Day Traders Diary

10/17/13

U.S. equity futures hover in the red with the S&P 500 futures off 0.1%. Meanwhile, Dow futures trade lower by 0.4% as Goldman Sachs (GS 158.31, -3.94) and IBM (IBM 173.28, -13.35) weigh. The two top-weighted index components reported bottom-line beats, but both reported significant revenue misses. Goldman reported third quarter revenue $500 million below analyst expectations while IBM missed revenue estimates by $1 billion.

Looking at overnight developments:

Asian markets ended mixed. China's Shanghai Composite -0.2%, Hong Kong's Hang Seng -0.6%, and Japan's Nikkei +0.8%.
In regional economic data:
China's Foreign Direct Investment narrowed to 6.20% from 6.37%.
Australia's NAB Quarterly Business Confidence improved to 3.0 from -1.0.
Hong Kong's unemployment rate remained unchanged at 3.3%, as expected.
South Korea's PPI slipped 0.1% month-over-month (0.3% prior) while the year-over-year reading fell 1.8% (-1.3% previous).
Looking at news:
China's Dagong rating agency cut the U.S. sovereign debt rating to 'A-' from 'A' while maintaining a negative outlook.
In Japan, the Nikkei outperformed even as the yen strengthened, sending USDJPY below the 98.00 level. The pair currently trades near 97.90.
Major European indices trade lower across the board. Great Britain's FTSE -0.1%, France's CAC -0.3%, and Germany's DAX -0.4%. Elsewhere, Italy's MIB -0.7% and Spain's IBEX -0.1%.
Regional economic news was limited:
Eurozone current account surplus expanded to EUR17.40 billion from EUR15.50 billion (EUR17.70 billion forecast).
Great Britain's retail sales rose 0.6% month-over-month (0.4% expected, -0.8% prior) while the year-over-year reading increased 2.2% (2.1% forecast, 2.1% previous). Meanwhile, core retail sales rose 0.7% month-over-month (0.3% expected, -0.8% last) and improved 2.8% on a year-over-year basis (2.1% forecast, 2.3% prior).
In news:
Moody's commented on the Italian banking system, saying its outlook remains 'Negative.' On that note, Italy's MIB trails behind other regional indices with bank shares leading to the downside.
In U.S. corporate news:

American Express (AXP 76.20, -0.12): -0.2% despite beating on earnings on in-line revenue.
Baxter (BAX 65.00, -2.56): -3.8% following its in-line earnings and revenue.
eBay (EBAY 50.70, -2.82): -5.3% after its below-consensus fourth-quarter earnings and revenue guidance overshadowed its third-quarter earnings beat.
Select Comfort (SCSS 17.26, -6.94): -28.7% after missing on earnings, revenue, and guiding fourth-quarter earnings below consensus.
Supervalu (SVU 8.96, +0.56): +6.7% after beating on earnings and revenue.
UnitedHealth (UNH 73.00, -2.19): -2.9% following its in-line earnings report.
Verizon (VZ 48.99, +1.74): +3.7% following its bottom-line beat.
Weekly initial claims will be reported at 8:30 ET while September industrial production and capacity utilization will both be released at 9:15 ET. The day's data will be topped off with the 10:00 ET release of the October Philadelphia Fed survey.

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