OVERNIGHT MARKETS AND NEWS

September E-mini S&Ps (ESU14 +0.09%) this morning are up +0.09% and European stocks are up +0.63% on optimism that today's U.S. Jun payrolls report will show employers added more than 200,000 jobs for a fifth month. The markets will also eagerly interpret comments from ECB President Draghi following today's ECB monetary policy meeting. Asian stocks closed mixed: Japan -0.14%, Hong Kong -0.08%, China +0.43%, Taiwan +0.44%, Australia +0.66%, Singapore +0.28%, South Korea -0.35%, India -0.07%. China's Shanghai Stock Index climbed to a 2-week high on signs the Chinese economy is growing after a gauge of manufacturing and service industry activity expanded at the fastest pace in 1-1/4 years. Commodity prices are mixed. Aug crude oil (CLQ14-0.68%) is down -0.58% at a 3-week low on signs of increased supplies after Libya said it was opening the Es Sider and Ras Lanuf oil export facilities after reaching an agreement with rebels who had blockaded the ports for the past year. Aug gasoline (RBQ14 -0.29%) is down -0.36%. Aug gold (GCQ14 -0.83%) is down -0.66%. Sep copper (HGU14-0.41%) is down -0.43%. Agriculture and livestock prices are higher with Aug live cattle prices up +1.43% at an all-time high. The dollar index (DXY00 +0.11%) is up +0.11%. EUR/USD (^EURUSD) is down -0.06% on speculation ECB President Draghi will jawbone EUR/USD lower when he speaks later today. USD/JPY (^USDJPY) is up +0.11% at a 1-week high. Sep T-note prices (ZNU14 unch) are little changed, up +0.5 of a tick.

Eurozone May retail sales were unch m/m and +0.7% y/y, weaker than expectations of +0.3% m/m and +1.8% y/y. Apr retail sales were revised down to -0.2% m/m and +1.8% y/y from the originally reported +0.4% m/m and +2.4% y/y.

The German Jun Markit services PMI was revised downward to 54.6 from the originally reported 54.8.

The UK Jun Markit/CIPS services PMI fell -0.9 to 57.7, a bigger drop than expectations of -0.3 to 58.3

The China Jun HSBC composite PMI rose +2.2 to 52.4, the fastest pace expansion in 1-1/4 years.

The China Jun non-manufacturing PMI fell -0.5 to 55.0.

U.S. STOCK PREVIEW

The market is expecting today's June payroll report to show a +215,000 increase, close to the +217,000 increase seen in May. The market is expecting today's June unemployment rate to remain unchanged from the 5-3/4 year low of 6.3% posted in April and May. Today's weekly initial unemployment claims report is expected to show a small increase of +1,000 to 313,000 following last week's -2,000 decline to 312,000. Meanwhile, continuing claims are expected to show a decline of -11,000 to 2.560 million, reversing most of last week's +12,000 increase to 2.571 million. Today's May U.S. trade deficit report is expected to narrow mildly to -$45.0 billion from -$47.2 billion in April. Today's June ISM non-manufacturing index is expected to be unchanged at 56.3, stalling after May's +1.1 point increase to 56.3. There are no Russell 1000 companis that report earnings today. There are no equity conferences this week.

OVERNIGHT U.S. STOCK MOVERS

Stifel raised its price target for Constellation Brands (STZ +2.34%) to $113 from $90 following the company's Q1 results and keeps a 'Buy' rating on the stock.

International Speedway (ISCA +1.02%) reported Q2 adjusted EPS of 50 cents, better than consensus of 49 cents.

Cree (CREE -0.08%) was upgraded to 'Outperform' from 'Perform' at Oppenheimer.

Comerica (CMA -0.42%) was downgraded to 'Neutral' from 'Buy' at Citigroup.

Athlon Energy (ATHL -1.47%) was upgraded to 'Buy' from 'Neutral' at UBS.

Altai Capital lowered its stake in RealD (RLD -0.85%) to 5.7% from 9.8%.

Billionare activist investor Carl Icahn reported a 9.39% stake in Family Dollar (FDO +1.29%) .

East Rock Capital reported a 15% passive stake in Bay Bank (BYBK+1.57%) .

SYNNEX (SNX +0.18%) reported Q2 EPS of $1.52, well ahead of consensus of $1.36.

MARKET COMMENTS

Sep E-mini S&Ps (ESU14 +0.09%) this morning are up +1.75 points (+0.09%). The S&P 500 index on Wednesday closed higher but remained below Tuesday's record high. Signs of strength in the U.S. labor market boosted stocks after Jun ADP employment rose +281,000, stronger than expectations of +205,000 and the largest increase in 1-1/2 years. Gains were muted after (1) U.S. May factory orders fell -0.5%, a bigger decline than expectations of -0.3%, and (2) airline stocks tumbled when Delta Air Lines said that excess capacity in some international markets forced air fares down more than expected. Closes: S&P 500 +0.07%, Dow Jones +0.12%, Nasdaq +0.13%.

Sep 10-year T-notes (ZNU14 unch) this morning are up +0.5 of a tick. Sep 10-year T-note futures prices on Wednesday fell to a 1-week low and closed lower on signs the economy is strengthening after the Jun ADP employment change rose by the most in 1-1/2 years. Losses in T-notes were contained after May factory orders fell more than expected. Closes: TYU4 -15.50, FVU4 -9.25.

The dollar index (DXY00 +0.11%) this morning is up +0.089 (+0.11%). EUR/USD (^EURUSD) is down -0.0008 (-0.06%). USD/JPY (^USDJPY) is up +0.11 (+0.11%) at a 1-week high. The dollar index on Wednesday closed higher on signs the U.S. economy may be gaining traction after Jun ADP employment rose by the most in 1-1/2 years. EUR/USD closed lower on speculation ECB President Draghi may attempt to jawbone EUR/USD lower following Thursday's ECB meeting as EUR/USD is higher now than when the ECB expanded stimulus measures following last month's policy meeting. Closes: Dollar index +0.141 (+0.18%), EUR/USD -0.0020 (-0.15%). USD/JPY +0.253 (+0.25%).

Aug WTI crude oil (CLQ14 -0.68%) this morning is down -61 cents (-0.58%) at a 3-week low. Aug gasoline (RBQ14 -0.29%) is down -0.0109 (-0.36%). Aug crude and gasoline prices on Wednesday fell to 2-week lows and closed lower on speculation Tropical Storm Arthur will curb fuel demand on the U.S. East coast over the Fourth of July holiday. Prices recovered from their worst levels on bullish factors that included (1) the -1.359 million bbl drop in crude supplies at Cushing, OK, the delivery point for WTI futures, to a 5-1/4 year low, and (2) the unexpected -1.24 million bbl drop in weekly EIA gasoline inventories vs expectations for a +550,000 bbl build. Closes: CLQ4 -0.86 (-0.82%) RBQ4 -0.0154 (-0.51%).

GLOBAL EVENT CALENDAR07/03/2014

U.S. STOCK CALENDAR07/03/2014