Morning Call For Wednesday, August 23

OVERNIGHT MARKETS AND NEWS

Sep E-mini S&Ps (ESU17 -0.23%) this morning are down -0.25% after President Trump last night at a rally in Arizona threatened to shut down the government over the Mexico border wall. The issue over funding for a border wall may become entangled with legislation to raise the federal government’s debt limit, which needs to be raised by mid-Oct to avoid a default. Stocks also moved lower on global trade concerns when President Trump said he might terminate the North American Free Trade Agreement (NAFTA) at some point. The global trade concerns also weakened European stocks, which are down -0.12%, although losses were limited after stronger-than-expected Eurozone manufacturing data boosted confidence in the European economic outlook. Asian stocks settled mixed: Japan +.26%, Trading in Hong Kong was canceled due to Typhoon Hato, China -0.08%, Taiwan +0.14%, Australia -0.23%, Singapore -0.11%, South Korea +0.12%, India +0.88%. Chinese stocks closed lower and gains in Japanese stocks were capped on global trade concerns after President Trump threatened to end NAFTA.

The dollar index (DXY00 -0.24%) is down -0.15%. EUR/USD (^EURUSD) is up +0.18%. USD/JPY (^USDJPY) is down -0.15%.

Sep 10-year T-note prices (ZNU17 +0.02%) are unchanged.

The Eurozone Aug Markit manufacturing PMI unexpectedly rose +0.8 to 57.4, stronger than expectations of -0.3 to 56.3 and matched Jun as the fastest pace of expansion since the data series began in 2014.

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) weekly MBA mortgage applications (previous +0.1% with purchase sub-index -1.5% and refi sub-index +1.6%), (2) Dallas Fed President Robert Kaplan speaks before the Permian Basin Petroleum Association Membership Luncheon in Midland, TX, (3) Aug Markit manufacturing PMI (expected +0.1 to 53.4, Jul +1.3 to 53.3) and Aug Markit services PMI (expected +0.2 to 54.9, Jul +0.5 to 54.7), (4) Jul new home sales (expected unch at 610,000, Jun +0.8% to 610,000), (5) Treasury auctions $13 billion 2-year floating-rate notes, (6) EIA Weekly Petroleum Status Report.