US EQUITY OPEN: Indices see two-way trade post-CPI as Tech rout takes a breath

OPEN: US indices initially extended the sell-off seen on Tuesday, with two-way trade seen in equity futures after the US CPI report, although have pared a lot of weakness since the open. All in all, core M/M was softer than anticipated, while other metrics were in line with expectations, although Y/Y figures accelerated from the prior. Middle East tensions escalated once again overnight, as the US launched fresh strikes on Iran in response to the downing of an Apache helicopter, and Iran responded with attacks on US bases in Bahrain, Kuwait and Jordan. Even further, Trump today on Truth said Iran has taken too long to negotiate a deal, now they will have to pay the price. WTI and Brent are seeing gains of c. USD 1/bbl and on USD 89/bbl and 92/bbl handles, respectively, and helping Energy reside as the outperforming sector. Overall, sectors are mixed with Technology once again in the red, and comes after big Asia tech names sold off overnight following the US weakness on Tuesday. The Dollar is weaker with G10 FX peers benefitting, as the CAD saw little move in wake of BoC, which was unchanged, as expected. Yen is flat as USD/JPY continues to hover above 160 ahead of BoJ next week. Treasuries are marginally firmer ahead of the 10yr note auction, with precious metals in the red and spot gold seeing greater losses than its counterpart. Oracle earnings after-hours will be closely watched. 

STOCK SPECIFICS:

• Super Micro Computer (SMCI) launched USD 7bln equity raise
• Cracker Barrel (CBRL) raised FY rev. & adj. EBITDA outlook.
• Amazon (AMZN) expanded its LTL freight offering to all destinations in the US. Of note for Old Dominion (ODFL), Saia (SAIA), XPO (XPO) and ArcBest (ARCB).
• Nike (NKE) downgraded at RBC to 'Sector Perform' from 'Outperform'
• Illumina (ILMN) upgraded at JPMorgan to 'Overweight' from 'Neutral'
• Summit Therapeutics (SMMT) commenced an underwritten public offering of USD 500mln of common stock, with all shares offered by the company.