Barchart Morning Call

Dec E-mini S&Ps (ESZ17 +0.05%) this morning are up +0.08% ahead of a meeting today between President Trump and congressional leaders to negotiate on a long-term budget deal. The House is expected to vote on a two-week spending bill today to keep the government open through Dec 22, and the Senate is expected to vote on the measure Friday. European stocks are up +0.14% after Eurozone Q3 GDP was revised upward to show the fastest pace of growth in 6-1/2 years. Gains in European stocks were limited, and EUR/USD slipped to a 2-week low after German Oct industrial production unexpectedly declined by the most in 10-months. Asian stocks settled mixed: Japan +1.45%, Hong Kong +0.28%, China -0.67%, Taiwan -0.37%, Australia +0.54%, Singapore -0.27%, South Korea -0.29%, India +1.08%. China’s Shanghai Composite closed lower, but remained above Wednesday’s 3-1/2 month low, and Japan’s Nikkei Stock Index moved higher due to strength in technology stocks and a weaker yen, which boosted Japanese exporters.

The dollar index (DXY00 +0.17%) is up +0.15% at a 2-week high. EUR/USD (^EURUSD) is down -0.08% at a 2-week low. USD/JPY (^USDJPY)vis up +0.36%.

Mar 10-year T-note prices (ZNH18 -0.11%) are down -3.5 ticks.

German Oct industrial production unexpectedly contracted for a second month as it fell -1.4% m/m, weaker than expectations of +0.9% m/m and the steepest decline in 10-months.

Eurozone Q3 GDP was revised upward to +2.6% y/y from +2.5% y/y, the strongest pace of expansion in 6-1/2 years.

Key U.S. news today includes: (1) Nov Challenger job cuts (Oct -3.0% y/y), (2) weekly initial unemployment claims (expected +2,000 to 240,000, previous -2,000 to 238,000) and continuing claims (expected -38,000 to 1.919 million, previous +42,000 to 1.957 million), (3) USDA weekly Export Sales, and (4) Oct consumer credit expected +$17.0 billion, Sep +$20.83 billion.

Notable Russell 1000 earnings reports today include: Dollar General (consensus $0.94), Vail Resorts (-1.92), Toro (0.29), Cooper Cos (2.65).

U.S. IPO’s scheduled to price today: Denali Therapeutics (DNLI), Luther Burbank (LBC), GigCapital (GIG).

Equity conferences this week: Barclays Global Technology, Media and Telecommunications Conference on Wed-Thu, Wells Fargo Pipeline MLP and Energy Symposium on Wed-Thu, Citi Global Health Care Conference on Wed-Thu, th Capital Utah Corporate Access Event Conference on Wed-Thu, Bank of America Merrill Lynch Emerging Technology Conference on Thu.

Hyatt Hotels (H -1.51%) was upgraded to ‘Buy’ from ‘Neutral’ at MKM Partners with a target price of $79.

Davita (DVA +13.57%) was upgraded to ‘Strong Buy’ form ‘Outperform’ at Raymond James with a target price of $84.

Broadcom Ltd (AVGO +0.86%) gained over 3% in after-hours trading after it reported Q4 adjusted net revenue of $4.85 billion, higher than consensus of $4.83 billion, and then said it sees Q1 adjusted net revenue of $5.23 billion to $5.38 billion, well above consensus of $4.83 billion.

Spark Therapeutics (ONCE -1.78%) rose over 3% in after-hours trading after it reported interim data from a clinical trial of investigational gene therapy for hemophilia B.

Ollie’s Bargain Outlet Holdings (OLLI +0.59%) fell over 3% in after-hours trading after it said it sees full-year net sales of $1.06 billion to $1.07 billion, the mid-point below consensus of $1.07 billion.

Cummins (CMI +0.33%) was rated a new ‘Outperform’ at Oppenheimer with an 18-month target price of $192.

BorgWarner (BWA -2.45%) was rated a new ‘Outperform’ at Oppenheimer with an 18-month target price of $63.

Greif (GEF +0.09%) climbed 4% in after-hours trading after it reported Q4 net sales of $968.1 million, above consensus of $933.6 million.

Lululemon Athletica (LULU +1.96%) rallied over 6% in after-hours trading after it reported Q3 adjusted EPS of 56 cents, better than consensus of 52 cents, and then raised guidance on full-year adjusted EPS to $2.45-$2.48 from a prior view of $2.35-$2.42, higher than consensus of $2.40.

Okta (OKTA +0.35%) rose 5% in after-hours trading after it reported Q3 revenue of $68.2 million, above consensus of $62.8 million, and said it sees full-year revenue of $252 million to $253 million, better than consensus of $244.6 million.

Ctrip.com International Ltd (CTRP -1.46%) lost more than 1% in after-hours trading after its American depository receipts (ADRs) were downgraded to ‘Neutral’ from ‘Overweight’ at JPMorgan Chase.

Tailored Brands (TLRD +1.66%) jumped 13% in after-hours trading after it reported Q3 adjusted EPS of 71 cents, well above consensus of 54 cents, and then said it sees full-year adjusted EPS of $2.03 to $2.08, better than consensus of $1.83.

Seachange International (SEAC +2.19%) soared over 20% in after-hours trading after it reported Q3 revenue of $23.4 million, higher than consensus of $19.5 million.

Dec S&P 500 E-mini stock futures (ESZ17 +0.05%) this morning are up +2.00 points (+0.08%). Wednesday’s closes: S&P 500 -0.01%, Dow Jones -0.16%, Nasdaq +0.45%. The S&P 500 on Wednesday closed little changed. Stocks were supported by the as-expected +190,000 increase in the U.S. Nov ADP employment change, right on expectations and a sign of strength in the U.S. labor market, and by a rebound in technology stocks after the Nasdaq Composite recovered from a 3-week low and moved higher. Stocks were undercut by weakness in energy stocks after crude oil fell -2.88% to a 2-week low and by concern about a partial government shutdown if Congress doesn’t extend funding past Friday.

Mar 10-year T-note prices (ZNH18 -0.11%) this morning are down -3.5 ticks. Wednesday’s closes: TYH8 +8.00, FVH8 +5.50. Mar 10-year T-notes on Wednesday closed higher on the downward revision in U.S. Q3 unit labor costs to -0.2%, weaker than expectations of +0.2% and a sign of slack wage pressures. T-notes were also supported by carry-over support from a rally in German 10-year bunds to a 5-1/4 month high.

The dollar index (DXY00 +0.17%) this morning is up +0.136 (+0.15%) at a new 2-week high. EUR/USD (^EURUSD) is down -0.0010 (-0.08%) at a fresh 2-week low and USD/JPY (^USDJPY) is up +0.40 (+0.36%). Wednesday’s closes: Dollar Index +0.231 (+0.25%), EUR/USD -0.0030 (-0.254%), USD/JPY -0.31 (-0.28%). The dollar index on Wednesday moved up to a 2-week high and closed higher on signs of strength in the U.S. labor market that bolsters the case for additional Fed rate hikes after the Nov ADP employment change increased in line with estimates. In addition, EUR/USD fell to a 2-week low as the fall in the German 10-year bund yield to a 5-1/4 month low undercut the euro’s interest rate differentials.

Jan crude oil (CLF18 +0.14%) this morning is up +26 cents (+0.46%) and Jan gasoline (RBF18 +0.66%) is +0.0153 (+0.92%). Wednesday’s closes: Jan WTI crude -1.66 (-2.88%), Jan gasoline -0.0575 (-3.35%). Jan crude oil and gasoline on Wednesday closed lower with Jan crude at a 2-week low and Jan gasoline at a 1-month low. Crude oil prices were undercut by the rally in the dollar index to a 2-week high, the +0.3% increase in U.S. crude production in the week ended Dec 1 to a 46-year high of 9.707 million bpd, and the +6.78 million bbl surge in EIA gasoline inventories (vs expectations of +2.5 million bbl).

Metals prices this morning are mixed with Feb gold (GCG18 -0.77%) -8.3 (-0.66%) at a 4-1/2 month low, Mar silver (SIH18 -0.75%) -0.070 (-0.44%) at a 4-3/4 month low and Mar copper (HGH18 +0.32%) +0.016 (+0.52%). Wednesday’s closes: Feb gold +1.2 (+0.09%), Mar silver -0.113 (-0.70%), Mar copper +0.0155 (+0.53%). Metals on Wednesday settled mixed with Mar silver at a 4-1/2 month low. Metals prices were undercut by strength in the dollar after the dollar index rose to a 2-week high and by fund selling of silver on concern that a slowdown in China, the biggest consumer of silver, will reduce its demand for the metal. Gold moved higher on increased safe-haven demand on concern Congress may fail to extend the debt limit pasty Friday, which would lead to a partial shutdown of the government.