Day Traders Diary



U.S. futures are pointing to a lower start again this morning as U.S. Treasury yields continue to rise. The S&P 500 futures are currently trading 14 points, or 0.5%, below fair value.

Yesterday's volatile session was marred by a continued weakness of highly valued technology stocks. Today, however, the focus is on the U.S. Treasury market, which is preparing for its first trading session of the week after being closed in observance of Columbus Day on Monday.

The yield on the benchmark 10-yr Treasury note, which surged to a fresh a seven-year high last week, has tacked on another two basis points this morning, rising to 3.25%. Meanwhile, the more Fed-sensitive 2-yr yield remains unchanged at 2.88%. The higher yields have helped underpin the U.S. Dollar Index, which is up 0.3% at 95.80.

With yields in focus yet again, market participants will pay heed to several Fed speakers today in hopes to gauge expectations regarding future interest rate hikes. Dallas Fed President Robert Kaplan kicked things off earlier this morning and will be followed by Chicago Fed President Charles Evans at 10:00 AM ET and Philadelphia Fed President Patrick Harker at 1:00 PM ET. In addition, New York Fed President John Williams will speak tonight at 9:15 PM ET.

In worldly news, the International Monetary Fund (IMF) cut its global growth forecast to 3.7% from 3.9% in both 2018 and 2019. The revision comes amid the U.S.-China trade war, slumping emerging market economies, and uncertainties over Brexit and the new United States-Mexico-Canada Agreement. The IMF also cut its U.S. growth forecast to 2.5% from 2.7% in 2019.

Also of note, Hurricane Michael has intensified to a Category 2 storm and is expected to hit the Florida panhandle on Wednesday.

Earlier, the NFIB Small Business Optimism Index for September was released, decreasing to 107.9 from 108.8. Investors will not receive any further economic data today. 

In corporate news:

  • Papa John's (PZZA 54.90, +4.48): +8.9% following a WSJ report of a potential Trian Fund Management bid.

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region ended Tuesday on a mostly lower note. Japan's Nikkei lost 1.3%, Hong Kong's Hang Seng shed 0.1%, China's Shanghai Composite added 0.2%, and India's Sensex lost 0.5%.
    • In economic data:
      • Japan's August Current Account surplus JPY1.43 trillion (expected surplus of JPY1.52 trillion; last surplus of JPY1.48 trillion). September Economy Watchers Current Index 48.6 (expected 47.3; last 48.7)
      • Australia's September NAB Business Confidence 6 (expected 5; last 4) and NAB Business Survey 15 (last 15)
    • In news:
      • Press reports from Hong Kong noted that U.S. and Chinese officials are unlikely to discuss trade at annual meetings of the IMF and the World Bank.
      • Standard & Poor's commented on China's recent reserve ratio requirement cut, noting that it is insufficient to boost select lending.
  • Major European indices trade on a modestly lower note with Germany's DAX (-0.5%) showing relative weakness. France's CAC is lower by 0.3%, UK's FTSE trades down 0.4%, and Germany's DAX is lower by 0.5%
    • In economic data:
      • Germany's August trade surplus EUR18.30 billion (expected surplus of EUR16.40 billion; last surplus of EUR15.90 billion) August Imports -2.7% month-over-month (expected -0.2%; last 2.8%) and August Exports -0.1% month-over-month (expected 0.3%; last -0.8%)
    • In news:
      • Market participants remain focused on Italy's fiscal standing, as the spread between Italy's 10-yr BTP yield and Germany's 10-yr bund yield climbs to 313 bps, overtaking the post-election high from May.
      • Meanwhile, Deputy Prime Minister Matteo Salvini said the budget plan will not be changed and that he is convinced the plan will generate jobs and wealth.
  • Headlines provided by

All comments contained herein are for informational purposes only, and should not be considered as a solicitation to buy or sell any security. The firm does not guarantee the accuracy or completeness of the information or make any warranties regarding results from it's usage.