Morning Call For Thursday, August 16

Overnight Markets And News

Sep E-mini S&Ps (ESU18 +0.46%) this morning are up +0.57% and European stocks are up +0.53% on signs of a thaw in China/U.S. trade tensions after China announced that Vice Commerce Minister Shouwen will lead a delegation to the U.S. later this month for trade talks. Also, a 6% jump in Walmart in pre-market trading is giving the overall market a lift after Walmart raised its full-year earnings forecast. Another positive for stocks is the rally in the Turkish lira by more than 2% against the dollar, its third day of gains. Asian stocks settled lower: Japan -0.05%, Hong Kong -0.82%, China -0.66%, Taiwan -0.31%, Australia -0.01%, Singapore -0.69%, South Korea -0.98%, India -0.50%. Asian equity markets were undercut by losses in technology stocks, led by a 5% decline in Chinese tech giant Tencent Holdings, which sent the Shanghai Composite down to its lowest in 2-1/3 years. Tencent sold-off after it reported its first profit decline in more than a decade.

The dollar index (DXY00 -0.12%) is down -0.06%. EUR/USD (^EURUSD +0.25%) is up +0.24%. USD/JPY (^USDJPY +0.13%) is up +0.14%.

Sep 10-year T-note prices (ZNU18 -0-060) are down -8.5 ticks.

China Jul foreign direct investment rose +14.9% y/y, the largest increase in 8 months.

UK Jul retail sales ex auto fuel rose +0.9% m/m, stronger than expectations of no change. Jul retail sales including auto fuel rose +0.7% m/m, stronger than expectations of +0.2% m/m.

The Japan Jul trade balance was in deficit by -231.2 billion yen, wider than expectations of -41.2 billion yen. Jul exports rose +3.9% y/y, weaker than expectations of +6.3% y/y. Jul imports rose +14.6% y/y, stronger than expectations of +14.2% y/y and the largest increase in 5-months.

U.S. Stock Preview

Key U.S. news today includes: (1) weekly initial unemployment claims (expected +2,000 to 215,000, previous -6,000 to 213,000) and continuing claims (expected -15,000 to 1.740 million, previous +29,000 to 1.755 million), (2) Aug Philadelphia Fed business outlook survey general conditions index (expected -3.7 to 22.0, Jul +5.8 to 25.7), (3) Jul housing starts (expected +7.4% to 1.260 million, Jun -12.3% to 1.173 million), (4) USDA weekly Export Sales, (5) Treasury announces amount of 5-year TIPS to be auctioned Aug 23.