Day Traders Diary

5/4/17

Equity futures are drifting higher this morning following reports that the House will vote on health care reform today. The S&P 500 futures trade six points above fair value.

After pulling their first attempt at health care reform back in March, GOP leaders went back to the drawing board in an attempt to satisfy the more conservative House Republicans without losing moderate party members. House Majority Leader Kevin McCarthy says those efforts have proved successful, however, even if the revised bill makes it out of the House today, it will still need to be approved by the Senate, which is likely to be a challenge.

Nonetheless, a victory in the House would be an encouraging sign for investors, who have grown somewhat skeptical of the Trump administration's ability to deliver on its pro-growth agenda.

In the bond market, U.S. Treasuries trade lower this morning with the benchmark 10-yr yield (2.34%) adding two basis points. Meanwhile, crude oil shows a solid loss, down 1.2% at $47.25/bbl.

On the data front, investors will receive a slew of reports today, including March Trade Balance (Briefing.com consensus -$44.4 billion), Initial Claims (Briefing.com consensus 246,000), and the preliminary reading of first quarter Productivity (Briefing.com consensus 0.1%) and Unit Labor Costs (Briefing.com consensus 2.6%) at 8:30 ET. March Factory Orders (Briefing.com consensus 0.4%) will cross the wires a little later at 10:00 ET.

In U.S. corporate news:

Facebook (FB 149.25, -2.55): -1.7% despite beating top and bottom line estimates.

Tesla (TSLA 305.00, -6.02): -1.9% after reporting worse than expected earnings. Also of note, TSLA reaffirmed 1H production and noted the Model 3 is on track for initial production in July.

Kraft Heinz (KHC 87.70, -1.44): -1.6% after missing top and bottom line estimates.

Reviewing overnight developments:

Equity indices in the Asia-Pacific region ended on a mostly lower note while Japan's Nikkei was closed for a holiday once again. Hong Kong's Hang Seng -0.1%, China's Shanghai Composite -0.3%, India's Sensex +0.8%.

In economic data:

China's April Caixin Services PMI 51.5 (expected 52.6; last 52.2)

Australia's March HIA New Home Sales -1.1% month-over-month (last 0.2%). March trade surplus narrowed to AUD3.11 billion from AUD3.66 billion (expected surplus of AUD3.40 billion). March Imports +5.0% month-over-month (last -5.0%) and March Exports +2.0% month-over-month (last 1.0%). ANZ Commodity Price Earnings -0.2% month-over-month (last 0.4%)

India's April Nikkei Services PMI 50.2 (last 51.5)

In news:

News was limited in the Asia-Pacific region.

Major European indices trade higher across the board with Italy's MIB in the lead. UK's FTSE +0.4%, Germany's DAX +0.9%, France's CAC +1.0%, Italy's MIB +1.6%.

In economic data:

Eurozone March Retail Sales +0.3% month-over-month (expected 0.1%; last 0.5%); +2.3% year-over-year (consensus 2.1%; last 1.7%). April Services PMI 56.4 (expected 56.2; last 56.2)

Germany's April Services PMI 55.4 (expected 54.7; last 54.7)

UK's April Services PMI 55.8 (expected 54.5; last 55.0). March BoE Consumer Credit GBP1.62 billion (expected GBP1.30 billion; last GBP1.48 billion) and Net Lending to Individuals GBP4.70 billion (expected GBP4.50 billion; last GBP4.90 billion)

France's April Services PMI 56.7 (expected 57.7; last 57.7)

Italy's April Services PMI 56.2 (expected 53.5; last 52.9)

Spain's April Services PMI 57.8 (expected 57.9; previous 57.4) and Unemployment Change -129,300 (expected 21,300; last -48,600)

Swiss Q2 SECO Consumer Climate -8 (expected 3; last -3)

In news:

British Prime Minister Theresa May has accused politicians from the European Union of trying to disrupt the upcoming election and the official Brexit negotiations.

Greek Prime Minister Alexis Tsipras said that exiting the bailout program is the top priority for Greece and that debt measures must be specified before the Eurogroup meeting on May 22.