OVERNIGHT MARKETS AND NEWS

December E-mini S&Ps (ESZ14 +0.41%) this morning are up +0.40% and European stocks are up +0.77% on positive carry-over from yesterday's FOMC meeting where policy makes kept their pledge to keep interest rates near zero for a "considerable period" after completing asset purchases. Asian stocks closed mostly higher: Japan +1.13%, Hong Kong -0.85%, China +0.31%, Taiwan +0.46%, Australia +0.16%, Singapore +0.02%, South Korea -0.87%, India +1.81%. Japan's Nikkei Stock Index climbed to an 8-1/4 month high after Japan's trade balance unexpectedly shrunk last month and after exporters rallied when they yen plunged to a 6-year low against the dollar. Commodity prices are mostly lower on dollar strength. Oct crude oil (CLV14 +0.08%) is down -0.14%. Oct gasoline (RBV14 +0.19%) is up +0.04%. Dec gold (GCZ14 -1.05%) is down -0.93% at an 8-1/4 month low on fund selling after the FOMC yesterday increased its estimates for interest rates. Liquidation by funds cut long gold positions in ETF's to 1,706 MT today, the lowest in 4-3/4 years. Dec copper (HGZ14 -0.67%) is down -0.29% on Chinese demand concerns after China's new-home prices fell last month. Agriculture and livestock prices are mostly lower. The dollar index (DXY00 +0.20%) is up +0.22%. EUR/USD (^EURUSD) is up +0.12%. USD/JPY (^USDJPY) is up +0.28% at a fresh 6-year high. Dec T-note prices (ZNZ14 -0.21%) are down -8.5 ticks at a 1-1/2 month low.

China Aug new-home prices fell from a month earlier in 68 of 70 cities tracked by the National Bureau of Statistics, the most since Jan 2011 when the government changed the way it compiles the data.

The Japan Aug trade balance unexpectedly shrank to a deficit of -948.5 billion yen, better than expectations of an increase in the deficit to -1.028 trillion yen, Aug exports fell -1.3% y/y, better than expectations of -2.6% y/y. Aug imports fell -1.5% y/y, a bigger decline than expectations of -1.2% y/y.

UK Sep CBI trends total orders fell -15 to -4, a bigger decline than expectations of -2 to 9 and the lowest in a year. The Sep CBI trends selling prices unexpectedly rose +2 to 1, higher than expectations of unch at -1.

UK Aug retail sales ex autos rose +0.2% m/m and +4.5% y/y, less than expectations of +0.3% m/m and +4.8% y/y. Aug retail sales including autos rose +0.4% m/m and +3.9% y/y, slightly less than expectations of +0.4% m/m and +4.0% y/y.

U.S. STOCK PREVIEW

The market is looking for today’s weekly initial unemployment claims report to show a -10,000 decline to 305,000, reversing nearly all of last week’s rise of +11,000 to 315,000. Meanwhile, the market is expecting today’s continuing claims report to show a -21,000 decline to 2.466 million, more than reversing last week’s increase of +9,000 to 2.487 million. The market is expecting today’s Aug housing starts report to show a decline of -5.2% to 1.037 million, giving back about one-third of July’s surge of +15.7% to 1.093 million. The market is expecting today’s Sep Philadelphia Fed manufacturing index to show a decline of -5.0 to 23.0, more than reversing the +4.1 point increase to 28.0 seen in August. There are 6 earnings reports today from the Russell 1000 companies: IHS (consensus $1.44), Rite Aid (0.06), ConAgra Foods (0.35), Oracle (0.64), Red Hat (0.38), TIBCO Software (0.18).

Equity conferences this week include: Credit Suisse Basic Materials Conference on Tue-Thu, Wolfe Research Power & Gas Leaders Conference on Wed-Thu, Morningstar Management Behind the Moat Conference on Wed-Thu, UBS Houston Energy Bus-less Tour on Wed-Thu, Credit Suisse Chemical & Ag Science Conference on Thu, Imperial Capital Global Opportunities Conference on Thu, MKM Partners Entertainment, Leisure & Internet Conference on Thu, 5th Annual Summit Internal Audit on Thu-Fri, GTC 7th CNS Partnering & Deal-Making on Thu-Fri, Imperial Capital Global Opportunities Conference on Thu, Tokyo Game Show 2014 on Fri, and Zelman & Associates Housing Summit on Fri.

OVERNIGHT U.S. STOCK MOVERS

Kohl's (KSS +0.67%) was upgraded to 'Buy' from 'Neutral' at Citigroup.

Rite Aid (RAD +3.59%) reported Q2 EPS of 13 cents, more than double consensus of 6 cents, but then lowered guidance on fiscal 2015 EPS view to 22 cents-33 cents, weaker than consensus of 34 cents.

DuPont (DD +5.20%) was upgraded to 'Overweight' from 'Neutral' at JPMorgan Chase.

ArcelorMittal (MT +2.14%) was upgraded to 'Buy' from 'Neutral' at BofA/Merrill Lynch.

Citigroup keeps its 'Buy' rating on FedEx (FDX +3.27%) and raises its price target on the stock to $180 from $170.

Monsanto (MON -0.20%) was upgraded to 'Buy' from 'Hold' at Stifel.

Peabody (BTU -1.94%) was downgraded to 'Sell' from 'Neutral' at Goldman Sachs.

IHS Inc. (IHS -0.56%) reported Q3 adjusted EPS of $1.49, stronger than consensus of $1.44.

Clarcor (CLC -0.22%) reported Q3 adjusted EPS of 83 cents, better than consensus of 78 cents, and then raised guidance on fiscal 2014 adjusted EPS to $2.92-$2.98, well above consensus of $2.82.

Credit Suisse initiated InterOil (IOC -0.96%) with an 'Outperform' and a $71 price target.

Pier 1 Imports (PIR +0.91%) slid over 9% in after-hours trading after it reported Q2 EPS of 10 cents, weaker than consensus of 14 cents.

United Natural Foods (UNFI +0.68%) rose 3% in after-hours trading after it reported Q4 EPS of 67 cents, higher than consensus of 65 cents, and then raised guidance on fiscal 2015 GAAP EPS to $2.88-$3.01, above consensus of $2.88.

Herman Miller (MLHR +1.61%) climbed 2% in after-hours trading after it reported Q1 adjusted EPS of 47 cents, right on consensus, although Q1 revenue of $509.7 million was better than consensus of $505.27 million.

MARKET COMMENTS

Dec E-mini S&Ps (ESZ14 +0.41%) this morning are up +800 points (+0.40%). The S&P 500 index on Wednesday posted a 1-week high and closed higher: S&P 500 +0.13%, Dow Jones +0.15%, Nasdaq +0.15%. Bullish factors included (1) benign inflation pressures after Aug CPI unexpectedly fell -0.2% m/m, weaker than expectations of unch m/m and the first decline in 16 months, and (2) reduced interest rate concerns after the Fed retained its “considerable time” interest rate guidance.

Dec 10-year T-notes (ZNZ14 -0.21%) this morning are down -8.5 ticks at a 1-1/2 month low. Dec 10-year T-note futures prices on Wednesday closed lower. Bearish factors included (1) the Fed’s hike in its year-end 2015 fed funds rate forecast to 1.375% from a Jun estimate of 1.125%, and (2) the rise in the Sep NAHB housing market index to the highest level in 8-3/4 years. Closes: TYZ4 -5.50, FVZ4 -5.25.

The dollar index (DXY00 +0.20%) this morning is up +0.188 (+0.22%). EUR/USD (^EURUSD) is up +0.0015 (+0.12%) and USD/JPY (^USDJPY) is up +0.30 (+0.28%) at a fresh 6-year high. The dollar index on Wednesday closed higher. Bullish factors included (1) the Fed’s hike in its year-end 2015 fed funds rate forecast to 1.375% from a Jun estimate of 1.125%, and (2) weakness in the yen as USD/JPY soared to a 6-year high as the Fed raised its interest rate forecast while the market expects the BOJ to keep expanding stimulus. Closes: Dollar index +0.568 (+0.68%), EUR/USD -0.00946 (-0.70%), USD/JPY +1.242 (+1.16%).

Oct WTI crude oil (CLV14 +0.08%) this morning is down -13 cents (-0.14%) and Oct gasoline (RBV14 +0.19%) is up +0.0011 (+0.04%). Oct crude and gasoline prices on Wednesday settled mixed: CLV4 -0.82 (-0.86%), RBV4 +0.0062 (+0.24%). Bearish factors included (1) the unexpected +3.67 million bbl increase in weekly EIA crude inventories vs expectations for a -1.5 million bbl decline, and (2) the +2.6% w/w increase in U.S. crude production in the week ended Sep 12 to 8.838 million bpd, a 28-1/3 year high. Gasoline closed higher after the Fed pledge to keep interest rates low for a “considerable time” after QE3 ends.