In Asian Equity Markets Japanese stocks edged down in choppy trade on Wednesday morning as geopolitical tensions soured investor sentiment, while regional banking stocks underperformed as Japanese government bond yields fell to five-month lows. The Nikkei 225 index lost 0.2 percent to 18,380.81 in midmorning trade, after briefly flirting in positive territory earlier. The MSCI’s broadest index of Asia-Pacific stocks outside Japan was down 0.6 percent to the lowest since mid-March. The Shanghai Composite Index extended its recent retreat with a decline of 1.4 percent. The Chinese market has fallen for four straight sessions on concerns over tighter regulations.

 

In Currency Markets the dollar index edged away from three-week lows on Wednesday, as a resurgent sterling gave back some of the gains it made after British Prime Minister Theresa May called an early general election ahead of Brexit negotiations. The dollar index edged up 0.1 percent to 99.633. Sterling gave up 0.2 percent on the day to $1.2823 after rising as high as $1.2908 on Tuesday, its highest since early October, as investors scurried to cover short positions. The dollar edged up 0.1 percent to 108.58 yen, while the euro edged down slightly to $1.0719 after riding sterling’s coat-tails to three-week highs overnight. The Australian dollar fell 0.4 percent to $0.7528, pressured by sterling’s rise as well as a slide in iron ore prices.

 

In Commodities Markets oil prices fell on Wednesday as bloated U.S. supplies weighed on markets while a fall in Saudi crude exports was offset by rising production in the country. Brent crude futures were at $54.77 per barrel, down 12 cents from their last close. U.S. West Texas Intermediate crude futures were down 9 cents at $52.32 a barrel. Spot gold was down 0.2 percent to $1,286.40 per ounce. U.S. gold futures were down 0.4 percent at $1,288.80. Spot silver was down 0.2 percent to $18.21 per ounce. Platinum fell 0.1 percent to $972.45, while palladium was down 0.3 percent at $772. Palladium on Tuesday fell nearly 2 percent to a more than four-week low of $769.80.

 

In US Equity Markets  the S&P 500 fell for the fourth time in five sessions on Tuesday, weighed down by a decrease in Goldman Sachs and Johnson & Johnson following their quarterly results, while geopolitical tensions added to investor caution. The Dow Jones Industrial Average fell 0.55 percent, to 20,523.28, the S&P 500 lost 0.29 percent, to 2,342.18 and the Nasdaq Composite fell 0.12 percent, to 5,849.47. Goldman Sachs lost 4.7 percent, after hitting its lowest intraday level since Nov. 29. The bank posted earnings that missed expectations as trading revenue decreased. Johnson & Johnson lost 3.1 percent for its worst day in 14 months after quarterly revenue fell short of analysts’ expectations.

 

In Bond Markets Japanese government bond yields brushed a five-month low of zero percent on Tuesday, taking cues from an overnight rally in U.S. Treasuries. The benchmark 10-year JGB yield was down half a basis point at 0.005 percent after briefly falling to zero percent, its lowest since mid-November. U.S. Treasury yields fell to five-month lows overnight as nervousness ahead of France’s first round of presidential elections this weekend and ongoing geopolitical tensions increased demand for safe-haven U.S. debt.

 

 

Economic Calendar

  • 15:30 GMT+1 US Crude Oil Inventories
  • 23:45 GMT+1 NZD CPI q/q

 

US Equity Upgrades

  • AFLAC (AFL) UPGRADED TO OUTPERFORM FROM MARKET PERFORM AT RAYMOND JAMES
  • CHECK POINT (CHKP) UPGRADED TO EQUAL WEIGHT FROM UNDERWEIGHT AT MORGAN STANLEY
  • CORE-MARK (CORE) UPGRADED TO STRONG BUY FROM OUTPERFORM AT RAYMOND JAMES
  • MCDONALD’S (MCD) UPGRADED TO OUTPERFORM FROM MARKET PERFORM AT BERNSTEIN
  • SERVISFIRST (SFBS) UPGRADED TO MARKET PERFORM FROM UNDERPERFORM AT HOVDE GROUP
  • STRATASYS (SSYS) UPGRADED TO OVERWEIGHT FROM NEUTRAL AT PIPER JAFFRAY

 

US Equity Downgrades

  • AMERICAN EAGLE (AEO) DOWNGRADED TO NEUTRAL FROM BUY AT B. RILEY
  • CORE-MARK (CORE) UPGRADED TO STRONG BUY FROM OUTPERFORM AT RAYMOND JAMES
  • CUMMINS (CMI) DOWNGRADED TO NEUTRAL FROM OVERWEIGHT AT PIPER JAFFRAY
  • DISH (DISH) DOWNGRADED TO NEUTRAL FROM OUTPERFORM AT MACQUARIE
  • PACCAR (PCAR) DOWNGRADED TO NEUTRAL FROM OVERWEIGHT AT PIPER JAFFRAY
  • TILLY’S (TLYS) DOWNGRADED TO NEUTRAL FROM BUY AT B. RILEY

 

US Equity Initiations

  • 58.COM (WUBA) INITIATED WITH A HOLD AT BENCHMARK
  • ALIBABA (BABA) INITIATED WITH A BUY AT BENCHMARK
  • ALTERYX (AYX) INITIATED WITH A BUY AT GOLDMAN SACHS
  • ALTERYX (AYX) INITIATED WITH A NEUTRAL AT JPMORGAN
  • ALTERYX (AYX) INITIATED WITH AN OUTPERFORM AT COWEN
  • ALTERYX (AYX) INITIATED WITH AN OUTPERFORM AT JMP SECURITIES
  • ALTERYX (AYX) INITIATED WITH AN OVERWEIGHT AT PACIFIC CREST
  • ARCONIC (ARNC) INITIATED WITH A NEUTRAL AT JPMORGAN
  • AUTOHOME (ATHM) INITIATED WITH A HOLD AT BENCHMARK
  • BAIDU (BIDU) INITIATED WITH A BUY AT BENCHMARK
  • BUCKEYE PARTNERS (BPL) INITIATED WITH A NEUTRAL AT GUGGENHEIM
  • CHANGYOU.COM (CYOU) INITIATED WITH A HOLD AT BENCHMARK
  • CHENIERE ENERGY (LNG) INITIATED WITH A BUY AT GUGGENHEIM
  • CHENIERE ENERGY PARTNERS (CQP) INITIATED WITH A NEUTRAL AT GUGGENHEIM
  • CHINA LODGING (HTHT) INITIATED WITH A BUY AT BENCHMARK
  • CLOROX (CLX) INITIATED WITH A HOLD AT JEFFERIES
  • COLGATE-PALMOLIVE (CL) INITIATED WITH A HOLD AT JEFFERIES
  • CTRIP.COM (CTRP) INITIATED WITH A BUY AT BENCHMARK
  • ELEVATE CREDIT (ELVT) INITIATED WITH A NEUTRAL AT COMPASS POINT
  • ENLINK MIDSTREAM PARTNERS (ENLK) INITIATED WITH A NEUTRAL AT GUGGENHEIM
  • ENTERPRISE PRODUCTS (EPD) INITIATED WITH A BUY AT GUGGENHEIM
  • FANG HOLDINGS (SFUN) INITIATED WITH A HOLD AT BENCHMARK
  • GLOBAL BLOOD THERAPEUTICS (GBT) INITIATED WITH A BUY AT SUNTRUST
  • HIMAX (HIMX) INITIATED WITH AN OUTPERFORM AT MACQUARIE
  • INTERPUBLIC GROUP (IPG) INITIATED WITH AN OUTPERFORM AT EVERCORE ISI
  • JD.COM (JD) INITIATED WITH A BUY AT BENCHMARK
  • KIMBERLY-CLARK (KMB) INITIATED WITH A HOLD AT JEFFERIES
  • LILIS ENERGY (LLEX) INITIATED WITH A BUY AT JOHNSON RICE
  • LINDBLAD EXPEDITIONS (LIND) INITIATED WITH AN OUTPERFORM AT IMPERIAL CAPITAL
  • MATCH GROUP (MTCH) INITIATED WITH A BUY AT JEFFERIES
  • MOMO (MOMO) INITIATED WITH A BUY AT BENCHMARK
  • NETEASE (NTES) INITIATED WITH A BUY AT BENCHMARK
  • NEW ORIENTAL EDUCATION (EDU) INITIATED WITH A BUY AT BENCHMARK
  • OMNICOM (OMC) INITIATED WITH AN IN LINE AT EVERCORE ISI
  • ONEOK (OKE) INITIATED WITH A BUY AT GUGGENHEIM
  • ONEOK (OKS) PARTNERS INITIATED WITH A NEUTRAL AT GUGGENHEIM
  • PLAINS ALL AMERICAN (PAA) INITIATED WITH A NEUTRAL AT GUGGENHEIM
  • SINA (SINA) INITIATED WITH A BUY AT BENCHMARK
  • SPLUNK (SPLK) INITIATED WITH A BUY AT BTIG
  • SYNACOR (SYNC) INITIATED WITH A BUY ON UPCOMING GROWTH AT CANACCORD
  • TAL (TAL) EDUCATION INITIATED WITH A BUY AT BENCHMARK
  • TALEND (TLND) INITIATED WITH A BUY AT BTIG
  • TARGA RESOURCES (TRGP) INITIATED WITH A NEUTRAL AT GUGGENHEIM
  • TERADATA (TDC) INITIATED WITH A NEUTRAL AT BTIG
  • VIMPELCOM (VIP) INITIATED WITH A BUY AT BENCHMARK
  • VMWARE (VMW) INITIATED WITH A NEUTRAL AT BTIG
  • WEIBO (WB) INITIATED WITH A BUY AT BENCHMARK
  • WESTERN GAS EQUITY (WGP) INITIATED WITH A BUY AT GUGGENHEIM
  • WESTERN GAS PARTNERS (WGP) INITIATED WITH A BUY AT GUGGENHEIM
  • YY (YY) INITIATED WITH A BUY AT BENCHMARK
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