Day Traders Diary

8/28/14

U.S. equity futures hold losses amid cautious action overseas. The S&P 500 futures trade eight points below fair value with the bulk of the weakness coming after Ukraine's President Petro Poroshenko was quoted as saying Russian forces have invaded an area southeast of Donetsk. The news sent futures to lows around 6:00 ET, but a portion of that loss has been recovered after a correction to reports indicated Ukraine's President did not use the word "invade," but rather said Russian troops "entered" Ukraine. The change to the wording gave futures a two-point boost off the lows.

On the economic front, weekly Initial Claims (Briefing.com consensus 302,000) and the second estimate of Q2 GDP (expected 4.0%) will be released at 8:30 ET, while the Pending Home Sales report for July (consensus 0.5%) will cross the wires at 10:00 ET.

Treasuries hold gains with the 10-yr yield down two basis points at 2.34%.

In U.S. corporate news of note:

Abercrombie & Fitch (ANF 41.30, -2.70): -6.1% after its disappointing revenue and light comparable store sales masked better than expected earnings.
Dollar General (DG 63.00, -0.70): -1.1% following in-line results.
Guess? (GES 23.30, -2.34): -9.1% after missing estimates and guiding below consensus.
Rock-Tenn (RKT 57.64, +9.65): +20.1% after reporting better than expected results.
Signet Jewelers (SIG 108.56, +0.53): +0.5% after beating revenue estimates.
Williams-Sonoma (WSM 67.05, -7.84): -10.5% after its below-consensus guidance overshadowed in-line earnings.
Workday (WDAY 91.25, +0.95): +1.1% in reaction to better than expected results and guidance.
Reviewing overnight developments:

Asian markets ended lower. Japan's Nikkei -0.5%, China's Shanghai Composite -0.6%, and Hong Kong's Hang Seng -0.7%
In economic data:
Australia's HIA New Home Sales fell 5.7% month-over-month (prior 1.2%), while Private New Capital Expenditure increased 1.1% quarter-over-quarter (consensus -0.3%; prior -2.5%)
Hong Kong's Retail Sales fell 3.1% year-over-year (expected -2.5%; last -6.9%)
In news:
Property-related stocks remained under pressure in China with Vanke falling 1.5%.
Major European indices trade lower across the board. Great Britain's FTSE -0.4%, France's CAC -0.8%, and Germany's DAX -1.4%. Elsewhere, Spain's IBEX -1.3% and Italy's MIB -1.7%
Economic data was plentiful:
Eurozone Business and Consumer Survey fell to 100.6 from 102.1 (expected 101.5). Loan creation remained problematic as M3 Money Supply expanded 1.8% year-over-year (expected 1.5%; prior 1.6%), while Private Loans fell 1.6% (consensus -1.5%; last -1.8%)
Germany's Claimant Count increased by 2,000 (expected -5,000; prior -11,000), while the Unemployment Rate held steady at 6.7%, as expected
Great Britain's CBI Distributive Trades Survey jumped to 37 from 21 (expected 27)
Italy's Retail Sales were unchanged month-over-month (expected -0.2%; prior -0.6%), while Business Confidence fell to 95.7 from 99.1 (expected 99.3)
Spain's GDP growth was left unrevised at 0.6% quarter-over-quarter, as expected. Separately, CPI fell 0.5% (expected -0.2%; last -0.3%)
Among news of note:
The confusion surrounding a Russian incursion into Ukraine has caused participants to seek safety. A strong bid for Germany's 10-yr Bunds has dropped the yield to a new record low of 0.87%. Germany's 10-yr yield has inched up to 0.89% since notching a low during the past two hours.

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