Day Traders Diary

6/18/18

Wall Street is on course to begin the week on a lower note, as the S&P 500 futures are trading 18 points, or 0.6%, below fair value.

Fears over a trade war between the U.S. and China have been the widely-cited catalyst behind this morning's sell off -- although there haven't been any notable developments on that front since Friday when President Trump confirmed that he has approved a 25% tariff on $50 billion worth of Chinese goods. Beijing responded by promising equivalent duties on U.S. goods should Washington following through.

The latest oil-related headlines say that OPEC and Russia plan to discuss on Friday increasing output by 300,000 to 600,000 barrels per day -- less than the 1 million barrels per day that was reported last month -- to combat falling production in Iran and Venezuela. WTI crude futures are down though, slipping 0.4% to $64.81/bbl.

In Europe, the fifth annual ECB "Forum on Central Banking" will kick off in Portugal today and will last through Wednesday. The highlight of the summit is expected to be Wednesday's panel discussion between Fed Chairman Jerome Powell, ECB President Mario Draghi, and Bank of Japan Governor Haruhiko Kuroda.

Today's lone economic report, the NAHB Housing Market Index, will be released at 10:00 AM ET.

In U.S. corporate news:

• Walt Disney (DIS 107.17, -1.68): -1.5% after being downgraded to 'Sell' at Pivotal Research Group.
• Intel (INTC 54.21, -0.90): -1.6% after being downgraded to 'Underperform' at Northland Capital.
• Chubb (CB 129.44, -1.44): -1.1% after being downgraded to 'Neutral' at Goldman.

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region began the week on a mostly lower note, but markets in Hong Kong and China were closed for holidays, resulting in reduced overall volume. Japan's Nikkei -0.8%, India's Sensex -0.2%.
  • In economic data:
    • Japan's May trade deficit JPY300 billion (expected surplus JPY140 billion; last surplus JPY450 billion). May Imports +14.0% year-over-year (expected 8.2%; last 5.9%) and May Exports +8.1% year-over-year (expected 7.5%; last 7.8%)
    • Singapore's May trade surplus SGD5.40 billion (last SGD6.00 billion). May non-oil Exports +10.3% month-over-month (expected -0.2%; last 6.5%); +15.5% year-over-year (expected 4.7%; last 11.8%)
    • South Korea's May trade surplus $6.60 billion (last $6.70 billion). May Imports +12.7% year-over-year (last 12.6%) and May Exports +13.2% year-over-year (last 13.5%)
  • In news:
    • Osaka was hit with a 6.1-magnitude earthquake, but there have been no reports of damage to nuclear plants or major infrastructure.
    • The Japanese press noted that 10-yr JGBs did not trade last Monday or Wednesday, meaning there have now been five sessions in 2018 without a market for Japan's 10-yr debt.
    • Moody's affirmed South Korea's 'Aa2' rating with a 'Stable' outlook.

• Major European indices trade lower across the board. UK's FTSE -0.4%, France's CAC -1.3%, Germany's DAX -1.4%.
  • In economic data:
    • UK's Rightmove House Price Index 0.4% month-over-month (last 0.8%)
    • Italy's April trade surplus EUR2.94 billion (expected EUR3.21 billion; last EUR4.53 billion)
  • In news:
    • Volkswagen is the weakest component in Frankfurt, trading lower by 2.6%, after the CEO of the company's Audi division, Rupert Stadler, was arrested due to his role in the emissions test cheating scandal.
    • German Chancellor Angela Merkel has reportedly received two more weeks for her party to reach agreement with CSU over the proper handling of immigration. CSU representatives have denied the existence of the timeline.

Headlines provided by Briefing.com