Day Traders Diary



Stocks are on course for a lower start to today's session following a late-afternoon spike on Wednesday. The S&P 500 futures are 10 points, or 0.4%, below fair value.

The tech-heavy Nasdaq 100 futures are 104 points, or 1.4%, below fair value after Facebook (FB) missed quarterly revenue and daily active user estimates and after saying it expects revenue growth rates to "decline by high-single digit percentages" in the second half of 2018. FB shares, which closed Wednesday at a new record, are down 20.0% in pre-market trading.

On Wednesday afternoon, headlines that President Trump had secured a trade deal with the EU sent stocks sharply higher. However, it's worth mentioning that European Commission President Jean-Claude Juncker, who represented the EU in a White House meeting with Mr. Trump, has limited sway with individual governments within the EU. Mr. Juncker was very clear that the two sides have agreed to negotiate, instead of securing specific agreements.

The ECB just released its latest policy directive, keeping rates unchanged as expected. ECB President Mario Draghi will take the podium at 8:30 AM ET.

Elsewhere, U.S. Treasuries are slightly higher, pushing the benchmark 10-yr yield down one basis point to 2.96%; WTI crude futures are down 0.2% at $69.18/bbl; the U.S. Dollar Index is up 0.1% at 94.10; and the CBOE Volatility Index is down 1.3% at 12.13.

Investors will receive several economic reports on Thursday, including Durable Goods Orders for June, the advance readings for June Wholesale Inventories and International Trade in Goods, and the weekly Initial Claims report. All reports will be released at 8:30 AM ET.

In U.S. corporate news:

  • Facebook (FB 174.03, -43.47): -20.0% after missing estimates for revenue and daily active users. The company also issued a disappointing outlook for Q3 and Q4.
  • Qualcomm (QCOM 62.97, +3.55): +6.0% after beating earnings and revenue estimates. QCOM officially ended its pursuit of NXP Semi (NXPI).
  • PayPal (PYPL 87.50, -3.87): -4.2% after issuing below-consensus revenue guidance for the third quarter.
  • Biogen (BIIB 350.80, -33.03): -8.6% despite reporting above-consensus trial results for its experimental Alzheimer's drug.
  • Advanced Micro (AMD 17.14, +1.09): +6.8% after beating both top and bottom line estimates.

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region ended Thursday on a mostly lower note. Japan's Nikkei -0.1%, Hong Kong's Hang Seng -0.5%, China's Shanghai Composite -0.7%, India's Sensex +0.3%.
    • In economic data:
      • Japan's Corporate Services Price Index 1.2% (expected 1.0%; last 1.0%)
      • South Korea's Q2 GDP +0.7% quarter-over-quarter, as expected (last 1.0%); +2.9% year-over-year (expected 3.0%; last 2.8%)
      • Australia's Q2 Import Price Index +3.2% quarter-over-quarter (last 2.0%) and Export Price Index +1.9% quarter-over-quarter (last 4.9%)
      • Singapore's June Industrial Production +3.9% month-over-month (expected 1.7%; last 0.3%); +7.4% year-over-year (expected 3.9%; last 12.9%)
      • Hong Kong's June trade deficit HKD54.10 billion (last deficit of HKD43.30 billion). June Imports +4.4% month-over-month (last 16.5%) and Exports +3.3% month-over-month (last 15.9%)
    • In news:
      • There was continued speculation about the Bank of Japan modifying the amount and composition of its ETF purchases.
      • Staying in Japan, Nikkei reported that the minimum wage will be raised by about 3.0% for fiscal year 2018.
      • Press reports from China indicate the People's Bank of China eased capital requirements for some banks to support lending.
  • Major European indices trade on a mostly higher note after the ECB decided to keep interest rates unchanged as expected. UK's FTSE -0.1%, France's CAC +0.2%, Germany's DAX +1.3%.
    • In economic data:
      • Germany's August GfK Consumer Climate 10.6 (expected 10.7; last 10.7)
      • France's July Consumer Confidence 97 (expected 98; last 97)
      • Italy's July Business Confidence 106.9 (expected 106.5; last 106.9) and Consumer Confidence 116.3 (expected 115.9; last 116.2)
      • Spain's Q2 Unemployment Rate 15.3% (expected 15.8%; last 16.7%)
    • In news:
      • Yesterday, European Commission President Jean-Claude Juncker met President Trump in Washington. The meeting received a lot of fanfare, as President Trump said the two sides agreed to work towards free trade, but comments made by Mr. Juncker, who has limited sway with individual governments within the European Union, was very clear in stating that the two sides have agreed to negotiate, instead of securing specific agreements. Tariffs on imports from the European Union will be suspended while negotiations take place, meaning it is in the EU's interest to ensure that negotiations take as long as possible, even if they do not lead anywhere.
      • Moody's commented on Greece's banking sector, noting it remains a key vulnerability, despite recent improvements.
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