Day Traders Diary


The stock market ended the Tuesday session on a flat note. The S&P 500 shed 0.1% after spending the day in a ten-point range while the other indices also settled near their unchanged levels.

Despite the flat finish, equity indices rallied at the start after the second revision to Q3 GDP surprised to the upside (3.9%; consensus 3.2%). However, the opening spike marked the session high for the S&P 500, which returned to unchanged by the end of the first hour.

The S&P 500 dipped into the red during morning action with the move taking pace amid weakness in the energy sector (-1.6%). The growth-sensitive group widened its week-to-date loss to 2.3% after a meeting between Russia, Saudi Arabia, Mexico, and Venezuela did not produce an agreement to reduce output. Crude oil also retreated on the news, but saw a short-lived spike on its way down in reaction to reports OPEC members may opt to cut supply at Thursday's meeting in order to stem the recent decline in price. The energy component ended lower by 2.2% at $74.09/bbl.

The energy sector was the lone decliner of note while most of the remaining groups ended with modest gains. The consumer discretionary space (+0.3%) finished in the lead after a few names reported earnings. Brown Shoe (BWS 31.29, +2.81), DSW (DSW 34.39, +0.74), and Signet Jewelers (SIG 131.59, +8.60) beat estimates while Tiffany & Co (TIF 107.62, +2.61) missed by a penny. The sector finished in the lead even though homebuilders lagged with the iShares Dow Jones US Home Construction ETF (ITB 25.93, -0.15) shedding 0.6%.

Elsewhere, the industrial sector (+0.2%) also finished near the lead with help from transport stocks. The Dow Jones Transportation Average extended to a fresh record, ending higher by 0.4%. Airlines benefitted from lower fuel prices with Delta Air Lines (DAL 44.08, +0.57) advancing 1.3%.

Another cyclical sectortechnologyled at the start, but narrowed its gain to just 0.1% by the close. Apple's (AAPL 117.61, -1.02) market cap briefly crossed the $700 billion mark in the morning, but the top-weighted sector component retreated into the close. Unlike Apple, the sector was able to avoid turning negative thanks to gains in other large components like Intel (INTC 36.32, +0.07) and Facebook (FB 75.63, +1.62).

Treasuries notched their lows in reaction to the GDP report, but rallied throughout the day. The 10-yr yield ended lower by five basis points at 2.26%.

Participation was ahead of average with more than 830 million shares changed hands at the NYSE floor.

Economic data included Q3 GDP, Case-Shiller 20-city Index, FHFA Housing Price Index, and Consumer Confidence:

Third quarter GDP was revised up to 3.9% in the second estimate from 3.5% while the consensus expected a reading of 3.2%
All of the gain in third quarter GDP resulted from an upward swing in inventories
Real final sales were revised down to 4.1% from 4.2%
The positive surprise was mostly the result of an unexpected upward revision to personal consumption expenditures with goods spending in the third quarter revised up to 4.3% from 3.1%
The Case-Shiller 20-city Index for September rose 4.9%, which was ahead of the consensus (4.6%)
The September FHFA Housing Price Index was unchanged to follow last month's 0.4% uptick
The Consumer Confidence Index dropped to 88.7 in November from a downwardly revised 94.1 (from 94.5) while the consensus expected an increase to 96.0.
The Present Conditions Index declined to 91.3 from 94.4 while the Expectations Index fell to 87.0 from 93.8
Tomorrow will be busy on the economic front with the MBA Mortgage Index set to cross the wires at 7:00 ET. Weekly Initial Claims, October Durable Orders, and October Personal Income/Spending Data will be released at 8:30 ET while the Chicago PMI for November will cross at 9:45 ET. The final reading of the Michigan Sentiment Survey will be released at 9:55 ET while New and Pending Home Sales will be reported at 10:00 ET.

Nasdaq Composite +13.9% YTD
S&P 500 +11.8% YTD
Dow Jones Industrial Average +7.5% YTD
Russell 2000 +2.1% YTD

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