Day Traders Diary



The U.S. equity market is on course to open today's session slightly lower after an impressive start to 2018. The S&P 500 futures are trading five points, or 0.2%, below fair value.

Wall Street climbed to new record highs last week with the Nasdaq, S&P 500, and Dow Jones Industrial Average adding 3.4%, 2.6%, and 2.3%, respectively. The technology sector (+4.2%) led the charge, just as it did in 2017, with materials (+4.0%) and energy (+3.9%) coming in second and third, respectively.

Overseas, equity indices in the Asia-Pacific region finished Monday's session in positive territory. Representatives from North Korea and South Korea are expected to talk tomorrow, marking the countries' first official meeting in more than two years. In Europe, the major bourses are modestly higher with the Euro Stoxx 50 up 0.2%.

The fourth quarter earnings season will kick off on Friday with results from financial heavyweights JPMorgan Chase (JPM) and Wells Fargo (WFC). As for economic data, this week's most notable reports are the Producer Price Index for December ( consensus +0.2%), which will be released on Thursday, and the Consumer Price Index for December ( consensus +0.2%) and Retail Sales for December ( consensus +0.4%), both of which will be released on Friday.

Today's lone economic report, November Consumer Credit ( consensus $18.0 billion), will cross the wires at 3:00 PM ET.

In the bond market, U.S. Treasuries are higher this morning, sending yields below their Friday closing levels. The benchmark 10-yr yield is at 2.46% after closing Friday at 2.48%, while the 2-yr yield is down one basis point at 1.95%.

In U.S. corporate news:

  • Kohl's (KSS 58.40, +4.04): +7.4% after reporting a 6.9% year-over-year increase in comparable sales for November and December combined and raising its diluted earnings guidance.
  • Caterpillar (CAT 164.00, +2.04): +1.3% after JPMorgan upgraded CAT shares to 'Overweight' from 'Neutral.'

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region ended Monday on a higher note while Japan's Nikkei was closed for Coming of Age Day. Hong Kong's Hang Seng +0.3%, China's Shanghai Composite +0.5%, India's Sensex +0.6%.
    • In economic data:
      • Australia's December AIG Construction Index 52.8 (last 57.5)
    • In news:
      • A couple Chinese cement companies raised their guidance for fiscal 2017 due to higher prices.
      • Representatives from North Korea and South Korea are expected to talk tomorrow. This will mark the first official meeting between the two sides since December 2015.
      • Hong Kong Monetary Authority Chief Executive Norman Chan said that, in November, home prices in Hong Kong are up more than 100% above the peak recorded in 1997.
  • Major European indices trade near their flat lines. UK's FTSE -0.1%, France's CAC +0.3%, Germany's DAX +0.3%. 
    • In economic data:
      • Eurozone November Retail Sales +1.5% month-over-month (expected 1.4%; last -1.1%); +2.8% year-over-year (consensus 2.2%; last 0.2%). December Business and Consumer Survey 116.0 (expected 114.8; last 114.6) and January Sentix Investor Confidence 32.9 (expected 31.5; last 31.1)
      • Germany's November Factory Orders -0.4% month-over-month (expected 0.1%; last 0.7%)
      • UK's December Halifax House Price Index -0.6% month-over-month (expected 0.2%; last 0.3%); +2.7% year-over-year (consensus 3.3%; last 3.9%)
      • Swiss December CPI 0.0% month-over-month (expected -0.1%; last -0.1%); +0.8% year-over-year, as expected (last 0.8%)
    • In news:
      • British Prime Minister Theresa May is expected to announce a cabinet reshuffle today, but reports suggest officials in top positions are safe. Conservative Party Chair Patrick McLoughlin has resigned.
      • German Chancellor Angela Merkel's CDU/CSU began coalition talks with SPD over the weekend, but it is not a given that a deal will be secured.
      • In Italy, Finance Minister Pier Carlo Padoan noted that a coalition between the Democratic Party and Silvio Berlusconi's Forza Italia could be in the cards, but a political stalemate could also result from the election scheduled for March 4.
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