Day Traders Diary



It's been a positive day on Wall Street thus far, with the major averages reclaiming a good chunk of their losses for the week. The S&P 500 and the Dow Jones Industrial Average are up 0.8% apiece, while the tech-heavy Nasdaq Composite shows relative strength, rallying 1.4%. For the week, the three indices are down between 0.4% and 0.9%.

Facebook (FB 174.58, +14.89) has helped drive the Nasdaq's outperformance after reporting a blowout first quarter, easily topping earnings and revenue estimates and also reporting double-digit growth in daily active users (DAUs). FB shares are currently up 9.4%, hitting their best level in six weeks.

Similarly, shares of Visa (V 127.45, +6.23) and Advanced Micro (AMD 10.83, +1.12) are up 5.1% and 11.6%, respectively, after the companies reported above-consensus earnings and revenues for the first quarter and issued upbeat guidance. The S&P's technology sector, which houses Facebook, Visa, and AMD, is hovering at the top of today's sector standings with a gain of 2.3%. The group has a comfortable lead on the next-best performing sector -- real estate -- which is up 1.4%.

At the opposite end of the sector standings, the telecom services group is down 3.8% following a disappointing earnings report from AT&T (T 32.74, -2.45). The company's shares are down 7.0% after its first quarter report showed lower-than-expected earnings and revenues. 

The industrial sector (-0.6%) is also in the red, with Union Pacific (UNP 132.39, -3.67), Raytheon (RTN 209.50, -4.19), American Airlines (AAL 42.64, -2.61), and Southwest Air (LUV 52.93, -0.90) showing particular weakness; shares of the four names are down between 1.6% and 5.6% apiece. Union Pacific and Raytheon are lower despite reporting above-consensus Q1 earnings, while American Airlines and Southwest Air are down after issuing disappointing guidance.

Maybe the most notable post-earnings mover has been Chipotle Mexican Grill (CMG 418.37, +78.97); shares of the burrito chain have surged 23.5%, hitting their highest level in nearly a year, after the company reported an impressive first quarter, handily beating earnings estimates on above-consensus growth in same-store sales.

Overseas, the European Central Bank released its latest policy directive this morning, which, as expected, left interest rates unchanged and confirmed that net asset purchases will remain at the current monthly pace of EUR30 billion until the end of September 2018, or beyond, if necessary. The euro is down 0.3% against the U.S. dollar at 1.2121 -- its lowest level since early January -- following the release and a dovish-sounding press conference from ECB President Mario Draghi.

In the U.S. bond market, Treasuries are higher today, pushing yields lower across the curve. The benchmark 10-yr yield has returned to the 3.0% mark after settling Wednesday at 3.02%, which marked its highest close in more than four years. Meanwhile, the 2-yr yield is down one basis point at 2.48%.

Reviewing today's economic data, which included Durable Goods Orders for March, weekly Initial Claims, Advance International Trade in Goods for March, and Advance Wholesale Inventories for March:

  • March durable goods orders climbed 2.6%, which is more than the 1.9% increase expected by the consensus. The prior month's reading was revised to +3.5% (from +3.1%). Excluding transportation, durable orders were flat ( consensus +0.6%) to follow the prior month's revised increase of 0.9% (from +1.2%).
    • The key takeaway from the report was that business spending was soft, evidenced by a 0.1% decline in orders of nondefense capital goods excluding aircraft. Shipments of those goods, which factor into GDP forecasts, were down 0.7% after increasing 1.0% in February.
  • The latest weekly initial jobless claims count totaled 209,000, while the consensus expected a reading of 225,000. Today's tally was below the revised prior week count of 233,000 (from 232,000). As for continuing claims, they declined to 1.837 million from a revised count of 1.866 million (from 1.863 million).
    • The key takeaway from the initial claims report is that it will feed concerns about a tightening in labor supply and a potential pickup in wage-based inflation pressure as a result of it.
  • The Advance report for International Trade in Goods for March showed a deficit of $68.0 billion.
  • The Advance report for Wholesale Inventories for March showed an increase of 0.5%.

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