Day Traders Diary


The stock market endured a range-bound Friday, which was a fitting end to a quiet week. The S&P 500 settled lower by 0.2% after spending the day in a six-point range while the Nasdaq Composite (unch) outperformed slightly. For the week, the S&P 500 added 0.2% while the Nasdaq gained 0.8%.

Equity indices began the day with slim losses after the Core CPI for April (+0.3%; consensus 0.2%) showed the largest monthly increase since January 2013. The hotter than expected reading invited speculation that an uptick in inflation could provide ammunition for an argument favoring a rate hike in the near term, which kept a lid on equities today.

Furthermore, Fed Chair Janet Yellen spoke at the Greater Providence Chamber of Commerce and reiterated that the central bank is ready to begin raising rates later this year. Once again, Ms. Yellen stated that in order to begin normalizing policy, the Fed needs to see continued improvements in labor market conditions and there needs to be reasonable confidence that inflation will move back toward the 2.0% target over the medium term.

Treasuries hit their session lows after Ms. Yellen's speech crossed the wires, but they returned to their intraday levels shortly thereafter. The 10-yr note settled in the middle of its intraday range, pushing the benchmark yield higher by two basis points to 2.21%.

Nine sectors ended the day in negative territory while technology (+0.02%) avoided a lower close by a hair and contributed to the daylong outperformance of the Nasdaq Composite. Shares of Apple (AAPL 132.54, +1.15) climbed 0.9%, underpinning the move, while Hewlett-Packard (HPQ 34.76, +0.93) gained 2.8% after reporting a one-cent beat and guiding Q3 earnings below consensus. Most other large cap sector members registered losses, but high-beta chipmakers offset some of that weakness with the PHLX Semiconductor Index adding 0.2%.

Elsewhere, industrials (-0.4%) lagged throughout the day with transport stocks responsible for the weakness. As a result, the Dow Jones Transportation Average fell 0.8%, extending this week's decline to 2.3%. The underperformance among transport names overshadowed a 4.3% spike in the shares of Deere (DE 93.33, +3.87) after the company beat bottom-line estimates on light revenue.

Similar to industrials, the energy sector (-0.4%) lagged throughout the day. Crude oil kept the sector under pressure, falling 1.7% to $59.66/bbl. For the week, WTI crude lost 1.5% while the energy sector fell 0.8%.

True to recent form, today's participation was well below average with just 604 million shares changing hands at the NYSE floor, which represented the lowest total observed so far in 2015.

Economic data was limited to the Consumer Price Index:

The CPI index increased an in-line 0.1% in April after increasing 0.2% in March 

After two consecutive months of increases, energy prices again turned negative in April with total energy prices falling 1.3% after increasing 1.1% in March

Food prices were flat in April after declining 0.2% in March

Excluding food and energy, core CPI increased 0.3% in April after increasing 0.2% in March while the consensus expected an increase of 0.2% 

That was the largest monthly increase in core prices since a 0.3% gain in January 2013

Bond and equity markets will be closed on Monday in observance of Memorial Day.

On Tuesday, April Durable Orders ( consensus -0.6%) will be reported at 8:30 ET while the Case-Shiller 20-city Index for March (consensus 4.6%) and March FHFA Housing Price Index will both be released at 9:00 ET. The day's data will be topped off with the 10:00 ET release of April New Home Sales (consensus 510K) and the Consumer Confidence report for May (consensus 94.0).


Nasdaq Composite +7.5% YTD

Russell 2000 +4.0% YTD

S&P 500 +3.3% YTD

Dow Jones Industrial Average +2.3% YTD

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