Day Traders Diary

4/26/17

 The stock market is set for a flat opening this morning as investors await the latest tax-related announcement from Washington. The S&P 500 futures trade in line with fair value.

Earlier this morning, Treasury Secretary Steven Mnuchin confirmed that President Trump's tax plan, which will be unveiled this afternoon, will call for a 15.0% corporate tax rate, down from the current level of 35.0%. In addition, reports indicate the president's plan will allow multinational corporations to bring overseas profits back to the U.S. at a tax rate of 10.0% (from 35.0%).

There are concerns about the impact that the tax cut will have on the national debt, especially in light of reports that say the president will not be seeking a border-adjustment tax to offset the decrease in revenue. The worries highlight the fact that Mr. Trump's proposal will have a challenging path through Capitol Hill, but, nonetheless, it will provide a good baseline for negotiations. 

On the earnings front, several Dow components have reported their quarterly results this morning, including Boeing (BA 181.15, -2.36), Procter & Gamble (PG 89.40, -0.60), and United Technologies (UTX 117.80, +0.93). United Technologies trades higher by 0.8% in pre-market action after beating top and bottom line estimates. However, Boeing and Procter & Gamble have slipped 1.1% and 0.7%, respectively, after coming up short in the area of revenues; BA missed top-line estimates while PG issued slightly disappointing revenue guidance. 

Crude oil is under some selling pressure this morning after the API's weekly inventory report showed a build of 0.9 million barrels while the consensus called for a draw of 1.3 million barrels. WTI crude currently trades 0.9% lower at $49.10/bbl, however, the commodity will have a chance at redemption later this morning, at 10:30 ET, when the EIA delivers its weekly inventory report.

Like the equity futures market, the bond market trades flat in early action. The benchmark 10-yr yield is unchanged at 2.33%. Meanwhile, the U.S. Dollar Index (99.03, +0.31) is on track for its first win of the week, up 0.3%.

On the data front, the weekly MBA Mortgage Applications Index increased 2.7% to follow last week's 1.8% decrease. Investors will not receive any more economic data on Wednesday.