Day Traders Diary



Stocks slipped from record highs on Monday, but look poised to reclaim a portion of their losses at today's opening bell; the S&P 500 futures are trading four points, or 0.2%, above fair value. 

Earnings season has heated up this morning and will keep going strong through the end of the week. In general, the results have been somewhat disappointing thus far as the blended growth rate has dropped to 2.0% from an estimate of 2.8% coming into the third quarter earnings season. Just a little more than 100 S&P 500 components have reported their quarterly results so far.

The most notable post-earnings mover this morning has been industrial giant Caterpillar (CAT 141.66, +9.98), which has jumped 7.6% in pre-market trade after reporting better-than-expected earnings and revenues and issuing above-consensus guidance.

U.S. Treasuries are mixed this morning, with longer-dated issues showing relative weakness. The benchmark 10-yr yield is up one basis point at 2.39%, while the yield on the 2-yr Treasury note is down one basis point at 1.57%. Meanwhile, the U.S. Dollar Index trades flat at 93.72, hovering near its best level of the month.

WTI crude futures are up 0.6% at $52.23 per barrel, trading near a one-month high. The American Petroleum Institute will release its weekly crude inventory report this afternoon at 16:30 ET, while the official government figures from the Energy Information Administration will cross the wires on Wednesday morning. 

Investors will not receive any economic data on Tuesday.

In U.S. corporate news:

  • Caterpillar (CAT 141.66, +9.98): +7.6% after reporting better-than-expected earnings and revenues and issuing above-consensus guidance.
  • 3M (MMM 229.83, +8.28): +3.7% after beating profit and sales estimates and issuing upbeat guidance.
  • Eli Lilly (LLY 89.00, +1.82): +2.1% after reporting above-consensus earnings and revenues and raising its guidance.
  • General Motors (GM 46.51, +1.36): +2.8% after beating both top and bottom line estimates. 

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region ended Tuesday on a mixed note, but Japan's Nikkei posted its 16th consecutive advance nonetheless. Japan's Nikkei +0.5%, Hong Kong's Hang Seng -0.5%, China's Shanghai Composite +0.2%, India's Sensex +0.3%.
    • In economic data:
      • Japan's October Manufacturing PMI 52.5 (expected 53.1; last 52.9)
    • In news:
      • Japan's Finance Minister Taro Aso gave some insight into how dependent policymakers have become on rising stock prices, noting that the market approves of the government's policies, because stocks 'went up' after the election.
      • China's President Xi Jinping's status has been elevated after party delegates made "Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era" a guiding principle for the Communist party. The move paves the way for President Xi to rule for life.
      • South Korea, Japan, and the U.S. are holding a joint two-day missile tracking exercise.
  • Major European indices trade on a modestly higher note while Italy's MIB (+0.7%) outperforms. UK's FTSE unch, Germany's DAX +0.2%, France's CAC +0.3%.
    • In economic data:
      • Eurozone October Manufacturing PMI 58.6 (expected 57.8; last 58.1) and Services PMI 54.9 (expected 55.6; last 55.8)
      • Germany's October Manufacturing PMI 60.5 (expected 60.2; last 60.6) and Services PMI 55.2 (consensus 55.6; last 55.6)
      • France's October Manufacturing PMI 56.7 (expected 56.0; last 56.1) and Services PMI 57.4 (expected 56.9; previous 56.1). October Business Survey 111 (expected 110; last 111)
      • Italy's September non-EU trade surplus EUR3.54 billion (last EUR2.53 billion)
    • In news:
      • European Council President Donald Tusk said that it is up to the UK to guide Brexit negotiations to a completion, adding that 'no Brexit' is still an option in the eyes of the EU. This position solidifies the argument that the European Union would prefer to keep the UK as a member state even though EU officials have adopted a 'we don't need you' stance towards Britain.
      • The European Central Bank's lending survey showed an increase in loan demand during the third quarter while credit standards eased.

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