Day Traders Diary

8/17/17

Investors have lacked conviction over the last couple of sessions, leaving the equity market little changed since Monday's rally. It looks like Wall Street might be in for more of the same this morning following a relatively quiet overnight session. The S&P 500 futures currently trade five points, or 0.2%, below fair value.

Yesterday, the minutes from the July FOMC meeting showed that Fed officials are growing increasingly concerned about softer than expected inflation readings, but they still remain in favor of announcing a balance sheet move at the upcoming policy meeting. The possibility of a December rate hike is still a coin toss with the fed funds futures market pricing in an implied probability of 46.8%.

U.S. Treasuries are trading slightly lower this morning, giving back a small portion of yesterday's rally, with the benchmark 10-yr yield climbing one basis point to 2.24%. Meanwhile, the U.S. Dollar Index (93.81, +0.40) is trading 0.4% higher, extending its week-to-date gain to 1.0%. The greenback is currently up 0.5% against the euro at 1.1705.

On the data front, investors will receive a slew of economic reports, including the weekly Initial Claims Report (Briefing.com consensus 240K) at 8:30 ET, the August Philadelphia Fed Index (Briefing.com consensus 17) also at 8:30 ET, the July Industrial Production (Briefing.com consensus 0.3%) and Capacity Utilization (Briefing.com consensus 76.7%) Report at 9:15 ET, and the Conference Board's Leading Economic Index for July (Briefing.com consensus 0.3%) at 10:00 ET.

In U.S. corporate news:

• Wal-Mart (WMT 79.35, -1.63): -2.0% despite beating bottom-line estimates.
• Cisco (CSCO 31.65, -0.69): -2.1% despite reporting in-line earnings and revenues.
• Alibaba (BABA 171.43, +12.03): +7.6% after beating both top and bottom line estimates.
• L Brands (LB 36.99, -2.56): -6.5% after issuing below-consensus guidance. 

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region ended Thursday on a mixed note. Japan's Nikkei -0.1%, Hong Kong's Hang Seng -0.2%, China's Shanghai Composite +0.7%, India's Sensex +0.1%.
  • In economic data:
    • Japan's July trade surplus JPY340 billion (expected surplus of JPY190 billion; last surplus of JPY900 million. July Imports +16.3% year-over-year (expected 17.0%; last 15.5%) and July Exports +13.4% year-over-year (consensus 13.6%; previous 9.7%)
    • Australia's July Employment Change 27,900 (expected 20,000; last 20,000) and Full Employment Change -20,300 (last 69,300). July Participation Rate 65.1% (expected 65.0%; last 65.0%) and Unemployment Rate 5.6% (consensus 5.6%; last 5.7%)
    • New Zealand Q2 Input PPI +1.4% quarter-over-quarter (last 0.8%) and Output PPI +1.3% (last 1.4%)
    • Singapore's July trade surplus SGD5.50 billion (last SGD6.40 billion). July Non-Oil Exports -2.5% month-over-month (expected -0.4%; last -2.2%); +8.5% year-over-year (consensus 9.9%; last 8.8%)
    • Hong Kong's July Unemployment Rate held at 3.1%
  • In news:
    • South Korea's President Moon Jae-In said there should be no war on the Korean peninsula and that the United States promised to seek South Korea's approval before taking action against North Korea.
    • Economic data from Australia showed the fifth consecutive increase in employment, but the Australian dollar surrendered its post-data gain.

• Major European indices trade on a lower note, but losses have been limited through the first half of action. UK's FTSE -0.4%, France's CAC -0.3%, Germany's DAX -0.2%.
  • In economic data:
    • Eurozone June trade surplus expanded to EUR26.60 billion from EUR21.40 billion (expected surplus of EUR22.90 billion). July CPI -0.5% month-over-month, as expected (last 0.0%); +1.3% year-over-year, as expected (last 1.3%). July Core CPI -0.6% month-over-month (last 0.2%); +1.2% year-over-year, as expected (last 1.2%)
    • UK's July Retail Sales +0.3% month-over-month (expected 0.2%; last 0.3%); +1.3% year-over-year (consensus 1.4%; last 2.8%). Core Retail Sales +0.5% month-over-month (expected 0.2%; last 0.6%); +1.5% year-over-year (consensus 1.3%; last 2.8%)
    • France's Q2 Unemployment Rate ticked down to 9.5% from 9.6%
  • In news:
    • Reports indicate that Brexit talks will be suspended until December to allow Germany to form its government after the federal election on September 24.