Day Traders Diary

10/13/16

U.S. equity futures trade on a higher note with the S&P 500 futures trading nine points above fair value. Global markets followed Wall Street's lead last evening, reversing course after mulling yesterday's disappointing trade data out of China. The rebound effort has benefited from a reversal of fortune, as better-than-expected inflation data out of China underpins the move. The country reported that September PPI rose 0.1% year-over-year (expected -0.3%) while CPI has increased 1.9% (expected: +1.6%) over that time.

On the home front, Dow component JPMorgan Chase (JPM 68.85, +1.11, +1.6%) has also bolstered the broader market. The stock is on the rise after beating quarterly estimates. Participants will here results from peers Citigroup (C 49.15, +0.68, +1.4%) and Wells Fargo (WFC 45.25, +0.50, +1.1%) later in the morning. Separately, Fed Chair Janet Yellen is slated to deliver a speech on "Macroeconomic Research After the Crisis" at 12:30 p.m. ET. Investors will be looking for further clues regarding the speed and timing of future fed funds rate hikes.

Treasuries trade on a lower note with the short end of the curve underperforming. The yield on the benchmark 10-yr note has risen by one basis point to 1.78%.

Today's data will include the 8:30 a.m. ET release of the PPI Report for September (Briefing.com consensus +0.2%) and the Retail Sales Report for September (Briefing.com consensus +0.6%). Separately, Business Inventories for August (Briefing.com consensus +0.1%) and the initial reading of the University of Michigan Consumer Sentiment Index for October (Briefing.com consensus 92.4) will both cross the wires at 10:00 ET.

In U.S. corporate news of note:

JPMorgan Chase (JPM 68.85, +1.11): +1.6% after topping analysts' estimates for the quarter

HP (HPQ 14.89, -0.26): -1.7% following the company guiding FY17 earnings in-line with estimates and announcing restructuring that will include 3,000-4,000 layoffs

Infosys (INFY 15.62, -1.03): -6.2% as disappointing FY17 constant currency revenue growth estimates mask a bottom-line beat

PNC (PNC 88.00, +0.06): +0.1% after beating bottom-line estimates for the quarter on in-line revenue

Reviewing overnight developments:

Asia-Pacific indices ended the week mostly higher with Hong Kong's Hang Seng (+0.9%) leading Japan's Nikkei (+0.5%) and China's Shanghai Composite (+0.1%).

In economic data:

Japan's Sep Japan Money Stock M3: +3.1% vs +2.9%e; Sep Domestic Corporate Goods Price Index: 0.0% vs +0.1%e

China's Sep CPI: +1.9% vs +1.6%e; Sep PPI: +0.1% vs -0.3%e

In news:

Positive inflation data out of China contributed to the positive tone.

Weakness in the yen also contributed to strength in Japan's Nikkei (+0.5%).

The dollar/yen pair trades higher by 0.6% (104.33).

European indices trade on a higher note with France's CAC (+1.9%) leading Germany's DAX (+1.5%) and the UK's FTSE (+0.7%).

In economic data:

Eurozone trade balance for August EUR 18.4 bln (expected EUR 15.3 bln; prior EUR 25.3 bln)

Spain CPI for September (second estimate) 0.0% month-over-month (expected +0.1%; prior +0.1%); +0.2% year-over-year (expected +0.3%; prior +0.3%)

Italy CPI for September (second estimate) -0.2% month-over-month (expected -0.2%; prior -0.2%); +0.1% year-over-year (expected +0.1%; prior +0.1%)

Switzerland PPI for September +0.3% month-over-month (expected +0.1%; prior -0.3%); -0.1% year-over-year (expected -0.2%; prior -0.4%)

In news:

Early enthusiasm has been linked to reassuring inflation data out of China.

The European Automobile Manufacturers' Association also reported that new passenger car registrations for September rose 6.5% year-over-year.

The euro is down 0.5% against the dollar (1.1003)

Upbeat quarterly results from JPMorgan Chase (JPM) have also underpinned.