Day Traders Diary


U.S. equities are looking to extend their winning streak to four sessions this morning, as the S&P 500 futures are trading eight points, or 0.3%, above fair value. Both the tech-heavy Nasdaq Composite and the small-cap Russell 2000 will be attempting to settle at new record highs for the third session in a row.

In Europe, the major stock indices are mostly higher, but the German 10-yr bund is lower after several European Central Bank officials said that inflation is moving towards the 2.0% target, suggesting that next week's policy meeting could provide investors with some guidance about the wind-down of the ECB's asset purchase program. The euro has climbed to a fresh two-week high following the news, jumping 0.5% against the U.S. dollar to 1.1771.

Today's batch of economic data will include the April Trade Balance report ( consensus -$48.8 billion) and the revised readings for first quarter Productivity ( consensus 0.6%) and Unit Labor Costs ( consensus 2.8%), all of which will cross the wires at 8:30 AM ET. The weekly MBA Mortgage Applications Index was released earlier this morning, showing an increase of 4.1% to follow last week's decrease of 2.9%.

Meanwhile, WTI crude futures are down 0.6% at $65.10 per barrel ahead of the government's weekly crude inventory report, which will be released at 10:30 AM ET. Last night, the API reported that U.S. crude stockpiles declined by 2.0 million barrels last week, but the API reading isn't seen as a reliable prelude to the official government report.

Elsewhere, U.S. Treasuries are lower, sending the yield on the benchmark 10-yr Treasury note four basis points higher to 2.96%.

In U.S. corporate news:

  • Facebook (FB 191.45, -1.49): -0.8% following a NY Times report that Facebook gave data access to at least four Chinese electronics companies, including one flagged by American intelligence officials as a national security threat.
  • Signet Jewelers (SIG 47.65, +3.50): +7.9% after beating earnings and revenue estimates for the first quarter.
  • L Brands (LB 39.26, +2.07): +5.6% after reporting a year-over-year increase of 10% in May sales.

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region ended the midweek session on a higher note. Japan's Nikkei +0.4%, Hong Kong's Hang Seng +0.5%, China's Shanghai Composite unch, India's Sensex +0.8%.
    • In economic data:
      • Japan's April Average Cash Earnings +0.8% year-over-year (expected 1.4%; last 2.0%)
      • Australia's Q1 GDP +1.0% quarter-over-quarter (expected 0.8%; last 0.5%); +3.1% year-over-year (expected 2.8%; last 2.4%)
      • New Zealand's ANZ Commodity Price Index +1.5% month-over-month (last 1.0%)
    • In news:
      • A report in China Securities Journal noted that the People's Bank of China could lower the reserve requirement ratio while raising yields on the medium-term lending facility and reverse repurchases.
      • South Korea's Ministry of Trade, Industry, and Energy revealed that Chinese investors have poured approximately $500 million into next-generation technologies like chips, automobiles, and robots.
      • The Reserve Bank of India unanimously voted for its first rate hike in nearly five years, increasing the repurchase rate by 25 basis points to 6.25% (expected 6.00%). The reverse repurchase rate was increased to 6.00% from 5.75% while the cash reserve ratio was left unchanged at 4.00%.
  • Major European indices trade on a mostly higher note, but Italian debt has extended yesterday's decline. UK's FTSE +0.4%, Germany's DAX +0.3%, France's CAC unch, Italy's MIB -0.2%, Spain's IBEX +1.0%.
    • In economic data:
      • Eurozone Retail PMI 51.7 (last 48.6)
      • Swiss May CPI +0.4% month-over-month (expected 0.3%; last 0.2%)
      • Spain's April Industrial Production +1.9% year-over-year (expected 5.0%; last 4.6%)
    • In news:
      • Comments from several European Central Bank members have crossed the wires today, but their message has been consistent. The ECB policymakers agreed that inflation is moving toward the 2.0% target with less dependence on stimulus. This suggests next week's ECB meeting could provide some guidance about the wind-down of the asset purchase program.
      • The European Commission has endorsed duties on U.S. products in response to U.S. tariffs on steel and aluminum imports.

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