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Leigh Baldwin & Co.

112 Albany Street, Cazenovia, NY 13035 | Phone: (315) 655-2964 Toll Free: 1-800-659-8044

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Day Traders Diary

6/24/15

The stock market ended the midweek session on a broadly lower note with the S&P 500 losing 0.7% and turning negative for the week (-0.1%).

Equity indices began the day with slim losses after the International Monetary Fund rejected Greece's restructuring proposal, putting the two sides back at square one. According to Greek Prime Minister Alexis Tsipras, this was the first time the IMF did not accept equivalent fiscal measures proposed by Greek officials.

Interestingly, the market appeared to be on the comeback trail during the opening hour with the S&P 500 making a brief appearance in the green; however, the index reversed into the red shortly after activist investor Carl Icahn shared his thoughts on the market as part of an appearance on CNBC. During his interview, Mr. Icahn said he believes the market is "extremely overheated," pointing to high-yield bonds in particular.

Mr. Icahn wasn't done there, adding that he liquidated his entire stake in Netflix (NFLX 678.61, -2.58) today. Coincidentally, Netflix announced a 7:1 stock split yesterday evening with Mr. Icahn's comments causing the stock to slide more than 25 points from today's opening high. Meanwhile, the consumer discretionary sector (-0.7%) settled in-line with the S&P 500, but that masked relative strength among homebuilders. Lennar (LEN 51.05, +2.05) spiked 4.2% after reporting better than expected results while iShares Dow Jones US Home Construction ETF (ITB 27.92, +0.24) climbed 0.9%.

Elsewhere among cyclical sectors, only energy (-0.6%) and technology (-0.4%) ended ahead of the S&P 500 while the remaining growth-sensitive groups displayed relative weakness. For its part, the technology sector owed its outperformance to shares of Apple (AAPL 128.18, +1.15), which climbed 0.9%. It is worth noting Carl Icahn said during his CNBC appearance that he believes Apple offers the same opportunity that he saw in Netflix several years ago.

Unlike technology, the financial sector (-0.9%) underperformed throughout the day with Citigroup (C 56.66, -0.73) and Dow component, Goldman Sachs (GS 214.43, -3.97), losing 1.3% and 1.8%, respectively after both names were downgraded to 'Hold' at Deutsche Bank.

Similar to financials, the industrial sector (-0.9%) spent the day among the laggards as transport stocks struggled. The Dow Jones Transportation Average lost 1.9%, narrowing its June gain to 0.1%.

The countercyclical side did not look much better with health care (-1.0%), telecom services (-0.8%), and utilities (-0.8%) ending behind the broader market while consumer staples (-0.4%) outperformed.

Treasuries held gains throughout the day, climbing to highs during the afternoon to send the 10-yr yield lower by four basis points to 2.37%.

Today's trading volume represented the highest level of activity this week with more than 720 million shares changing hands at the NYSE floor.

Economic data was limited to Q1 GDP and MBA Mortgage Index:
  • First quarter GDP declined 0.2% in the third estimate, up from a previously reported 0.7% decline in the second estimate, which is what the Briefing.com consensus expected
    • The upward revisions had a positive effect on real final sales, but it wasn't enough to change the overall outlook as real final sales were revised up to -0.6% from -1.1%
  • The weekly MBA Mortgage Index rose 1.6% to follow last week's 5.5% decline 
Tomorrow, weekly Initial Claims (Briefing.com consensus 271K) and May Personal Income/Spending data will be released at 8:30 ET.
  • Nasdaq Composite +8.2% YTD 
  • Russell 2000 +6.6% YTD 
  • S&P 500 +2.4% YTD 
  • Dow Jones Industrial Average +0.8% 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.