Day Traders Diary


The stock market ended the final June session on a higher note, but that did not stop the S&P 500 (+0.3%) from registering a 2.1% loss for the month.

Equity indices spent the first three hours of the day in a steady retreat from their opening highs with the S&P 500 making a momentary appearance in the red after German Chancellor Angela Merkel said that Germany cannot consider new proposals from Greece until after Sunday's referendum.

However, the benchmark index climbed to a fresh high during afternoon action with the move taking place amid reports Greece could cancel its Sunday referendum if negotiations are resumed and an agreement could be reached on required prior actions. To that point, Eurogroup Chief Jeroen Dijsselbloem acknowledged the receipt of a new proposal from the Greek government with the offer set to be reviewed at tomorrow's Eurogroup meeting.

The speculation about a potential cancellation of the referendum had little impact on the euro, which spent the afternoon near its session low reached after Ms. Merkel's comments. The single currency slid 0.6% against the dollar to 1.1145.

Meanwhile, Treasuries spent the afternoon near their flat lines after erasing their overnight losses. The 10-yr note ended just below its flat line with its yield higher by a basis point at 2.34%, which represented a 22-basis point increase since the end of May.

Seven sectors settled in the green with energy (+0.6%) and consumer discretionary (+0.5%) showing relative strength throughout the day. The energy sector rallied behind crude oil, which climbed 1.9% to $59.44/bbl. Despite today's outperformance, the energy sector still lost 3.6% for the month.

Similar to energy, eight other sectors finished the month in negative territory while the consumer discretionary sector (+0.5%) added 0.5% thanks to today's outperformance. Homebuilders represented an area of relative strength in June with iShares Dow Jones US Home Construction ETF (ITB 27.45, +0.02) adding 0.1% today to extend its monthly gain to 3.1%.

Elsewhere, the top-weighted technology sector (+0.2%) spent the day just behind the broader market as several large cap names struggled while high-beta chipmakers fared relatively well. The PHLX Semiconductor Index gained 0.4% with all but eight components ending in the green. Despite today's strength, the Semiconductor Index lost 8.7% in June.

The underperformance among large cap tech names did not stop the Nasdaq Composite (+0.6%) from ending ahead of the broader market as biotechnology displayed relative strength. The iShares Nasdaq Biotechnology ETF (IBB 368.97, +8.40) gained 2.3% while the health care sector (+0.4%) settled ahead of other countercyclical groups.

Today's trading volume was heavier than average as quarter-end flows contributed to the increased activity with more than a billion shares changing hands at the NYSE floor.

Economic data included Chicago PMI, Consumer Confidence, and Case-Shiller 20-city Index:
  • The Chicago PMI increased to 49.4 in June from 46.2 in May while the consensus expected an increase to 50.0 
    • According to the report, manufacturing activity in the Chicago region has contracted in 4 out of the last 5 months 
    • The contraction in production eased in June, as the related index increased to 49.8 from 45.8 in May 
    • Unfortunately, the contraction may not end next month as the Order Backlogs Index fell to 41.0 in June from 47.3 in May, which was the lowest reading since September 2009 
  • The Conference Board's Consumer Confidence Index increased to 101.4 in June from a downwardly revised 94.6 (from 95.4) in May while the consensus expected an increase to 97.5 
    • The Expectations Index increased to 94.6 in June from 86.2 in May while the Present Situation Index rose to 111.6 from 109.5 
  • The Case-Shiller 20-city Home Price Index for April rose 4.9% against a 5.6% increase expected by the consensus 
    • This followed the previous month's increase of 5.0% 
Tomorrow, the weekly MBA Mortgage Index will be released at 7:00 ET while June Challenger Job Cuts will be reported at 7:30 ET. The ADP Employment Report for June ( consensus 220K) will be released at 8:15 ET while May Construction Spending (consensus 0.3%) and June ISM Index (expected 53.2) will both be reported at 10:00 ET.
  • Nasdaq Composite +5.3% YTD 
  • Russell 2000 +4.0% YTD 
  • S&P 500 +0.2% YTD 
  • Dow Jones Industrial Average -1.1% YTD

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