Day Traders Diary

8/2/17

Nasdaq futures are trading solidly above fair value this morning, up 35 points or 0.7%, following Apple's (AAPL 158.58, +8.53) upbeat earnings report, which was released following yesterday's closing bell. Meanwhile, the S&P 500 futures trade flat, in line with fair value.

Apple is trading higher by 5.7% in pre-market action after the tech titan beat both top and bottom line estimates. iPhone sales--the company's biggest source of revenue--met expectations and it appears that the much-anticipated iPhone 8 is still on track to launch this year. Apple looks poised to open Wednesday at a fresh all-time high, further extending its already massive year-to-date advance of 29.6%.

The ADP National Employment Report for July (Briefing.com consensus 187K), which precedes Friday's more influential Employment Situation Report for July (Briefing.com consensus 181K), will cross the wires at 8:15 ET this morning. Investors will take the ADP reading with a grain of salt as it has deviated sharply from the official government reading in the past.

Today's only other economic report--the weekly MBA Mortgage Applications Index--crossed the wires earlier this morning, showing a decrease of 2.8% to follow last week's 0.4% increase.

Crude oil is hovering just a tick below its unchanged mark, down 0.1% at $49.09/bbl, after the American Petroleum Institute (API) reported a build of 1.8 million barrels on Tuesday evening. The reading was a disappointment as the consensus called for a draw of 2.9 million barrels. The Department of Energy will release its weekly inventory figures, which often conflict with the API reading, at 10:30 ET.

U.S. Treasuries have given back a portion of yesterday's sizable advance this morning while the U.S. Dollar Index (92.87, -0.04) trades flat, hovering near a 15-month low. The benchmark 10-yr yield is up two basis points at 2.27%.

In U.S. corporate news:

Apple (AAPL 158.58, +8.53): +5.7% after beating top and bottom line estimates.

Time Warner (TWX 103.68, +1.26): +1.2% after reporting better than expected earnings.

Mondelez (MDLZ 44.70, +1.08): +2.5% after beating bottom-line estimates.

Pioneer Natural Resources (PXD 149.98, -13.29): -8.1% after lowering its forecast for production growth. On a positive note, PXD beat top and bottom line estimates.

Illumina (ILMN 189.79, +17.49): +10.2% after reporting better than expected earnings and revenues and raising its revenue guidance for the fiscal year.

Reviewing overnight developments:

Equity indices in the Asia-Pacific region ended the midweek session on a mixed note. Japan's Nikkei +0.5%, Hong Kong's Hang Seng +0.2%, China's Shanghai Composite -0.2%, India's Sensex -0.3%.

In economic data:

Japan's July Household Confidence 43.8 (expected 43.6; last 43.3) and Monetary Base +15.6% year-over-year (expected 16.6%; last 17.0%)

Hong Kong's June Retail Sales +0.1% year-over-year (last 0.5%)

Australia's June Building Approvals +10.9% month-over-month (expected 1.5%; last -5.4%) and June Private House Approvals +3.4% (last 1.3%)

New Zealand's Q2 Employment Change -0.2% quarter-over-quarter (expected 0.7%; last 1.2%). Q2 Participation Rate 70.00% (expected 70.7%; last 70.6%) and Q2 Employment Change -0.2% quarter-over-quarter (expected 0.7%; last 1.2%). Q2 Unemployment Rate 4.8%, as expected (last 4.9%)

In news:

Technology stocks had a good showing after Apple (AAPL) reported better than expected results for the third quarter.

Reports out of Washington indicate the Trump administration has opened a broad inquiry into China's trade practices, focusing on treatment of theft of intellectual property.

The People's Bank of China will reportedly use a wider array of instruments to maintain liquidity in August.

Bank of Japan member Yukitoshi Funo said that current price momentum is insufficient to achieve the 2.0% CPI target.

The Reserve Bank of India lowered its repurchase rate by 25 basis points to 6.00%, as expected.

Major European indices trade on a lower note, but losses have been limited through the first half of action. France's CAC -0.1%, Germany's DAX -0.2%, UK's FTSE -0.3%.

In economic data:

Eurozone June PPI -0.1% month-over-month, as expected (last -0.3%); +2.5% year-over-year (consensus 2.4%; last 3.4%)

Spain's Unemployment Change -26,900 (expected -66,500; last -98,300)

Swiss July Retail Sales +1.5% year-over-year (expected 1.3%; last -0.8%) and July SVME PMI 60.9 (expected 58.9; last 60.1). Q3 SECO Consumer Climate -3, as expected (last -8)

In news:

Moody's raised its outlook on the UK banking sector to 'Stable' from 'Negative' due to increased resilience.