In Asian Equity Markets  Japanese stocks rose on Wednesday as solid gains on Wall Street lifted sentiment, while Caterpillar’s brisk earnings whetted investors’ appetite for companies such as Komatsu and Hitachi Construction. The Nikkei index was up 0.5 percent at 20,048.62 at the end of morning trade. MSCI’s broadest index of Asia-Pacific stocks outside Japan was little changed. Australian stocks gained 1 percent with a smaller-than-expected rise in local inflation supporting views that interest rates will remain at record lows for some time to come.Shanghai shed 0.4 percent on lingering fears of further regulatory tightening, while South Korea’s KOSPI lost momentum after touching a record high the previous day and fell 0.3 percent.

 

In Currency Markets the dollar bobbed above a 13-month low against a basket of major currencies on Wednesday, as investors awaited the U.S. Federal Reserve’s policy statement for clues on the course of its next monetary tightening. Against the yen, the dollar was steady at 111.89 yen, holding gains after rising 0.7 percent on Tuesday. The euro held steady at $1.1647. On Tuesday, it rose as high as $1.17125, its highest since August 2015, and just a hair below a 2-1/2 year high, boosted by a stronger-than-expected German business survey.  The Australian dollar fell after data showed the country’s consumer inflation was surprisingly soft in the last quarter. The Aussie shed 0.5 percent to $0.7900.

 

In Commodities Markets oil prices firmed on Wednesday to hold near eight-week highs hit in the previous session, on expectations of a drawdown in U.S. stocks and as a rise in shale oil production shows signs of slowing. Brent crude futures rose 0.8 percent, to $50.61 a barrel, after rallying more than 3 percent on Tuesday. U.S. West Texas Intermediate futures climbed 1 percent, to $48.38 a barrel. U.S. crude stocks fell sharply last week as refineries boosted output, while gasoline inventories increased and distillate stocks decreased, data from industry group the American Petroleum Institute showed on Tuesday. Spot gold fell 0.1 percent to $1,246.94 per ounce and silver fell 0.7 percent to $16.35 per ounce.

 

In US Equity Markets  the S&P 500 climbed to an all-time high on Tuesday on a heavy day of corporate results highlighted by well-received reports from McDonald’s and Caterpillar and gains for bank shares. The Dow rose 0.47 percent, to 21,613.43, the S&P 500 gained 0.29 percent, to 2,477.08 and the Nasdaq Composite added 0.02 percent, to 6,412.17. Shares of McDonald’s rose 4.8 percent after the fast-food chain reported strong global sales. Caterpillar shares rose 5.9 percent after the heavy equipment maker raised its full-year outlook for the second time this year. Freeport-McMoRan Inc shares jumped 14.7 percent. Rising metal prices and progress in a permit dispute with Indonesia buoyed the world’s biggest-publicly traded copper miner.

 

In Bond Markets   Japanese government bond prices eased on Wednesday in sympathy with falls in U.S. bonds as markets awaited the U.S. Federal Reserve’s policy decision later in the day.  The benchmark 10-year JGB futures contract fell 0.15 point to 150.11 by late afternoon. The yield on the cash 10-year JGB rose 1.0 basis point to 0.075 percent. The 20-year JGB yield rose 1.0 basis point to 0.590 percent, while the 30-year yield ticked up 1.0 basis point to 0.860 percent.

 

 

Economic Calendar

• 09:30 GMT+1 UK Prelim GDP q/q
• 15:30 GMT+1 US Crude Oil Inventories
• 19:00 GMT+1 US FOMC Statement

 

US Equity Upgrades

• ATLASSIAN (TEAM) UPGRADED TO OVERWEIGHT FROM EQUAL WEIGHT AT MORGAN STANLEY
• BIG LOTS (BIG) UPGRADED TO BUY FROM HOLD AT DEUTSCHE BANK
• DSW (DSW) UPGRADED TO BUY FROM HOLD AT DEUTSCHE BANK
• MONDELEZ (MDLZ) UPGRADED TO OVERWEIGHT FROM NEUTRAL AT PIPER JAFFRAY
• SIERRA BANCORP (BSRR) UPGRADED TO OUTPERFORM FROM MARKET PERFORM AT RAYMOND JAMES
• SOUTH STATE (SSB) UPGRADED TO OUTPERFORM FROM MARKET PERFORM AT KEEFE BRUYETTE
• TOMPKINS (TMP) UPGRADED TO MARKET PERFORM FROM UNDERPERFORM AT KEEFE BRUYETTE
• WERNER (WERN) UPGRADED TO NEUTRAL FROM UNDERPERFORM AT BOFA/MERRILL

 

US Equity Downgrades

• AMERICAN EQUITY (AEL) DOWNGRADED TO IN LINE FROM OUTPERFORM AT EVERCORE ISI
• CYTORI THERAPEUTICS (CYTX) DOWNGRADED TO NEUTRAL FROM BUY AT B. RILEY
• LULULEMON (LULU) DOWNGRADED BASED ON VALUATION AT STIFEL
• LULULEMON (LULU) DOWNGRADED TO HOLD FROM BUY AT STIFEL
• MONOGRAM RESIDENTIAL TRUST (MORE) DOWNGRADED TO NEUTRAL FROM OUTPERFORM AT BAIRD
• POWER INTEGRATIONS (POWI) DOWNGRADED TO HOLD FROM BUY AT DEUTSCHE BANK
• SPECTRANETICS (SPNC) DOWNGRADED TO MARKET PERFORM FROM OUTPERFORM AT RAYMOND JAMES
• TEAM (TISI) DOWNGRADED TO EQUAL WEIGHT FROM OVERWEIGHT AT STEPHENS
• UNDER ARMOUR (UA) DOWNGRADED TO SELL FROM HOLD AT DEUTSCHE BANK
• WEBMD (WBMD) DOWNGRADED TO HOLD FROM BUY AT SUNTRUST
• WEBMD (WBMD) DOWNGRADED TO MARKET PERFORM FROM OUTPERFORM AT RAYMOND JAMES

 

US Equity Initiations

• 3D SYSTEMS (DDD) INITIATED WITH A HOLD AT LOOP CAPITAL
• APPLE (AAPL) INITIATED WITH A BUY AT LOOP CAPITAL
• BEMIS (BMS) INITIATED WITH A BUY AT UBS
• BERRY GLOBAL (BERY) INITIATED WITH A BUY AT UBS
• BLUE APRON (APRN) INITIATED WITH A BUY AT SUNTRUST
• BLUE BUFFALO PET PRODUCTS (BUFF) INITIATED WITH A NEUTRAL AT BAIRD
• BYLINE BANCORP (BY) INITIATED WITH A BUY AT BOFA/MERRILL
• BYLINE BANCORP (BY) INITIATED WITH A MARKET PERFORM AT KEEFE BRUYETTE
• BYLINE BANCORP (BY) INITIATED WITH AN OVERWEIGHT AT PIPER JAFFRAY
• E.L.F. BEAUTY (ELF) INITIATED WITH A BUY AT CITI
• ELECTRONICS FOR IMAGING (EFII) INITIATED WITH A BUY AT LOOP CAPITAL
• GLADSTONE (GOOD) INITIATED WITH A BUY AT DA DAVIDSON
• HORTONWORKS (HDP) INITIATED WITH A BUY AT NEEDHAM
• LOGITECH (LOGI) INITIATED WITH A BUY AT LOOP CAPITAL
• MIMECAST (MIME) INITIATED WITH A BUY AT NEEDHAM
• SEAGATE (STX) INITIATED WITH A BUY AT LOOP CAPITAL
• STRATASYS (SSYS) INITIATED WITH A HOLD AT LOOP CAPITAL
• TINTRI (TNTR) INITIATED WITH A BUY AT BOFA/MERRILL
• TINTRI (TNTR) INITIATED WITH A NEUTRAL AT PIPER JAFFRAY
• TINTRI (TNTR) INITIATED WITH AN OUTPERFORM AT RAYMOND JAMES
• TINTRI (TNTR) INITIATED WITH AN OUTPERFORM AT WILLIAM BLAIR
• TINTRI (TNTR) INITIATED WITH AN OVERWEIGHT AT KEYBANC
• U.S. PHYSICAL THERAPY (USPH) INITIATED WITH AN OVERWEIGHT AT CANTOR
• WESTERN DIGITAL (WDC) INITIATED WITH A BUY AT LOOP CAPITAL
• XEROX (XRX) INITIATED WITH A BUY AT LOOP CAPITAL