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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

6/25/13

Equities settled near their highs, but came up a bit short in their attempt to erase yesterday's losses. The S&P 500 climbed 1.0% as all ten sectors ended with gains.

The majority of today's advance occurred in the first 90 minutes of the session amid a global rebound. Notably, China's Shanghai Composite shed 0.2% after being down as much as 5.7%. The rally off lows unfolded amid speculation The People's Bank of China will step in to resolve the ongoing liquidity crisis. However, the central bank has since reiterated its intention to remain on the sidelines. The overnight SHIBOR eased 75 basis points to 5.74% while the 1-week interbank rate rose 33 basis points to 7.64%.

Elsewhere, most European markets registered gains, but Italy's MIB fell 0.4% amid comments from an analyst at Italy's second largest bank, Mediobanca. The bank representative said the country's macroeconomic outlook has not improved and a bailout request will become inevitable. Italy's benchmark 10-yr yield rose seven basis points to 4.87%.

On a related note, U.S. Treasuries were in demand overnight, but surrendered all of their gains shortly after the open. As a result, the benchmark 10-yr yield ended higher by four basis points at 2.589%.

Interestingly, two rate-sensitive sectors vaulted to the top of this month's leaderboard despite the continued climb in Treasury yields. The telecom services sector rose 2.0%, which turned its month-to-date loss to a gain of 1.0%.

Also of note, the utilities space advanced 1.2% to trim its June loss to 1.1%.

Other defensive sectors trailed behind the broader market as consumer staples tacked on 0.1% while health care added 0.4%.

Meanwhile, cyclical groups were led by a 1.9% gain in financials. Transportation-related names displayed comparable strength as the Dow Jones Transportation Average jumped 1.9%.

Major homebuilders saw early strength before ending in mixed fashion. DR Horton (DHI 20.91, -0.01) shed 0.1%; Lennar (LEN 35.23, +0.24) gained 0.7% on better-than-expected earnings; while the broader iShares US Home Construction ETF (ITB 22.03, +0.24) added 1.1%.

A fair portion of today's economic data focused on housing. The April Case-Shiller 20-city Home Price Index rose 12.1% while a 10.5% increase had been expected by the Briefing.com consensus. This follows the previous month's increase of 10.9%.

Separately, April Housing Price Index from the FHFA increased 0.7%, which follows a 1.3% increase observed during the prior month.

Also of note, new home sales topped expectations increasing from an upwardly revised 466,000 (from 454,000) in April to 476,000 in May. The Briefing.com consensus pegged new home sales at 460,000.

Durable goods orders increased 3.6% for a second consecutive month in May. The Briefing.com consensus expected durable goods orders to increase 3.0%.

As expected, a large portion of the gain came from the transportation sector. Defense and nondefense aircraft orders increased 39.2% in May after increasing 23.6% in April.

Surprisingly, the gains in durables did not end with the transportation sector. Excluding transportation, durable goods orders rose 0.7% in May after increasing 1.7% in April. The consensus expected these orders to fall 0.5%.

The Conference Board's Consumer Confidence Index rose to 81.4 in June, up from 74.3 in May and at the highest point since January 2008. The Briefing.com consensus expected consumer confidence to weaken slightly and drop to 75.0.

Tomorrow, the weekly MBA Mortgage Index will be reported at 7:00 ET while the third estimate of first quarter GDP will be released at 8:30 ET. All comments contained herein are for informational purposes only, and should not be considered as a solicitation to buy or sell any security. The firm does not guarantee the accuracy or completeness of the information or make any warranties regarding results from it's usage.