Day Traders Diary

12/21/17

U.S. equity futures point to a modestly higher start to the Thursday session with the S&P 500 futures trading roughly five points above fair value.

With the tax vote in the rear-view mirror and Christmas on the immediate horizon, it would not be a surprise to see a decline in daily trading volume. Reduced pre-holiday participation has already been visible in Europe, where the key indices trade near their flat lines.

Market participants will receive a set of economic reports today, including Q3 GDP, but a limited reaction is expected since this will mark the third estimate of Q3 growth (Briefing.com consensus: 3.3%).

Besides the Q3 GDP report, the Philadelphia Fed Index for December (Briefing.com consensus: 21.0) and weekly Initial Claims (Briefing.com consensus: 236K) will be reported at 8:30 ET while the FHFA Housing Price Index for October (Briefing.com consensus: 0.4%) will be released at 9:00 ET.

U.S. Treasuries have edged higher with the 10-yr yield dipping two basis points to 2.48%.

In U.S. corporate news:

• Accenture (ACN 154.00, +2.25): +1.5% in reaction to better than expected results and upbeat guidance
• Bed Bath & Beyond (BBBY 23.40, -1.17): -4.8% as cautious guidance outweighs above-consensus earnings and revenue
• CarMax (KMX 66.71, -1.76): -2.6% despite reporting in-line earnings on above-consensus revenue
• Finish Line (FINL 12.69, +1.00): +8.6% after beating third quarter estimates and issuing in-line 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 +0.5%, China's Shanghai Composite +0.4%
  • In economic data:
    • Hong Kong's November CPI +1.6% year-over-year (last 1.5%)
    • New Zealand's Q3 GDP +0.6% quarter-over-quarter (expected 0.5%; last 1.0%); +2.7% year-over-year (consensus 2.3%; last 2.8%)
  • In news:
    • The Bank of Japan voted 8-1 to maintain its policy stance with Goushi Kataoka dissenting for the third straight meeting. Mr. Kataoka wanted to see more accommodation, arguing that CPI is unlikely to reach the 2.0% target.
    • The Telegraph reported that the U.S. is studying the possibility of a "bloody nose" attack on North Korea, which would be meant as a show of force.

• Major European indices trade near their flat lines. France's CAC -0.1%, Germany's DAX UNCH, and UK's FTSE +0.4%
  • In economic data:
    • UK's November Public Sector Net Borrowing GBP8.12 billion (expected GBP8.30 billion; last GBP7.25 billion)
    • France's December Business Survey 112 (expected 112; last 113)
    • Swiss November trade surplus CHF2.63 billion (expected CHF2.84 billion; last CHF2.45 billion)
  • In news:
    • Catalan residents are voting for a new parliament today with the first exit polls expected around 8:00 p.m. local time.
    • The latest reports from Germany indicate that official talks on starting a new SPD-CDU/CSU grand coalition will begin on January 7