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Leigh Baldwin & Co.

112 Albany Street, Cazenovia, NY 13035 | Phone: (315) 655-2964 Toll Free: 1-800-659-8044

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Day Traders Diary

1/25/18

 

Stocks were all over the map on Wednesday as traders fought to extend the new year rally--which has given the major indices year-to-date gains of at least 6.0% apiece. The S&P 500 came up a little short, shedding 0.1%, but looks poised to return to record territory at the opening bell as the S&P 500 futures trade 10 points, or 0.4%, above fair value.

In Europe, the European Central Bank just released its January policy statement, deciding to keep interest rates unchanged, as expected. The central bank reiterated that it intends to keep net asset purchases at the new monthly pace of EUR30 billion until the end of September, or beyond, if necessary. ECB President Mario Draghi is scheduled to speak at 8:30 AM ET.

The Euro Stoxx 50 is up 0.1% while the euro trades flat against the U.S. dollar at 1.2409.

Elsewhere, the major stock indices in the Asia-Pacific region finished Thursday on a lower note, with Japan's Nikkei (-1.1%) showing relative weakness. The Japanese yen is up 0.2% against the U.S. dollar, hovering at 109.04.

In Washington, President Trump said on Wednesday that he plans to announce a $1.7 billion infrastructure package in his State of the Union address, which is scheduled for Tuesday, January 30. The president also said that he favors a path to citizenship for the so-called 'Dreamers'--undocumented immigrants who were brought to the U.S. when they were children--and that he is willing to testify under oath in special counsel Robert Mueller's investigation into Russia's interference in the 2016 presidential election.

Mr. Trump arrived at the World Economic Forum in Davos, Switzerland this morning and is scheduled to speak at the event tomorrow.

In the bond market, U.S. Treasuries are slightly higher, extending gains for the week. The yield on the benchmark 10-yr Treasury note is down two basis points at 2.63% and now holds a week-to-date loss of three basis points. Yields move inversely to prices.

On the data front, investors will receive several economic reports this morning, including weekly Initial Claims (Briefing.com consensus 240K) at 8:30 AM ET, New Home Sales for December (Briefing.com consensus 679K) at 10:00 AM ET, and Leading Indicators for December (Briefing.com consensus +0.5%) also at 10:00 AM ET.

In U.S. corporate news:

  • Caterpillar (CAT 173.00, +4.66): +2.8% after reporting better-than-expected earnings and revenues and issuing upbeat guidance for 2018.
  • 3M (MMM 253.50, +5.81): +2.4% after reporting above-consensus earnings and revenues and issuing better-than-expected guidance for 2018.
  • Kroger (KR 30.87, +1.39): +4.7% following a NY Post report that Kroger is considering a partnership with Alibaba (BABA) to compete with Amazon (AMZN).

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region ended Thursday on a mostly lower note. Japan's Nikkei -1.1%, Hong Kong's Hang Seng -0.9%, China's Shanghai Composite -0.3%, India's Sensex -0.3%.
    • In economic data:
      • New Zealand's Q4 CPI +0.1% quarter-over-quarter (expected 0.4%; last 0.5%); +1.6% year-over-year (consensus 1.9%; last 1.9%)
      • South Korea's Q4 GDP -0.2% quarter-over-quarter (expected 0.1%; last 1.5%); +3.0% year-over-year (consensus 3.1%; last 3.8%)
      • Hong Kong's December trade deficit HKD59.90 bln (last deficit of HDK44.00 bln). December Imports +9.0% month-over-month (last 8.6%) and December Exports +6.0% month-over-month
    • In news:
      • U.S. Commerce Secretary Wilbur Ross said that China's 20205 technology plan is a direct threat to the United States. Mr. Ross also said China is exporting more steel than the U.S. has capacity and noted that the Commerce Department's report on intellectual property violations will not be released for 'a little while.'
      • Standard & Poor's affirmed Australia's AAA rating with a 'Negative' outlook.
  • Major European indices trade near their flat lines with France's CAC (+0.5%) showing relative strength. UK's FTSE +0.1%, Germany's DAX +0.1%.
    • In economic data:
      • Germany's January Ifo Business Climate Index 117.6 (expected 117.1; last 117.2). January Current Assessment 127.7 (expected 125.4; last 125.5) and Business Expectations 108.4 (expected 109.4; last 109.4). February GfK Consumer Climate 11.0 (expected 10.8; last 10.8)
      • UK's Gross Mortgage Approvals 36,100 (expected 39,700; last 39,000) and January CBI Distributive Trades Survey 12 (expected 11; last 20)
      • Italy's November Industrial New Orders +0.3% month-over-month (last 1.9%); +8.9% year-over-year (last 12.5%). November Industrial Sales +1.3% month-over-month (last 1.1%); +5.1% year-over-year (last 6.0%)
      • Spain's Q4 Unemployment Rate 16.55% (expected 16.15%; last 16.38%)
    • In news:
      • The European Central Bank just released its January policy statement, deciding to keep interest rates unchanged, as expected. The central bank said that it intends to keep net asset purchases at the new monthly pace of EUR30 billion until the end of September, or beyond, if necessary. ECB President Mario Draghi is scheduled to speak at 8:30 AM ET.
      • British Chancellor Philip Hammond said he is satisfied with the current level of the pound, adding that a Brexit transition deal would likely allow for a two-year transition period
      • .
    • Headlines provided by Briefing.com
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