Day Traders Diary


Equity futures point to strong gains at the open as the bulls look to recover yesterday's losses. Overnight, Japan's Nikkei (-0.2%) slipped back below the 13,000 mark before regaining the bulk of its losses amid a volatile session. Elsewhere, Australia's ASX (-0.7%) slipped into correction territory for the first time in a year as action is now 10% off the May high. Markets in China, Hong Kong, and Taiwan were closed for Dragon Boat Festival. In Europe, markets are mixed with Spain's IBEX (+1.6%) leading the way. Peripheral yields are seeing a big drop after yesterday's surge with Greece's 10-yr off 20 bps at 10.03% and Spain's 10-yr down 10 bps at 4.550%. Traders will continue to keep a watchful eye on Turkey, where the protests have cooled down for at least the time being. Turkey's ISE National 100 is higher by 1.4%. Shifting focus back to the U.S., AGYS, OXM, ULTA are names to watch following the release of their quarterly results...The following are the most important factors influencing the market this morning:

Asia: Nikkei -0.2%, Hang Seng CLOSED, Shanghai CLOSED

In regional economic data:

South Korea's unemployment rate ticked up to 3.2% from 3.1% (3.1% expected).

Japan's Corporate Goods Price Index rose 0.1% month-over-month (0.2% forecast, 0.3% prior) while the year-over-year reading climbed 0.6% (0.6% expected, 0.0% previous). In addition, core machinery orders fell 8.8% month-over-month (-8.5% forecast, 14.2% prior) while the year-over-year reading decreased 1.1% (-4.8% expected, 2.4% previous).

Australia's Westpac Consumer Sentiment was reported at 4.7% to follow the prior reading of -7.0%

Looking at news:

Reports from Nikkei News indicate Japan's Financial Services Agency is planning to implement a 'bail-in' policy should bank failures take place.

Europe: FTSE +0.2%, CAC +0.4%, DAX -0.1%, MIB -0.3%, IBEX +1.5%

Looking at economic data:

Eurozone industrial production rose 0.4% month-over-month (-0.2% expected, 0.9% prior).

French nonfarm payrolls declined 0.1% quarter-over-quarter (-0.1% expected, -0.1% prior). In addition, the country saw its CPI rise 0.1% month-over-month (0.3% expected, -0.2% prior).

German CPI increased 0.4% month-over-month, as expected. Meanwhile, the year-over-year reading ticked up 1.5%, which also met expectations.

Spanish CPI increased 0.2% month-over-month while the year-over-year reading rose 1.7%. Both figures met expectations.

Italian CPI was unchanged month-over-month (0.1% expected). ? The United Kingdom's claimant count declined by 8,600 (-5,000 expected, -11,800 prior) while the unemployment rate held steady at 7.8%. In addition, average earnings ex-bonus rose 0.9% (0.7% expected, 0.8% prior).

In news:

Bundesbank President Jens Weidmann said the European Central Bank's Outright Monetary Transactions (OMT) program blurs the line between fiscal and monetary policy. Note the German High Court is in its second day of debating the constitutionality of the bond buying program.

CTB is +38.6% after the co agreed to be acquired by Apollo Tyres for $35 per share. The transaction price represents a 42.5% premium to CTB's closing price from yesterday.

YUM discloses it sees May same-store sales -19% for the China Division; Q2 same store sales -20% for the China Division

FSLR announced public offering of 8.5 mln shares of common stock

WAG issues statement concerning DEA agreement: reached agreement to settle and resolve all administrative and civil matters; to pay $80 mln

NY state regulator is investigating life insurers for inflating books; says could lead to government bailout, according to reports

Earnings/guidance of interest:

ULTA +9% after co beats by $0.03, beats on revs; guides Q2 EPS, revs below consensus; reaffirms FY14 guidance.

OXM +1.6% after co beats by $0.04, misses on revs; guides Q2 EPS in-line, revs above consensus; reaffirms FY14 EPS guidance, lowers top end of FY14 rev guidance in-line

AGYS beats by $0.09, beats on revs (single estimate); sees positive FY14 adj. operating income

Select analyst actions of interest:

Upgrades: RVBD upgraded to Buy from Neutral at Lazard, TSLA price target raised to $118 from $70 at Robert W. Baird, LEN upgraded to Outperform from Mkt Perform at Keefe Bruyette, AEP upgraded to Buy from Neutral at Sun Trust Rbsn Humphrey, PRGO initiated with a Overweight at Morgan Stanley, POR upgraded to Neutral from Underperform at Macquarie

Downgrades: LM downgraded to Sell from Neutral at Goldman, BIIB downgraded to Neutral from Buy at Citigroup, DF downgraded to Mkt Perform from Outperform at Bernstein

Technical factors: The market was due for a period of corrective trade given the aggressive recovery into Monday morning and thus far the S&P has held near the 50% retrace of the recovery and Friday's bull gap low at 1623/1622. A continued hold at/near this area short term and a sustained push back through the 1632/1634 zone would help improve this week's weaker bias.

Looking ahead: The U.S. Treasury will reopen $21 bln 10-yr notes ahead of the release of its May budget at 14:00 ET. HRB, MW, PVH are among the names to report following the closing bell while CASY, RH will release their earnings ahead of tomorrow's open.

All comments contained herein are for informational purposes only, and should not be considered as a solicitation to buy or sell any security. The firm does not guarantee the accuracy or completeness of the information or make any warranties regarding results from it's usage.