Day Traders Diary

9/9/13

Equity futures points to slim gains at the open as the S&P 500 looks for its seventh gain in the past eight sessions. Friday's session was bookended by the 50- (1665) and 100-day (1642) moving averages so traders will be watching those levels closely.

It was a sea of green across Asia as all of the major bourses ended with gains. China's Shanghai Composite (+3.4%) posted a strong advance after the latest trade data showed exports jumped 7.2% YoY (5.5% YoY expected). Imports were light, posting a 7.0% YoY advance. However, the Shanghai Composite was not the top gainer as that title went to Thailand's SET (+3.6%). Elsewhere, Japan's Nikkei (+2.5%) surged following the revised second quarter reading of 3.8% YoY (2.6% YoY expected), and on word Tokyo would host the 2020 Olympics. The Australian election saw the conservatives take power for the first time in six years as Tony Abbott was elected prime minister. India's Sensex was closed for Ganesh Chaturthi.

In Europe, most of the major averages trade in the red with Italy's MIB (+0.3%) outperforming. Spain's IBEX (-0.7%) is the laggard after Madrid lost out on the 2020 Olympics. Debt markets across the region hold little changed with most yields flat to off just 1 bp.

Bringing focus back to the U.S., a recent bid has lifted Treasuries to session highs. Today;s solid advance has the benchmark 10-yr yield off 5 bps and below 2.890%. Meanwhile, the Dollar Index is on session lows with trade testing support in the 82.00 area. Notable is the greenback's weakness against the British pound (GBPUSD +65 pips @ 1.5700) and Canadian dollar (USDCAD -50 pips @ 1.0365). HITK, HOV 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 +2.5%, Hang Seng +0.6%, Shanghai Composite +3.4%

In regional economic data:

China reported a trade surplus of $28.61 billion ($20.00 billion expected, $17.82 billion prior) as imports rose 7.0% year-over-year (11.3% forecast, 10.9% previous) and exports increased 7.2% year-over-year (6.0% consensus, 5.1% prior). Separately, CPI increased 0.5% month-over-month (0.4% forecast, 0.1% last) while the year-over-year reading rose 2.6% (2.6% expected, 2.7% previous). Also, PPI fell 1.6% year-over-year (-1.8% consensus, -2.3% prior).

Japan's second quarter GDP was revised up to 0.9% from 0.6%, as expected. GDP Price Index fell 0.5% year-over-year (-0.3% expected, -0.3% last) and bank lending rose 2.0% year-over-year (2.0% prior). In addition, the current account surplus was reported at JPY0.58 trillion (JPY0.49 trillion consensus, JPY0.34 trillion previous) and the adjusted current account surplus came in at JPY0.33 trillion (JPY0.32 trillion expected, JPY0.65 trillion last). Lastly, the Household Confidence Index fell to 43.0 from 44.3 (44.3 expected) and the Economy Watchers Current Index slipped to 51.2 from 52.3 (53.8 forecast).

Australia's ANZ Job Advertisements fell 2.0% month-over-month (-1.1% prior) and home loans increased 2.4% month-over-month (2.0% consensus, 2.6% previous).

New Zealand's manufacturing sales fell 3.4% quarter-over-quarter (-0.9% prior).

Looking at news:

Tokyo secured its bid to host the 2020 Summer Olympics even after Friday rumors suggested Madrid had edged out the Japanese capital. I

n Australia, Coalition leader Tony Abbott was elected as the new prime minister.

Markets in China rallied following the release of better-than-expected trade data from the Middle Kingdom.

Europe: FTSE -0.5%, CAC -0.6%, DAX -0.1%, MIB +0.3%, IBEX -0.7%

Participants received a handful of data:

Eurozone Sentix Investor Confidence rose to 6.5 from -4.9 (-2.8 expected).

Swiss unemployment held steady at 3.2% on a seasonally-adjusted basis (3.2% expected) while the unadjusted rate also remained unchanged at 3.0% (3.0% forecast). Separately, retail sales rose 0.8% year-over-year (3.2% expected, 2.3% prior).

In news:

In Italy, a parliamentary committee has begun debating whether PDL leader Silvio Berlusconi should be allowed to remain in the Senate after he was found guilty of tax fraud. The deliberations are expected to extend past today and Mr. Berlusconi's party has threatened to withdraw from Senate should their leader be banned from holding office.

SGNT announces offering of 4,441,627 shares of common stock (1,057,530 shares by selling shareholders)

GRPN acquires last-minute travel app Blink; terms not disclosed

NVTL announces restructuring initiatives; Cost savings will be achieved through the consolidation of one of the company's development sites and certain manufacturing and other activities, which the company expects to result in a headcount reduction of approximately 75 to 80 employees.

Dril-Quip DRC may be possible takeover targets by GE, according to reports (Bloomberg Real M&A column)

CMRX announced initiation of dosing in the Phase 3 SUPPRESS trial BLRX's BL-8040 receives Orphan Drug Designation for treatment of AML

Earnings/guidance of interest:

PDLI sees Q3 revs in-line with consensus; sees Q3 (Sep) revs of ~$97 mln vs. $97.91 mln Capital IQ Consensus Estimate.

MNDL sees Q2 and FY14 revs above consensus; sees FY14 Adj EBITDA of breakeven before end of the FY

HSOL misses Q2 shipment guidance; lowers FY13 shipment guidance

CCJ provided update on the Cigar Lake project; co will not meet its forecast production of 300,000 pounds U3O8 from Cigar Lake during 2013

Select analyst actions of interest:

Upgrades: BRCD upgraded to Outperform from Sector Perform at RBC Capital Markets, EXPE upgraded to Buy from Neutral at Lazard, LFL upgraded to Strong Buy from Outperform at Raymond James, MDC upgraded to Neutral from Sell at Citigroup, TPRE several initiations, ZQK upgraded to Outperform from Neutral at Credit Suisse, IPAR upgraded to Buy at B. Riley, BTI upgraded to Buy from Neutral at BofA/Merrill, NTAP upgraded to Buy from Neutral at UBS

Downgrades: ROC downgraded to Hold from Buy at Deutsche Bank

Technical factors: The S&P ended the holiday shortened week with a solid gain (+23) to close back at its 4 wk/12 wk ema (1655). On a weekly basis, however, it formed a neutral inside week and on a daily basis it still appears to be forming a rising channel (choppy recovery) that stalled at its 50 day sma near 1665 (session high 1664.83). Short term supports are at 1652/1651 and 1648/1647. Resistance is at 1659/1660 prior to the high and 50 day (1664/1665).

Looking ahead: Consumer credit will cross the wires at 3 pm. CASY, HDS, PVH highlights releases following the closing bell while CBK, MIXT are due out 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.