Day Traders Diary

4/25/18

The stock market fell sharply yesterday, with the major averages losing more than 1.0% apiece, and looks poised to keep on dropping this morning, as the S&P 500 futures are trading nine points, or 0.3%, below fair value. The S&P 500's 200-day moving average (2608) is in play today after the index settled about 25 points above the key technical level on Tuesday.

Treasury yields remain a focal point on Wall Street this morning, as the benchmark 10-yr yield has finally broken above the psychologically important 3.0% mark. The 10-yr yield is currently trading at 3.03%, which is five basis points above yesterday's close and its highest level since January 2014. Meanwhile, the 2-yr yield is up four basis points at 2.50% -- its highest level since August 2008. The rise in yields has helped underpin the U.S. Dollar Index, which is up 0.4% at 90.94 -- its best level since early January.

WTI crude futures are trading roughly flat, hovering around $67.70 per barrel, after the American Petroleum Institute reported a build of 1.1 million barrels on Tuesday evening. The official government figures, which often deviate sharply from the API numbers, will be released at 10:30 AM ET. At current levels, WTI crude is about $1.00 below its best level in more than three years.

Today's economic data is limited to the weekly MBA Mortgage Applications Index, which crossed the wires earlier this morning, showing a downtick of 0.2%.

In U.S. corporate news:

• Boeing (BA 336.50, +7.44): +2.3% after crushing Q1 earnings and revenue estimates and raising its profit guidance for FY18.
• Texas Instruments (TXN 103.00, +4.58): +4.7% after beating top and bottom line estimates for Q1.
• Twitter (TWTR 31.68, +1.21): +4.0% after reporting above-consensus earnings and revenues for Q1.

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region ended the midweek session on a lower note, following in the footsteps of U.S. stocks. Japan's Nikkei -0.3%, Hong Kong's Hang Seng -1.0%, China's Shanghai Composite -0.4%, India's Sensex -0.3%.
  • In economic data:
    • Japan's All Industries Activity Index 0.4% (expected 0.4%; last -1.1%)
    • South Korea's April Consumer Confidence 107 (last 108)
  • In news:
    • China's reserve requirement ratio cut went into effect today and Chinese press quoted an official who said that the RRR can be cut by as much as 800 bps in three years.
    • U.S. President Donald Trump confirmed that Treasury Secretary Steven Mnuchin will visit China.
    • Japanese prosecutors have begun investigating Kobe Steel's data quality scandal.
    • Kyodo quoted an LDP member as saying the lower house could be dissolved due to the recent political scandal and a declining approval rating of Prime Minister Shinzo Abe.

• Major European indices trade lower across the board with Germany's DAX (-1.8%) pacing the decline. UK's FTSE -0.8%, France's CAC -0.9%.
  • In economic data:
    • France's April Consumer Confidence 101 (expected 100; last 100). Jobseeker total 3.436 million (last 3.423 million)
    • Spain's March PPI +1.3% year-over-year (last 1.3%)
    • Swiss April ZEW Expectations 7.2 (last 16.7)
  • In news:
    • EU negotiators are reportedly prepared to offer a better trade deal to Great Britain if Britain remains in the customs union.
    • ECB member Vitas Vasiliauskas said he is more confident that it is time to transition away from quantitative easing, but the bond buying program should not come to an abrupt end.

Headlines provided by Briefing.com