Day Traders Diary


The S&P 500 settled lower by 0.1% after recovering a portion of its losses into the close.

Equities saw little change at the start of today's session after index futures surrendered their pre-market gains just ahead of the opening bell. The decline in futures coincided with euro weakness after reports indicated the International Monetary Fund and Eurozone officials gave Greece three days to prove its reforms are on course.

Contributing to the euro weakness was the situation in Portugal where the country's foreign minister resigned after the finance minister, who constructed the country's EU/IMF bailout, submitted his resignation yesterday. The resignations of two key figures put the spotlight on Prime Minister Pedro Passos Coelho, who said he does not plan to step down. The uncertainty pushed the Portuguese 10-yr yield higher by nine basis points to 6.42%.

Stocks were able to look past the cautious open and the S&P 500 climbed to a session high less than a point above its 50-day moving average. However, similar to yesterday, the index was unable to hold above that level into the close.

The major averages retreated from their highs amid headlines from Germany, where Chancellor Angela Merkel said Greece may not receive the full bailout amount as planned. Instead, the funds could be paid out in installments.

The follow-up to earlier headlines took some wind out the market's sails and eventually pressured the euro below 1.3000, to a one-month low against the dollar.

Today's dollar strength did not slow the advance in crude oil as the energy component added 1.4% to $99.40 per barrel. On a related note, U.S. television networks brought some additional attention to the intensifying protests in Egypt. Yesterday, the Egyptian military said it will intervene if a solution is not reached in 48 hours. Today, subsequent reports indicated the military will suspend the constitution and dissolve the country's government if no agreement is reached by tomorrow.

While crude oil registered a solid gain, other commodities underperformed. Copper futures slid 0.7% to $3.134 per pound while gold futures declined 1.1% to $1242.00 per ounce. This weighed on the materials sector, which ended with a loss of 0.4%.

Elsewhere, the industrial space trailed behind the broader market from the start. Transportation-related names lagged as the Dow Jones Transportation Average shed 0.5%. In addition, defense contractors displayed broad weakness. The PHLX Defense Index fell 1.3% as 16 of its 17 components ended in the red. Of the 16 decliners, 11 names registered losses larger than 1.0%.

Countercyclical sectors ended in mixed fashion as the telecom space outperformed with a gain of 0.5% while the health care sector shed 0.3% after the Centers for Medicare and Medicaid Services announced a 9.4% decrease in payments to dialysis providers starting in 2014.

Today's economic data was limited to manufacturing orders, which increased 2.1% in May, up from an upwardly revised 1.3% (from 1.0%) in April. The consensus expected factory orders to increase 2.0%.

A full slate of economic reports is scheduled for tomorrow, beginning with the 7:00 ET release of the weekly MBA Mortgage Index. June Challenger Job Cuts and ADP Employment Change will be reported at their respective 7:30 ET and 8:15 ET while weekly initial claims will cross the wires at 8:30 ET. Finally, the May trade balance will be reported at 8:30 ET while June ISM Services Index will be announced at 10:00 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.