In Asian Equity Markets Japanese stocks fell on Wednesday morning after the dollar eased against the yen on weak U.S. economic data, while financials stocks underperformed hit by lower U.S. yields. The Nikkei index fell 0.5 percent to 19,817.68 in mid-morning trade. The broader Topix shed 0.4 percent to 1,577.34 and the JPX-Nikkei Index 400 declined 0.5 percent to 14,073.42. MSCI’s broadest index of Asia-Pacific stocks outside Japan fell 0.5 percent. Hong Kong’s Hang Seng Index edged up 0.06 percent, but the Shanghai Composite inched down the same amount.

 

In Currency Markets the dollar nursed its losses on Wednesday after taking a hit from solid eurozone economic data, a fall in U.S. yields on heightened turmoil in Washington and downbeat housing data that reduced expectations of a Federal Reserve rate hike next month. The dollar skidded 0.5 percent to one-week lows against its perceived safe-haven Japanese counterpart and last stood at 112.56 yen. The Swiss franc gained 0.2 percent against the dollar to 0.9838 franc per dollar. The euro added 0.1 percent to $1.10965 after earlier touching $1.1098, its highest since November. Against the resurgent Japanese currency, the euro declined 0.4 percent to 124.88.

 

In Commodities Markets oil prices fell on Wednesday after data showed an increase in U.S. crude inventories, stoking concerns that markets remain oversupplied despite efforts by top producers Saudi Arabia and Russia to extend output cuts. Brent crude was down 0.8 percent, from the last close at $51.24 per barrel. U.S. West Texas Intermediate crude was at $48.21, down 0.9 percent. U.S. crude oil inventories rose by 882,000 barrels in the week ending May 12 to 523.4 million, compared with analyst expectations for a decrease of 2.4 million barrels, data from industry group the American Petroleum Institute (API) showed on Tuesday. The gold rose 0.5 percent to $1,242.6 per ounce.

 

In US Equity Markets  the S&P 500 and the Dow ended Tuesday’s session flat after mixed economic data and retail earnings, while the Nasdaq had another record close with help from technology stocks. The Dow Jones Industrial Average closed down 0.01 percent, to 20,979.75, and the S&P 500 lost 0.07 percent, to 2,400.67. The Nasdaq Composite added 0.33 percent, to 6,169.87. UnitedHealth and Pfizer were the S&P’s biggest drags. Pfizer fell 1.6 pct to $32.60 after Citigroup downgraded the drug developer’s stock to “sell,” from “neutral.” Home improvement chain Home Depot reported a better-than-expected first-quarter performance, but TJX Cos Inc  posted slowing comparable-store sales growth and a disappointing current-quarter profit forecast.

 

In Bond Markets Japanese government bond prices were steady on Wednesday, with cooling investor risk appetite and a debt-buying operation by the Bank of Japan shoring up the market. Overnight gains by U.S. Treasuries also supported JGBs. The benchmark 10-year JGB yield and the 30-year yield were unchanged at 0.040 percent and 0.835 percent, respectively. The central bank purchased a total of 1.03 trillion yen ($9.16 billion) of JGBs of one- to 25-years in maturities at its regular buying operation on Tuesday.

 

 

Economic Calendar

• 09:30 GMT+1 UK Average Earnings Index 3m/y
• 13:30 GMT+1 CAD Manufacturing Sales m/m
• 15:30 GMT+1 US Crude Oil Inventories

 

US Equity Upgrades

• AIG (AIG) UPGRADED TO OVERWEIGHT FROM EQUAL WEIGHT AT MORGAN STANLEY
• COUSINS PROPERTIES (CUZ) UPGRADED TO OUTPERFORM FROM NEUTRAL AT BAIRD
• CRANE (CR) UPGRADED TO BUY FROM HOLD AT CANACCORD
• DELEK US (DK) UPGRADED TO BUY FROM NEUTRAL AT GOLDMAN SACHS
• DR PEPPER SNAPPLE (DPS) UPGRADED TO OVERWEIGHT FROM EQUAL WEIGHT AT MORGAN STANLEY
• FORUM ENERGY (FET) UPGRADED TO NEUTRAL FROM UNDERWEIGHT AT JPMORGAN
• LGI HOMES (LGIH) UPGRADED TO MARKET PERFORM FROM UNDERPERFORM AT WELLS FARGO
• REGAL ENTERTAINMENT (RGC) UPGRADED TO BUY FROM HOLD AT LOOP CAPITAL
• RPM (RPM) UPGRADED TO BUY FROM NEUTRAL AT SEAPORT GLOBAL
• TECHNIPFMC (FTI) UPGRADED TO MARKET PERFORM FROM UNDERPERFORM AT BERNSTEIN
• TRIUMPH GROUP (TGI) UPGRADED TO OUTPERFORM FROM UNDERPERFORM AT BAIRD
• WEINGARTEN REALTY (WRI) UPGRADED TO OUTPERFORM FROM NEUTRAL AT BAIRD

 

US Equity Downgrades

• CHURCH & DWIGHT (CHD) DOWNGRADED TO UNDERWEIGHT FROM EQUAL WEIGHT AT MORGAN STANLEY
• FORTERRA (FRTA) DOWNGRADED TO HOLD FROM BUY AT SUNTRUST
• M.D.C. HOLDINGS (MDC) DOWNGRADED TO UNDERPERFORM FROM MARKET PERFORM AT WELLS FARGO
• MERCADOLIBRE (MELI) DOWNGRADED TO NEUTRAL FROM OVERWEIGHT AT JPMORGAN
• NANTKWEST (NK) DOWNGRADED TO SELL FROM NEUTRAL AT CITI
• PFIZER (PFE) DOWNGRADED TO SELL FROM NEUTRAL AT CITI
• VALERO (VLO) DOWNGRADED TO NEUTRAL FROM BUY AT GOLDMAN SACHS

 

US Equity Initiations

• ABBOTT (ABT) INITIATED WITH A NEUTRAL AT GOLDMAN SACHS
• ALDER BIOPHARMACEUTICALS (ALDR) INITIATED WITH A BUY AT NEEDHAM
• BAXTER (BAX) INITIATED WITH A CONVICTION BUY AT GOLDMAN SACHS
• BOSTON SCIENTIFIC (BSX) INITIATED WITH A NEUTRAL AT GOLDMAN SACHS
• BUILDERS FIRSTSOURCE (BLDR) COVERAGE ASSUMED WITH AN OUTPERFORM AT WEDBUSH
• C&J ENERGY SERVICES (CJ) INITIATED WITH A BUY AT CITI
• CHEFS’ WAREHOUSE (CHEF) INITIATED WITH A BUY AT LOOP CAPITAL
• CORE-MARK (CORE) INITIATED WITH A BUY AT LOOP CAPITAL
• EAGLE POINT CREDIT (ECC) INITIATED WITH AN OUTPERFORM AT OPPENHEIMER
• EDWARDS LIFESCIENCES (EW) INITIATED WITH A CONVICTION BUY AT GOLDMAN SACHS
• ENERGY TRANSFER EQUITY, ENERGY TRANSFER PARTNERS (ETE) (ETP) INITIATED AT BERNSTEIN
• ENTERPRISE PRODUCTS (EPD) INITIATED WITH AN OUTPERFORM AT BERNSTEIN
• HOSTESS BRANDS (TWNK) INITIATED WITH AN OVERWEIGHT AT STEPHENS
• INTUITIVE SURGICAL (ISRG) INITIATED WITH A BUY AT GOLDMAN SACHS
• KINDER MORGAN (KMI) INITIATED WITH A MARKET PERFORM AT BERNSTEIN
• KROGER (KR) INITIATED WITH A HOLD AT LOOP CAPITAL
• LAMB WESTON (LW) INITIATED WITH A BUY AT BERENBERG
• MEDTRONIC (MDT) INITIATED WITH A NEUTRAL AT GOLDMAN SACHS
• PERFORMANCE FOOD GROUP (PFGC) INITIATED WITH A BUY AT LOOP CAPITAL
• PINNACLE FOODS (PF) INITIATED WITH A BUY AT BERENBERG
• SAGE THERAPEUTICS (SAGE) INITIATED WITH A BUY AT NEEDHAM
• SELECT ENERGY SERVICES (WTTR) INITIATED WITH A NEUTRAL AT JPMORGAN
• SELECT ENERGY SERVICES (WTTR) INITIATED WITH AN OVERWEIGHT AT PIPER JAFFRAY
• SELECT ENERGY SERVICES INITIATED (WTTR) WITH AN OUTPERFORM AT FBR CAPITAL
• SPECTRA ENERGY PARTNERS (SEP) INITIATED WITH A MARKET PERFORM AT BERNSTEIN
• SPROUTS FARMERS MARKET (SFM) INITIATED WITH A HOLD AT LOOP CAPITAL
• STRYKER (SYK) INITIATED WITH A NEUTRAL AT GOLDMAN SACHS
• SUNOCO LOGISTICS (SXL) INITIATED WITH AN UNDERPERFORM AT BERNSTEIN
• SYSCO (SYY) INITIATED WITH A BUY AT LOOP CAPITAL
• UNITED NATURAL FOODS (UNFI) INITIATED WITH A BUY AT LOOP CAPITAL
• US FOODS (USFD) INITIATED WITH A HOLD AT LOOP CAPITAL
• VARIAN MEDICAL (VAR) INITIATED WITH A NEUTRAL AT GOLDMAN SACHS
• WHOLE FOODS (WFM) INITIATED WITH A HOLD AT LOOP CAPITAL
• WILLIAMS, WILLIAMS PARTNERS (WMB) (WPZ) INITIATED WITH OUTPERFORM RATINGS AT BERNSTEIN
• ZIMMER BIOMET (ZBH) INITIATED WITH A SELL AT GOLDMAN SACHS