Day Traders Diary

9/27/17

The stock market enters the midweek session lower for the week as Tuesday's bounce-back attempt, which was preceded by a technology sell off on Monday, petered out in the late-afternoon, leaving the major indices little changed. Things are looking up, however, as the S&P 500 futures currently trade six points, or 0.3%, above fair value.

Reports suggest that President Trump will call for reducing the corporate tax rate to 20% from 35% this afternoon when he provides the details of the GOP's much-anticipated tax reform proposal. The president is scheduled to speak at 15:00 ET and promises that today's unveiling will be "very comprehensive." 

U.S. Treasuries are under pressure this morning, with longer-dated issues showing particular weakness; the 2-yr yield is up three basis points at 1.47% while the 10-yr yield has jumped six basis points to 2.29%. The U.S. dollar has seen a pick up in demand amid the increase in interest rates, sending the U.S. Dollar Index higher by 0.4% to 93.22.

Crude oil is trading slightly higher this morning at $51.93/bbl after the American Petroleum Institute reported a draw of 0.8 million barrels yesterday evening. The more influential weekly report from the Department of Energy will be released later this morning at 10:30 ET.

On the data front, investors will receive August Durable Goods Orders (Briefing.com consensus +0.7%) and August Pending Home Sales (Briefing.com consensus -0.4%) at 8:30 ET and 10:00 ET, respectively. Also of note, the weekly MBA Mortgage Applications Index, which was released earlier this morning, decreased 0.5% to follow last week's 9.7% decline.

In U.S. corporate news:

• Nike (NKE 51.77, -1.93): -3.6% despite beating earnings estimates. 
• Micron Technology (MU 36.18, +2.00): +5.9% after beating both top and bottom line estimates and issuing above-consensus guidance. 

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region ended Wednesday on a mixed note. Japan's Nikkei -0.3%, Hong Kong's Hang Seng +0.5%, China's Shanghai Composite +0.1%, India's Sensex -1.4%.
  • In economic data:
    • Investors did not receive any economic data of note
  • In news:
    • Reports in the Chinese press indicate Beijing will issue new guidelines in October for new-energy vehicle components, batteries, and supporting facilities.
    • U.S. Secretary of Commerce Wilbur Ross said the U.S. wants better physical access to China and that China needs to respect intellectual property rights.
    • The U.S. Treasury sanctioned eight North Korean banks and 26 individuals associated with the banks.

• Major European indices trade on a higher note. France's CAC +0.2%, UK's FTSE +0.3%, Germany's DAX +0.5%, Spain's IBEX +1.3%.
  • In economic data:
    • Eurozone August M3 Money Supply +5.0% year-over-year (consensus 4.6%; last 4.5%) and Private Sector Loans +2.7% year-over-year, as expected (last 2.6%)
    • UK's September CBI Distributive Trades Survey 42 (expected 5; last -10)
    • France's September Consumer Confidence 101 (expected 103; last 103)
    • Italy's September Business Confidence 110.4 (expected 108.1; last 108.5) and Consumer Confidence 115.5 (consensus 110.8; last 111.2). July Industrial New Orders +10.1% year-over-year (last 13.7%) and Industrial Sales +4.0% year-over-year (last 7.6%)
    • Swiss September ZEW Expectations 28.0 (last 25.0)
  • In news:
    • Spain's prosecutor's office ordered Catalan police to close and occupy all premises that might be used as polling locations for the independence referendum on October 1. The polling places must be closed and secured by Saturday.
    • In Germany, leading economic institutes increased their joint forecast for 2017 GDP to 1.9% from 1.5%. The outlook for 2018 was increased to 2.0% from 1.8%.