Day Traders Diary

2/26/18

The S&P 500 futures are trading 10 points, or 0.4%, above fair value as investors look to continue Friday's rally.

Overseas, equity indices in the Asia-Pacific region kicked off the week on a positive note, with Japan's Nikkei (+1.2%) and China's Shanghai Composite (+1.2%) setting the pace, and the major European bourses are also having a solid day, sporting gains of around 0.5% apiece.

In the bond market, U.S. Treasuries are higher this morning, sending yields lower across the curve; the yield on the 10-yr note is down two basis points at 2.85%, while the yield on the 2-yr note is lower by one basis point at 2.23%.

Investors will receive just one economic report today, New Home Sales (Briefing.com consensus 645K), which will be released at 10:00 AM ET.

Looking ahead, Jerome Powell will make his first appearance as Fed Chairman on Tuesday, when he is due to speak in front of the House Financial Services Committee. Mr. Powell will then return to Capitol Hill on Thursday to answer questions from the Senate Banking Committee. 

In U.S. corporate news:

• Qualcomm (QCOM 64.90, +1.58): +2.5% after proposing "further engagement" with Broadcom (AVGO 253.71, 0.00).
• U.S. Steel (X 45.50, +1.98), AK Steel (AKS 5.74, +0.24): +4.5% following a Bloomberg report that President Trump wants to impose the harshest tariffs on steel and aluminum imports recommended by the U.S. Department of Commerce.

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region began the week on a higher note. Japan's Nikkei +1.2%, Hong Kong's Hang Seng +0.7%, China's Shanghai Composite +1.2%, India's Sensex +0.9%.
  • In economic data:
    • China's House Prices +5.0% year-over-year (last 5.3%)
    • Japan's Leading Index 107.4 (expected 107.9; last 107.9)
    • Singapore's January Industrial Production +6.7% month-over-month (expected 4.7%; last -0.5%); +17.9% year-over-year (expected 8.2%; last -3.4%)
  • In news:
    • China's Communist Party has proposed removing presidential term limits, paving the way for Xi Jinping to rule for life. Speculation about such a move has been on the rise since 'Xi Jinping Thought on Socialism with Chinese Characteristics' was added to the country's constitution in October.
    • In Japan, the approval rating of Prime Minister Shinzo Abe's cabinet has edged up to 56% from 55%.

• Major European indices hold modest gains across the board. Germany's DAX +0.4%, France's CAC +0.6%, UK's FTSE +0.6%.
  • In economic data:
    • UK's Gross Mortgage Approvals 40,100 (expected 37,200; last 36,100)
    • Swiss Q4 Employment Level 4.962 mln (last 4.956 mln)
  • In news:
    • In the UK, Labour's Jeremy Corbyn is expected to voice support for permanent membership in the EU customs union following Brexit.
    • Bank of England Deputy Governor Dave Ramsden warned that interest may be increased sooner than expected if wage growth accelerates.
    • European Central Bank member Benoit Coeure said he is not eager to rush into normalizing the region's ultraloose monetary policy.