Day Traders Diary



The stock market posted its second consecutive gain with the S&P 500 (+0.2%) notching a fresh intraday record high at 2,120.49. More notably, the Nasdaq Composite (+0.4%) set a fresh closing record high at 5,056.06, which eclipsed the previous peak (5,048.62) that was notched on March 10, 2000.


Strikingly, today's advance occurred after Manufacturing PMI readings from China (49.2; consensus 49.6) and Japan (49.7; expected 50.8) missed expectations while European economies also delivered disappointing manufacturing surveys. Economic data did not improve much by the start of the U.S. session with the New Home Sales report for March missing expectations (481K; consensus 520K). Furthermore, a large portion of quarterly reports received since yesterday's close failed to show year-over-year revenue growth, which has been a recurring theme during this earnings season.


Normally, the aforementioned combination would serve as a recipe for weakness in equities, but instead, the macro and micro concerns morphed into expectations that the Fed would remain at the zero-bound for longer. Treasuries agreed with this assessment and climbed alongside equities, pressuring the 10-yr yield four basis points to 1.94%. Meanwhile, the Dollar Index (97.29, -0.64) fell 0.7% with the euro gaining 0.9% against the greenback (1.0825).


Conversely, the dollar weakness helped crude oil climb throughout the day to settle higher by 2.8% at $57.74/bbl. Fittingly, the strength underpinned the energy sector (+0.6%), which ended ahead of the remaining cyclical groups. Only the telecom services sector (+2.2%) had a better showing, thanks to AT&T (T 34.23, +1.37), which surged 4.2% despite missing earnings and revenue estimates.


Going back to the cyclical side, the consumer discretionary sector (+0.5%) represented the only other outperformer while the remaining growth-sensitive groups ended in-line with or behind the S&P 500.


The discretionary sector rallied behind apparel names after Skechers (SKX 86.87, +11.03) reported better than expected results. Shares of SKX surged 14.5% while the strength among its peers overshadowed losses in homebuilder names after PulteGroup (PHM 19.97, -1.72) reported disappointing results. The stock fell 7.9% while the iShares Dow Jones US Home Construction ETF (ITB 26.67, -0.78) lost 2.8%.


Elsewhere, the technology sector (+0.2%) finished in-line with the market as large cap names like Apple (AAPL 129.67, +1.05), Google (GOOGL 557.46, +8.28), and Microsoft (MSFT 43.34, +0.36) overshadowed losses among chipmakers after Texas Instruments (TXN 54.72, -4.01) missed estimates and lowered its guidance. The PHLX Semiconductor Index ended lower by 1.6%, but remains on track to end the week with a 1.4% gain versus a 1.5% advance for the S&P 500.


On the downside, the consumer staples sector (-0.5%) lagged throughout the day after two heavyweights reported earnings. Procter & Gamble (PG 80.95, -2.14) slumped 2.6% after reporting in-line results on disappointing revenue while PepsiCo (PEP 95.73, -1.55) surrendered 1.6% despite beating estimates.


Today's participation was in-line with average as more than 780 million shares changed hands at the NYSE floor.


Economic data included Initial Claims and New Home Sales:


The initial claims level increased to 295,000 for the week ending April 18 from an unrevised 294,000 for the week ending April 11 while the consensus expected a decline to 288,000 

According to the Department of Labor, there were no special factors that impacted this week's claims reading

The four-week moving average inched up to 285,000 from 283,000

Continuing Claims rose to 2.325 million from 2.275 million

New home sales declined 11.4% in March to 481,000 from an upwardly revised 543,000 (from 539,000) in February while the consensus expected a decline to 520,000 

From January 2013 through November 2014, new home sales averaged about 430,000 per month with little volatility. December 2014 was a turning point that saw sales near 500,000 for the first time since May 2008.

Tomorrow's economic data will be limited to the 8:30 ET release of the Durable Orders report for March ( consensus 0.5%).


Nasdaq Composite +6.8% YTD

Russell 2000 +5.5% YTD

S&P 500 +2.6% YTD

Dow Jones Industrial Average +1.3% YTD

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.