.

China Apr new yuan loans rose +555.6 billion yuan, weaker than expectations of +800.0 billion yuan and the slowest pace of increase in 6 months.

Eurozone Q1 GDP was revised lower to +0.5% q/q and +1.5% y/y from the originally reported +0.6% q/q and +1.6% y/y.

German Q1 GDP rose +0.7% q/q and +1.6% y/y, stronger than expectations of +0.6% q/q and +1.5% y/y.

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) Apr retail sales (expected +0.8%, +0.5 ex-autos, and +0.3% ex-autos and gas), (2) Apr PPI final demand (expected +0.3% m/m and +0.2% y/y, Mar -0.1% m/m and -0.1% y/y) and Apr PPI ex food & energy (expected +0.1% m/m and +0.9% y/y, Mar -0.1% m/m and +1.0% y/y), (3) Mar business inventories (expected +0.2%, Feb -0.1%), (4) preliminary U.S. May University of Michigan consumer sentiment index (expected +0.5 to 89.5, Apr -2.0 to 89.0), and (5) San Francisco Fed President John Williams delivers a speech to the Sacramento Economic Forum.