Day Traders Diary

8/3/17

The stock market looks poised to open Thursday's session mixed as the S&P 500 futures trade three points, or 0.1%, below fair value while the Nasdaq futures trade five points, or 0.1%, above fair value.

Equities have been relatively flat this week, holding the S&P 500 to a modest week-to-date gain of 0.2%. However, the Dow Jones Industrial Average has bucked the range-bound trend, climbing 0.9% in response to some generally upbeat earnings reports. The industrial average closed at a record high in each of the last six sessions, marking the longest streak since it hit 12 in a row back in February.

U.S. Treasuries are rallying this morning after the Bank of England decided to keep its key interest rate and asset purchase program unchanged at their respective 0.25% and GBP435 billion, as expected. The benchmark 10-yr yield is three basis points lower at 2.25%. Meanwhile, the U.S. dollar has climbed 0.5% against the pound to 1.3156.

The U.S. Dollar Index (92.84, +0.09) is up 0.1%, crude oil is higher by 0.3% at $49.73/bbl, gold is down 0.4% at $1,266.63/ozt, and the CBOE Volatility Index (VIX 10.38, +0.10) is up 1.0%.

On the data front, investors will receive several economic reports, including the weekly Initial Claims Report (Briefing.com consensus 242K) at 8:30 ET, June Factory Orders (Briefing.com consensus 2.9%) at 10:00 ET, and the July ISM Services Index (Briefing.com consensus 56.9) also at 10:00 ET.

In U.S. corporate news:

Tesla (TSLA 346.44, +20.55): +6.3% after beating top and bottom line estimates. The company's Model 3 production is on track.

Regeneron Pharmaceuticals (REGN 495.00, +18.18): +3.8% after reporting better than expected earnings and revenues.

Aetna (AET 159.53, +4.79): +3.1% after beating both top and bottom line estimates and raising its earnings guidance for the fiscal year.

Yum! Brands (YUM 75.00, -1.62): -2.1% despite reporting better than expected earnings and revenues.

Reviewing overnight developments:

Equity indices in the Asia-Pacific region ended Thursday on a lower note. Japan's Nikkei -0.3%, Hong Kong's Hang Seng -0.3%, China's Shanghai Composite -0.4%, India's Sensex -0.7%.

In economic data:

China's July Caixin Services PMI 51.5 (expected 51.9; last 51.6)

India's July Nikkei Services PMI 45.9 (last 53.1)

Hong Kong's July Manufacturing PMI 51.3 (last 51.1)

Australia's June trade surplus narrowed to AUD856 million from AUD2.02 billion (expected surplus of AUD1.80 billion) June Imports +2.0% month-over-month (last 1.0%) and June Exports -1.0% month-over-month (last 9.0%). July AIG Services Index 56.4 (last 54.8)

South Korea's June Current Account surplus expanded to KRW7.01 billion from KRW4.52 billion.

In news:

The Australian dollar has retreated 0.4% against the greenback to 0.7933 after Standard & Poor's warned that risks to Australia's AAA sovereign rating have increased.

Commonwealth Bank of Australia was accused of money laundering and terrorism financing after failing to disclose suspicious transactions.

In China, Minister of Commerce Gao Hucheng said he hopes China and the United States can remain on a path of cooperation. The comments took place in the wake of recent reports, suggesting the U.S. is scrutinizing its trade relations with China.

Major European indices trade in mixed fashion. Germany's DAX -0.3%, France's CAC +0.4%, UK's FTSE +0.7%.

In economic data:

Eurozone June Retail Sales +0.5% month-over-month (expected 0.1%; last 0.4%); +3.1% year-over-year (consensus 2.6%; previous 2.4%). July Services PMI 55.4, as expected (last 55.4)

Germany's July Services PMI 53.1 (expected 53.5; last 53.5)

UK's July Services PMI 53.8 (expected 53.6; previous 53.4)

France's July Services PMI 56.0 (expected 55.9; last 55.9)

Italy's July Services PMI 56.3 (consensus 54.1; previous 53.6)

Spain's July Services PMI 57.6 (expected 58.3; last 58.3)

In news:

The Bank of England left its key interest rate and asset purchase program unchanged at their respective 0.25% and GBP435 billion, as expected. Two policymakers voted for a rate hike, down from three votes at the last meeting. However, the Monetary Policy Committee noted that the key rate may need to rise more than the market currently expects. The central bank lowered the UK's 2017 GDP growth forecast to 1.7% from 1.9%.

European Commission President Jean-Claude Juncker said the EU is ready to retaliate if U.S. sanctions against Russia have an impact on European companies.