Day Traders Diary


The S&P 500 eked out the slimmest of gains (+0.09 point) to register its fourth consecutive advance, maintaining its September advance at 1.4%.

Prior to the opening bell, it was reported that August nonfarm payrolls increased by 169,000, which was below the 177,000 expected by the consensus. Private payrolls came in at 152,000 while the consensus expected a reading closer to 180,000. More notably, July nonfarm payrolls were revised down nearly 36% to 104,000 from 162,000 while private payrolls saw a 21% revision to 127,000 from 161,000. The unemployment rate ticked down to 7.3% from 7.4%, but once again, that was the result of a drop in the labor force participation rate to 63.2%. This represents the lowest rate since August 1978. The one bright spot could be found in aggregate income, which increased 0.6%.

A recent stretch of better-than-expected data played into the expectation that the Fed may lower the pace of its asset purchases at the upcoming September 17/18 FOMC meeting. However, today's jobs report painted a more uncertain picture, which sparked a market reaction consistent with lowered expectations of tapering in the near term.

Immediately following the report, crude oil, equity futures, Treasuries, and gold futures jumped to their highs while the Dollar Index (82.15, -0.48) tumbled to its lows. Most notably, the 10-yr note saw its yield slide from 2.96% to 2.87%. However, Treasuries surrendered a portion of their gains intraday with the benchmark 10-yr yield closing at 2.94%.

The opening hour saw the S&P lose its 50-day average (1657/1658) after headlines from the conclusion of the G-20 summit indicated Russian President Vladimir Putin said his country will assist Syria in the event of an external attack. However, Russia and Syria have been allied for years, thus Mr. Putin's comments were not necessarily a "new" development. The ensuing selloff ended as the S&P bounced at its 100-day moving average (1642/1643) and regained its 50-day average in late-morning action.

Stocks slipped from their highs and the S&P once again lost its 50-day average during the final hour after reports from Al-Arabiya indicated another chemical attack has taken place in Damascus. However, the veracity of the reports could not be confirmed as Al-Arabiya attributed the report to an 'unidentified activist.'

With the continued uncertainty surrounding the situation in the Middle East, crude oil climbed throughout the day. The energy component ended higher by 2.0% at $110.54 per barrel, registering its highest close since May 2011.

Elsewhere, gold futures climbed 1.0% to $1.386.70 per troy ounce. This contributed to the strength of miners as the Market Vectors Gold Miners ETF (GDX 28.01, +0.48) advanced 1.7%.

Consumer staples (+0.1%) and utilities (+0.6%) outperformed as the retreat in yields provided the two groups with a measure of support.

Today's participation was somewhat limited as 672 million shares changed hands on the floor of the New York Stock Exchange. 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.