Day Traders Diary



Gains keep on coming for the U.S. equity market, which locked in its third straight record finish on Tuesday and looks poised to open Wednesday's session in the green. The S&P 500 futures are trading four points, or 0.1%, above fair value, while the Dow futures are up 75 points, or 0.3%.

The U.S. Dollar Index has received some attention this morning; it's down 0.5% at 89.43, hitting a fresh three-year low. The greenback has been in a downward trend for about a year amid signs of a pickup in global economic growth, which could prompt foreign central banks to dial back their ultra-accommodative policy stances.

However, this morning's push to a new multi-year low came after Treasury Secretary Steven Mnuchin said the Trump administration is a fan of "bilateral trading agreements" and spoke in favor of a weaker dollar, saying it's "good for trade." The greenback is down 0.3% against the euro (1.2338), 1.1% against the pound (1.4152), and 0.7% against the yen (109.53).

Meanwhile, U.S. Treasuries are under pressure, sending yields higher across the curve; the benchmark 10-yr yield is up three basis points at 2.65%.

Investors will receive the FHFA Housing Price Index for November ( consensus +0.4%) and Existing Home Sales for December ( consensus 5.70 million) at 9:00 AM ET and 10:00 AM ET, respectively. The weekly MBA Mortgage Applications Index crossed the wires earlier this morning, showing an increase of 4.5%.

Elsewhere, equity indices in the Asia-Pacific region finished Wednesday mixed, with Japan's Nikkei (-0.8%) showing relative weakness, while the Euro Stoxx 50 is flat.

In U.S. corporate news:

  • Texas Instruments (TXN 111.45, -8.44): -7.0% after reporting its slowest revenue growth in four quarters.
  • General Electric (GE 17.16, +0.27): +1.6% after reaffirming its guidance for 2018, which overshadowed below-consensus earnings and revenues.
  • United Continental (UAL 72.00, -5.97): -7.7% despite beating earnings estimates.

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region ended Wednesday on a mixed note. Japan's Nikkei -0.8%, Hong Kong's Hang Seng +0.1%, China's Shanghai Composite +0.4%, India's Sensex +0.1%.
    • In economic data:
      • Japan's January Manufacturing PMI 54.4 (expected 54.3; last 54.0). December trade surplus JPY90 million (expected surplus JPY270 billion; last surplus JPY360 billion). December Imports +14.9% year-over-year (expected 12.3%; last 17.2%); +9.3% year-over-year (consensus 10.1%; last 16.2%). November Leading Index 108.3 (expected 108.6; last 108.6)
      • Australia's MI Leading Index 0.3% (last 0.1%)
      • New Zealand's Credit Card Spending +6.3% year-over-year (expected 9.1%)
    • In news:
      • The yen rallied to its session high as the dollar fell to a fresh three-year low after U.S. Treasury Secretary Steven Mnuchin spoke in favor of a weaker dollar.
      • Nikkei reported that Japanese Prime Minister Shinzo Abe's cabinet expects that achieving a primary surplus will take until 2017, which is two years longer than previously expected.
      • Reports out of China indicate that cities will begin issuing GDP targets with Shanghai and Beijing reportedly expecting 6.5% growth in 2018.
  • Major European indices hover near their flat lines while the UK's FTSE (-0.5%) underperforms as the pound continues reclaiming its post-Brexit vote loss, having gained 600 pips since the start of 2018. France's CAC -0.2%, Germany's DAX unch.
    • In economic data:
      • Eurozone January Manufacturing PMI 59.6 (expected 60.4; last 60.6) and Services PMI 57.6 (expected 56.5; last 56.6)
      • Germany's January Manufacturing PMI 61.2 (expected 63.2; previous 63.3) and Services PMI 57.0 (expected 55.6; last 55.8)
      • UK's December Claimant Count Change 8,600 (expected 5,400; last 12,200). November Unemployment Rate 4.3%, as expected (last 4.3%). November Average Earnings Index + Bonus 2.5%, as expected (last 2.5%)
      • France's January Manufacturing PMI 58.1 (expected 58.7; last 58.8) and Services PMI 59.3 (expected 58.9; last 59.1)
      • Spain's December PPI +1.8% year-over-year (last 3.1%)
    • In news:
      • Brexit Minister David Davis said that a deal on a transition period should be reached by March.
      • European Central Bank President Mario Draghi was quoted as saying the central bank's asset purchase program has not led to a statistically significant movement in the exchange rate.
      • Die Zeit recently reported that Greece has not fulfilled requirements to qualify for a new loan from the IMF.

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