Day Traders Diary

2/20/19

The S&P 500 futures trade two points, or 0.1%, below fair value as investors display some caution ahead of the release of the FOMC Minutes from the January meeting. The market will also be paying heed to any reported progress on the current U.S.-China trade talks in Washington.

The Fed will release the minutes from its Jan. 29-30 meeting at 2:00 p.m. ET today. Investors will parse the minutes for any clarity on the Fed's outlook for monetary policy and its balance sheet normalization efforts. Last month, the Fed signaled patience in its monetary approach and said it was open to curtailing its balance sheet runoff if necessary.

Earlier, the weekly MBA Mortgage Applications Index increased 3.6% following a 3.7% decline in the prior week.

U.S. Treasuries have edged higher, pushing yields lower across the curve. The 2-yr yield is down one basis point to 2.49%, and the 10-yr yield is down two basis points to 2.63%. The U.S. Dollar Index is up 0.1% to 95.57. WTI crude is down 0.5% to $56.14/bbl.

In U.S. Corporate news:

• CVS Health (CVS 66.12, -3.76): -5.4% after the company guided FY19 earnings below consensus, although did beat top and bottom-line estimates.
• Southern (SO 49.30, +0.38): +0.8% after the company beat top and bottom-line expectations.
• Garmin (GRMN 76.91, +5.94): +8.4% after topping earnings estimates by a wide margin and guiding FY19 earnings and revenue above consensus.
• Henry Schein (HSIC 61.20, -1.91): -3.0% after the company missed revenue estimates and guided FY19 earnings below consensus.

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region ended the midweek session on a higher note. Japan's Nikkei +0.6%, Hong Kong's Hang Seng +1.0%, China's Shanghai Composite +0.2%, India's Sensex +1.1%, South Korea's Kospi +1.1%, Australia's ASX All Ordinaries -0.1%.
  • In economic data:
    • Japan's December Construction Orders -3.7% year-over-year (last -10.7%). January trade deficit JPY370 billion (expected surplus of JPY170 billion; last deficit of JPY220 billion). January Imports -0.6% year-over-year (expected -2.8%; last 1.9%) and Exports -8.4% year-over-year (expected -5.5%; last -3.9%)
    • Australia's MI Leading Index 0.0% month-over-month (last -0.3%). Q4 Wage Price Index +0.5% quarter-over-quarter (expected 0.6%; last 0.6%); +2.3% year-over-year, as expected (last 2.3%)
    • New Zealand's Q4 Input PPI +1.6% quarter-over-quarter (last 1.4%) and Output PPI +0.8% quarter-over-quarter (last 1.5%)
  • In news:
    • Bank of Japan Governor Haruhiko Kuroda said during his parliamentary testimony that he does not believe the central bank's policy is weakening the yen, adding that monetary policy does not target the exchange rate.
    • South Korean city of Ulsan, which is responsible for about 15.0% of the country's industrial output, saw its unemployment rate jump to 4.5% in the fourth quarter from 2.9% in the third quarter.
    • Australia's Foreign Investment Review Board noted that China has been surpassed by the U.S. as the largest source of proposed investment in Australia for the first time since 2012.

• Major European indices trade on a modestly higher note. STOXX Europe 600 +0.3%, Germany's DAX +0.4%, UK's FTSE 100 +0.2%, France's CAC 40 +0.3%, Italy's FTSE MIB +0.1%, Spain's IBEX 35 +0.6%.
  • In economic data:
    • Germany's January PPI +0.4% month-over-month (expected -0.2%; last -0.4%); +2.6% year-over-year (expected 2.2%; last 2.7%)
    • UK's February CBI Industrial Trends Orders 6 (expected -5; last -1)
  • In news:
    • British Prime Minister Theresa May will meet with European Commission President Jean-Claude Juncker today, and will reportedly seek a legally-binding concession on the Irish backstop.
    • European Central Bank chief economist Peter Praet said the governing council will discuss new targeted long-term refinancing operations during the policy meeting on March 7, but a final decision may be made at a later time.
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  • Headlines provided by Briefing.com