Day Traders Diary
1/27/14U.S. equity futures display modest gains despite cautious overseas action. The S&P 500 futures trade four points above fair value.
Reviewing overnight developments:
Asian markets ended lower across the board. China's Shanghai Composite -1.0%, Hong Kong's Hang Seng -2.1%, and Japan's Nikkei -2.5%.
Economic data was limited:
Japan's trade deficit widened to JPY1.30 trillion from JPY1.29 trillion (deficit of JPY1.22 trillion expected) as exports rose 15.3% (17.8% forecast, 18.4% prior) and imports expanded 24.7% (26.1% consensus, 21.1% last). In addition, the adjusted trade deficit narrowed to JPY1.15 trillion from JPY1.29 trillion (JPY1.33 trillion forecast).
Hong Kong's trade deficit widened to HKD54.40 billion from HKD44.60 billion (HKD46.00 billion forecast).
South Korea's Consumer Confidence rose to 109 from 107 (107 expected).
New Zealand's Performance of Services Index ticked up to 57.5 from 55.8.
Among news of note:
According to Chinese press, the Shanghai branch of the People's Bank of China will strengthen its liquidity management.
Major European indices trade mixed. France's CAC +0.1%, Germany's DAX -0.2%, and Great Britain's FTSE -1.3%. Elsewhere, Spain's IBEX -0.4% and Italy's MIB -0.3%.
In economic data:
Germany's Ifo Business Climate Index ticked up to 110.6 from 109.5 (110.0 forecast) as Business Expectations improved to 108.9 from 107.4 (108.0 expected) and Current Assessment rose to 112.4 from 111.6, as expected.
Moody's affirmed the sovereign debt rating of France at 'Aa1' while maintaining a 'negative' outlook.
When asked about the possibility of launching a quantitative easing program, European Central Bank President Mario Draghi said the ECB may buy securitized bank loans packaged as asset-backed securities.
In U.S. corporate news:
Caterpillar (CAT 90.77, +4.60): +5.3% after beating earnings estimates on above-consensus revenue.
Cisco Systems (CSCO 21.63, -0.57): -2.6% following a JPMorgan downgrade to 'Underweight' from 'Neutral.'
Merck (MRK 52.76, +0.78): +1.5% after Morgan Stanley upgraded the stock to 'Overweight' from 'Equal-Weight.'
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