Day Traders Diary


The stock market began the trading week on a modestly lower note with the S&P 500 surrendering 0.5% after spending the day in a 13-point range. Today's session marked the end of November, a month during which the S&P 500 added 0.1% while the Nasdaq Composite (+1.1% month-to-date) outperformed.


Equities held slim gains at the start of the trading day, but the early strength faded quickly, sending the S&P 500 below its flat line where the index remained into the afternoon. The S&P 500 tried to stage a rebound during afternoon action, but that move was followed by a slip to new lows. The benchmark index settled near its worst level of the day, masking gains in five of ten sectors.


For instance, energy (+0.4%) and technology (+0.1%) outperformed from the start, but their strength could not lift the overall market. The energy sector settled in the lead even though crude oil surrendered a solid intraday gain to end lower by 0.2% at $41.63/bbl. For the month, WTI crude tumbled 10.7% while the energy sector lost 0.8%.


As for technology, the top-weighted sector received support from chipmakers, evidenced by a 1.0% spike in the PHLX Semiconductor Index, which gained 2.2% for the month.


Similar to energy and technology, materials (+0.2%), utilities (+0.2%), and telecom services (+0.4%) posted gains, but it is worth noting that together the three sectors account for no more than 9.0% of the entire market.


On the downside, the health care sector (-1.3%) was pressured by daylong weakness in biotechnology as the iShares Nasdaq Biotechnology ETF (IBB 334.37, -6.64) surrendered 2.0%.


Elsewhere, consumer discretionary (-0.8%) and industrials (-0.7%) also struggled throughout the trading day. Retailers endured heavy selling amid reports of sluggish sales growth on Black Friday with SPDR S&P Retail ETF (XRT 44.57, -0.99) falling 2.2%. Even Target (TGT 72.51, -0.93) lost 1.3% despite making upbeat comments about the start of the holiday shopping season.


Staying in the discretionary space, Staples (SPLS 12.07, -0.24) ended lower by 2.0% after the New York Post reported the company's acquisition of Office Depot (ODP 6.59, -0.16) is likely to hit a regulatory road block.


Similar to stocks, Treasuries spent the day in a very narrow range. The 10-yr note held a modest loss during overnight action, but it ticked into the green in the morning to end on its high with the benchmark yield down one basis point at 2.21%.


On a separate note, the International Monetary Fund announced that China's yuan will be added to the special drawing rights basket, meaning five currencies will be represented in the SDR starting from October 1, 2016. Following the move, the yuan will make up almost 11.0% of the SDR, which is a smaller weighting than the currency had been expected to receive.


Today's intraday participation was very light, but a late surge in activity took place just before the closing bell to push the final NYSE floor volume above the 1.1 billion share mark.


Economic data included Chicago PMI and Pending Home Sales:


The Chicago Purchasing Managers Index for November dipped to 48.7 from 56.2 in October while the consensus expected a reading of 55.0

New orders were largely responsible for the pullback as the related index fell to 44.1, its lowest level since March, from 59.4 in October

Other components saw little change with Employment and Supplier Deliveries holding above 50 while Order Backlogs have remained below 50 for the tenth consecutive month, which represents ongoing contraction

Pending home sales for October rose 0.2% while the consensus expected an increase of 0.7%

Tomorrow, October Construction Spending ( consensus 0.7%) and the November ISM Index (consensus 50.4) will both be released at 10:00 ET.


Nasdaq Composite +7.9% YTD

S&P 500 +1.1% YTD

Dow Jones Industrial Average -0.6% YTD

Russell 2000 -0.4% 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.