Day Traders Diary
10/18/11Futures are trading around the flat line this morning (S&P futures -1 vs. fair value, DJ futures flat), following yesterday's late-day surge on reports that Germany and France are looking to increase the size of the EFSF. That report has subsequently been downplayed, but the bid in risk assets remains nonetheless.
Overnight, markets were mostly higher, with generally strong markets in Europe (DAX +1.1%, CAC +0.8%, FTSE +1.0%) and a more mixed performance in Asia (Hang Seng +1.3%, Shanghai -0.3%, Nikkei +0.4%). Japan set up a special committee to assess the yen and it is rumored that an assessment may be complete by the end of the week. There are also reports suggesting that China may be contemplating stimulus and rate cuts to counter act slowing growth. In Europe, media outlets are showing Greek citizens clashing with police in day one of a planned two day protest. While markets have become accustomed to such images, a deterioration in the situation there could put a dent in some of the confidence about European progress. A WSJ report indicated that EU sources have denied the substance of yesterday's Guardian report about a 2 trillion euro EFSF fund, saying it is "totally wrong." Yesterday afternoon, Moody's downgraded Spain's credit rating (Spain's IBEX is +0.4% this morning).
Earnings results have been mixed since yesterday's close, with AAPL -6% on a surprising miss, while INTC is +3% on a strong report. YHOO is +3.4% after surpassing expectations, while MS is little changed after reporting results that were helped by a widening of their own debt-related credit spreads.
The econ calendar includes September CPI, Housing Starts and Building Permits at 8:30 ET. After the open Oil Inventory data is due at 10:30 ET, and we get the Oct. Beige Book at 2:00. After the close tonight, about 50 cos are scheduled to report results including WYNN, RVBD, AXP, EBAY, XLNX, PLCM and BWLD.
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