OVERNIGHT MARKETS AND NEWS

September E-mini S&Ps (ESU14 -0.16%) this morning are down -0.14% and European stocks are down -0.40% on concern the economic recovery is slowing in Europe after German May exports fell more than expected and after UK manufacturing unexpectedly contracted by the most in 16 months. Asian stocks closed mixed: Japan -0.42%, Hong Kong unchanged, China +0.19%, Taiwan +0.11%, Australia -0.14%, Singapore -0.25%, South Korea -0.01%, India -1.98%. Commodity prices are mixed. Aug crude oil (CLQ14 -0.12%) is down -0.15%. Aug gasoline (RBQ14 -0.38%) is down -0.45% at a 3-week low. Aug gold (GCQ14 +0.55%) is up +0.28%. Sep copper (HGU14 +0.17%) is up +0.20%. Agriculture and livestock prices are mostly higher. The dollar index (DXY00 +0.04%) is up +0.08%. EUR/USD (^EURUSD) is down -0.08%. USD/JPY (^USDJPY) is down -0.13%. Sep T-note prices (ZNU14 +0.15%) are up +6.5 ticks.

The German May trade balance widened to a surplus of +17.8 billion euros, more than expectations of +16.2 billion euros and the largest surplus in 6 months. May exports fell -1.1% m/m, more than expectations of -0.4% m/m, and May imports unexpectedly dropped -3.4% m/m, weaker than expectations of +0.5% m/m and the biggest decline in 1-1/2 years.

The German May current account balance shrank to a surplus of +13.2 billion euros, less than expectations of +14.5 billion euros and the smallest surplus in 9 months.

UK May industrial production unexpectedly fell -0.7% m/m, weaker than expectations of a +0.3% m/m increase and the largest decline in 9 months. On an annual basis, May industrial production rose +2.3% y/y, less than expectations of +3.2% y/y.

UK May manufacturing production unexpectedly fell -1.3% m/m, weaker than expectations of +0.4% and the largest decline in 16 months. On an annual basis May manufacturing production rose +3.7% y/y, less than expectations of +5.6% y/y.

The Japan Jun eco watchers survey outlook unexpectedly fell -0.5 to 53.3 when expectations were for a +0.7 point increase to 54.5. The Jun eco watchers survey current rose +2.6 to 47.7, a smaller increase than expectations of +3.8 to 48.9.

U.S. STOCK PREVIEW

Today's May consumer credit report is expected to show another large increase of +$20.0 billion following the April surge of +$26.847 billion. The Treasury today will sell $27 billion of 3-year T-notes. There are two of the Russell 1000 companies that report earnings today: Alcoa (consensus $0.12), and Hertz Global Holdings (0.08). Equity conferences this week include: MicroStrategy Global User Conference on Tue, SEMICON West Conference on Tue, and Paris Europlace Financial Forum: Europe 2020 a Driver to Global Growth? on Tue-Wed.

OVERNIGHT U.S. STOCK MOVERS

The Fresh Market (TFM -3.34%) was downgraded to 'Sell' from 'Neutral' at Goldman Sachs.

3M Company (MMM -0.34%) was upgraded to 'Buy' from 'Hold' at Argus.

Range Resources (RRC -2.05%) was upgraded to 'Hold' from 'Reduce' at KLR Group.

Covidien (COV -1.05%) and Medtronic (MDT -1.46%) were both added to short-term buy list at Deutsche Bank.

Groupon (GRPN -3.30%) was upgraded to 'Buy' from 'Neutral' at B. Riley.

Guess (GES -0.47%) was upgraded to 'Overweight' from 'Neutral' at Piper Jaffray with a price target of $32.

Rio Tinto (RIO -0.97%) was upgraded to 'Overweight' from 'Equal Weight' at Barclays.

CA Technologies (CA +0.10%) lowered guidance on fiscal 2015 EPS view to $2.42-$2.49 from $2.45-$2.52, below consensus of $2.50.

683 Capital reported an 18.9% stake in Body Central (BODY -3.75%) .

Full Moon reported a 15.4% passive stake in Cellular Biomedicine (CBMG+1.72%) .

Vertex (VRTX -1.98%) was downgraded to 'Perform' from 'Outperform' at Oppenheimer.

Novel Century Ventures reported a 15.46% passive stake in ExOne (XONE -10.76%) .

MARKET COMMENTS

Sep E-mini S&Ps (ESU14 -0.16%) this morning are down -2.75 points (-0.14%). The S&P 500 index on Monday closed lower. Bearish factors for stocks included (1) negative carry-over from a slide in European stocks after German May industrial production unexpectedly fell -1.3% m/m, the sharpest drop in 2 years, and (2) interest rate concerns after Goldman Sachs moved up its forecast for the Fed to start raising interest rates to Q3-2015 from Q1-2016, saying the economy is "accelerating to an above-trend pace." Closes: S&P 500 -0.39%, Dow Jones -0.26%, Nasdaq -0.31%.

Sep 10-year T-notes (ZNU14 +0.15%) this morning are up +6.5 ticks. Sep 10-year T-note futures prices on Monday closed higher. Supportive factors included (1) concerns about the global economy after IMF Managing Director Lagarde hinted that the IMF may cut its global growth forecasts, saying investment is still weak, and (2) increased safe-haven demand for T-notes after stock prices faltered. Closes: TYU4 +5.00, FVU4 +0.25.

The dollar index (DXY00 +0.04%) this morning is up +0.065 (+0.08%). EUR/USD (^EURUSD) is down -0.0011 (-0.08%). USD/JPY (^USDJPY) is down -0.13 (-0.13%). The dollar index on Monday retreated from a 1-week high and closed lower as a drop in the 10-year T-note yield reduced the dollar's interest rate differentials. The dollar earlier posted a 1-week high on speculation the Fed may raise interest rates sooner than the market expects after Goldman Sachs moved up its forecast for the Fed to start raising interest rates to Q3-2015 from Q1-2016. EUR/USD had slipped to a 2-week low after German May industrial production unexpectedly plunged by the most in 2 years. Closes: Dollar index -0.051 (-0.06%), EUR/USD +0.00108 (+0.08%). USD/JPY -0.215 (-0.21%).

Aug WTI crude oil (CLQ14 -0.12%) this morning is down -16 cents (-0.15%). Aug gasoline (RBQ14 -0.38%) is down -0.0134 (-0.45%) at a new 3-week low. Aug crude and gasoline prices on Monday fell to 3-week lows and closed lower. Bearish factors included (1) reduced gasoline demand after Hurricane Arthur swept up the East Coast over the Fourth of July holiday, a typically strong time of year for gasoline consumption, and (2) increased supplies when Libya's Oil Minister said his country has 7.5 million bbl of oil ready for export after the Es Sider and Ras Lanuf oil export facilities were reopened when the government reached an agreement with rebels who had blockaded the ports for the past year. Closes: CLQ4 -0.24 (-0.23%) RBQ4 -0.0306 (-1.02%).

GLOBAL EVENT CALENDAR07/08/2014

U.S. STOCK CALENDAR07/08/2014