Morning Call: Trade optimism lifts U.S. stocks; Dec E-mini S&Ps up +0.32%; Dollar index up +0.29% at a 2-1/2 month high.
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 ESZ18 - S&P 500 E-Mini
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Overnight Markets and News

Dec E-mini S&Ps (ESZ18 +0.34%) this morning are up +0.32% on optimism the U.S. and China can resolve their trade differences after President Trump in an interview with Fox News late Monday said, "I think we will make a great deal with China, and it has to be great because they've drained our country." President Trump and Chinese President Xi Jinping are scheduled to meet at the G-20 summit in Buenos Aires next month. European stocks are down -0.28% after Eurozone Q3 GDP grew at the slowest pace in nearly 4 years and after Eurozone Oct economic confidence fell to a 17-month low. Asian stocks settled mixed: Japan +1.45%, Hong Kong -0.91%, China +1.02%, Taiwan +0.10%, Australia +1.34%, Singapore -0.51%, South Korea +0.88%, India -0.52%. China's Shanghai Composite recovered from a 1-week low and closed higher after the China Securities Regulatory Commission said it will increase stock market liquidity and encourage long-term funds to invest in shares. Chinese stocks had moved lower on U.S.-China trade concerns along with weakness in the yuan which tumbled to a 10-1/4 year low of 6.9741 per dollar. Japanese shares closed higher as exporter stocks rallied after USD/JPY climbed to a 1-week high, which boosts the earnings prospects of exporters.

The dollar index (DXY00 +0.34%) is up +0.29% at a 2-1/2 month high. EUR/USD (^EURUSD -0.19%) is down -0.19. USD/JPY (^USDJPY +0.41%) is up +0.39% at a 1-week high.

Dec 10-year T-note prices (ZNZ18 -0-055) are down -7 ticks.

Eurozone Q3 GDP rose +0.2% q/q and +1.7% y/y, weaker than expectations of +0.4% q/q and +1.8% y/y with the +1.7% y/y gain the slowest year-on-year pace of growth since Q4 2014.

Eurozone Oct economic confidence fell -1.1 to a 17-month low of 109.8, weaker than expectations of -0.9 to 110.0. The Oct business climate indicator fell -0.20 to a 17-month low of 1.01, weaker than expectations of -0.05 to 1.16.

German Oct unemployment fell -11,000 to 2.292 million, slightly less than expectations of -12,00. The Oct unemployment rate remained unchanged as expected at 5.1%, the lowest since German reunification.

The Japan Sep jobless rate unexpectedly fell -0.1 to 2.3%, stronger than expectations of no change at 2.4%. The Sep job-to-applicant ratio rose +0.1 to a 44-3/4 year high of 1.64, stronger than expectations of no change at 1.63.

U.S. Stock Preview

Key U.S. news today includes: (1) Aug S&P CoreLogic composite-20 home price index (expected +0.1% m/m and +5.8% y/y, Jul +0.09% m/m and +5.9% y/y), and (2) Conference Board U.S. Oct consumer confidence (expected -2.5 to 135.9, Sep +3.7 to 138.4).

Notable S&P 500 earnings reports today include: Facebook (consensus $1.47), GE (0.20), eBay (0.55), MasterCard (1.68), Electronic Arts (0.57), Amgen (3.46), MGM Resorts (0.19), Cummins (3.76), Under Armour (0.13), Aetna (2.83), Coca-Cola (0.55), Pfizer (0.75)

U.S. IPO's scheduled to price today: Orchard Rx (ORTX), Twist Bioscience (TWST).

Equity conferences during the remainder of this week: GSMA Mobile Russia & CIS Conference on Tue, SecureWorld Denver Conference on Wed, Solix EMPOWER New York Conference on Thu, TRANSACT Tech San Francisco Conference on Thu, Data Center Summit on Fri.

Market Comments

Dec S&P 500 E-minis (ESZ18 +0.34%) this morning are up +8.50 points (+0.32%). Monday's closes: S&P 500 -0.66%, Dow Jones -0.99%, Nasdaq 100 -2.02%. The S&P 500 on Monday sold off to a 5-3/4 month low and closed lower on heightened trade concerns on a report the Trump administration will announce additional tariffs on Chinese imports in early December if trade talks scheduled for next month between President Trump and Chinese President Xi Jinping fail. Stocks were also undercut by the +0.2% increase in U.S. Sep personal income, weaker than expectations of +0.4%. Tech stocks dragged the market lower, led by a 6% slide in Amazon. Stocks found support on M&A activity after IBM acquired Red Hat for $33 billion. There was also strength in automakers on a report that China has proposed cutting the tax on new car purchases in half to 5% from 10% for vehicles with engines no bigger than 1.6 liters.

Dec 10-year T-notes (ZNZ18 -0-055) this morning are down -7 ticks. Monday's closes: TYZ8 -2.50, FVZ8 -1.75. Dec T-notes on Monday closed lower on the +0.2% m/m increase in the U.S. Sep core PCE deflator (stronger than expectations of +0.1% m/m) and on the solid +0.4% increase in U.S. Sep personal spending.

The dollar index (DXY00 +0.34%) this morning is up +0.276 (+0.29%) at a 2-1/2 month high, EUR/USD (^EURUSD -0.19%) is down -0.0022 (-0.19%), and USD/JPY (^USDJPY +0.41%) is up +0.44 (+0.39%) at a 1-week high. Monday's closes: Dollar Index -0.320 (-0.33%), EUR/USD -0.0030 (-0.26%), USD/JPY +0.46 (+0.41%). The dollar index on Monday closed higher on the solid +0.4% increase in U.S. Sep personal spending and on the increase in T-note yields, which boosted the dollar's interest rate differentials.

Metals prices this morning are lower with Dec gold (GCZ18 -0.33%) -5.5 (-0.45%) at a 1-week low, Dec silver (SIZ18 -0.15%) -0.057 (-0.39%), and Dec copper (HGZ18 -1.19%) -0.034 (-1.24%). Monday's closes: Dec gold -8.2 (-0.66%), Dec silver -0.258 (-1.76%), Dec copper -0.0005 (-0.02%). Metals on Monday settled mixed. Metals prices were undercut by dollar strength and by a report that the U.S. will impose additional tariffs on Chinese goods in early December if trade talks scheduled for next month between President Trump and President Xi Jinpimg fail. Metals found support on signs of tight supplies after LME copper inventories fell -3,225 MT to a 2-1/2 year low of 143,225 MT.

Dec WTI crude oil prices (CLZ18 -0.54%) this morning are down -38 cents (-0.57%) and Dec gasoline (RBZ18 +0.05%) is -0.09 (-0.05%). Monday's closes: Dec crude oil +0.26 (+0.39%), Dec gasoline +0.16 (+0.19%). Dec crude oil and gasoline on Monday settled mixed. Crude oil prices were undercut by a stronger dollar and by expectations for Wednesday's EIA crude inventories to increase by 3 million bbl. Crude oil prices continue to see support from the impending reinstatement of U.S. sanctions on Iran this coming Monday (Nov 5), which will cut Iranian oil exports beyond the 35% drop that has already been seen.

Overnight U.S. Stock Movers

Phillips 66 (PSX -0.94%) was upgraded to 'Overweight' from 'Neutral' at JPMorgan Chase with a price target of $138.

KLA-Tencor (KLAC -2.39%) gained almost 2% in after-hours trading after it reported Q1 adjusted EPS of $2.46, higher than consensus of $2.21.

Tesla (TSLA +1.19%) was downgraded to 'Sell' from 'Hold' at Independent Research GmbH with a price target of $320.

Akami Technologies (AKAM +0.13%) rallied almost 5% in after-hours trading after it forecast Q4 adjusted EPS of 97 cents to $1.03, better than consensus of 90 cents.

Texas Roadhouse (TXRH -0.46%) dropped more than 10% in after-hours trading after it reported Q3 EPS of 40 cents, below consensus of 54 cents.

National Oilwell Varco (NOV -2.17%) was upgraded to 'Buy' from 'Hold' at Societe Generale with a price target of $48.

Varonis Systems (VRNS -1.99%) rose 3% in after-hours trading after it forecast Q4 adjusted EPS of 32 cents to 34 cents, higher than consensus of 29 cents.

Trex (TREX -3.68%) fell 5% in after-hours trading after it reported Q3 net sales of $166.4 million, below consensus of $173.2 million, and then forecast Q4 net sales of $131 million, weaker than consensus of $139 million.

Chegg (CHGG -3.40%) climbed nearly 9% in after-hours trading after it raised guidance on full-year revenue to $315 million to $318 million from a prior forecast of $306 million to $3111 million, higher than consensus of $309.7 million.

Mondelez International (MDLZ unch) gained more than 2% in after-hours trading after it reported Q3 adjusted EPS of 62 cents, better than consensus of 60 cents.

Cognex (CGNX -3.95%) tumbled 11% in after-hours trading after it forecast Q4 revenue of $180 million to $190 million, weaker than consensus of $200.2 million.

Nautilus (NLS +2.92%) dropped 8% in after-hours trading after it reported Q3 net sales of $91.1 million, weaker than consensus of $94.1 million.

Transocean Ltd (RIG -5.20%) gained 2% in after-hours trading after it reported an unexpected profit of 7 cents EPS, better than consensus of a loss of -10 cents a share.

Elevate Credit (ELVT -2.61%) plunged 21% in after-hours trading after it reported Q3 adjusted EPS of 2 cents, well below consensus of 13 cents.