Day Traders Diary


The stock market ended the Tuesday affair on a modestly higher note with the Dow Jones Industrial Average (+0.4%), Nasdaq Composite (+0.3%), and S&P 500 (+0.2%) carving out fresh record highs. The domestically-oriented Russell 2000 (+0.9%) also notched a new all-time high, extending its November gain to 12.0%.


Equity indices jumped out of the gate as a positive tilt in global markets helped Wall Street build on yesterday's gain. However, the broader market pulled back after the opening hour, as crude oil extended its loss. The energy component was under pressure as participants continued assessing the likelihood of an OPEC supply cap agreement. Reports circulated this afternoon that Iran, Iraq, and Indonesia have expressed some misgivings about their participation in a proposed deal. The oil collective is scheduled to meet on November 30 to vote on potential supply control measures. WTI crude finished down 0.4% ($48.07/bbl; -$0.20).


The major averages were able to inch higher in the afternoon as the heavily-weighted consumer discretionary sector (+1.2%) and industrials (+0.5%) outperformed. Meanwhile, the economically-sensitive financial group (+0.1%) erased a slim loss despite modest flattening in the yield curve.


The S&P 500 (+0.2%) settled near its best level of the day, staying above the 2200 price level, which was revisited a few times during the session. Nine sectors ended in the green with telecom services (+2.1%), real estate (+1.7%), and consumer discretionary (+1.2%) outperforming. Conversely, health care (-1.4%) and energy (UNCH) ended with the only losses.


In the health care space (-1.4%), Medtronic (MDT 73.60, -6.98) tumbled 8.7% after the company reported some mixed quarterly results and provided below-consensus earnings guidance for fiscal year 2017. Meanwhile, biotechnology continued to give back some of its post-election gain as the iShares Nasdaq Biotechnology ETF (IBB 281.36, -5.35) fell 1.9%. The ETF rallied in the wake of the election as participants dialed back concerns about a possible introduction of price controls.


Retail names displayed relative strength in the consumer discretionary space (+1.2%) as the SPDR S&P Retail ETF (XRT 46.60, +1.06) gained 2.3%. Home improvement retailers outperformed on the heels of some better-than-expected housing data. Separately, discount retailer Dollar Tree (DLTR 88.68, +6.69) surged 8.2% after reporting mixed quarterly results and guiding fourth-quarter revenue near the high end of consensus estimates.


The high-beta chipmakers outperformed in the technology sector (+0.1%), evidenced by the 1.1% gain in the PHLX Semiconductor Index. Analog Devices (ADI 72.89, +3.07, +4.4%) led the index after the company beat analysts' estimates for the fourth quarter and issued upbeat revenue guidance for the first quarter.


In the financial sector (+0.1%), banking names led as the SPDR S&P Bank ETF (KBE 40.73, +0.23) finished higher by 0.6%. Separately, credit service names finished on a lower note with Visa (V 79.93, -1.76) falling 2.2%. The stock was under pressure after the company agreed to remedial actions related to the EMV transition in the United States.



Treasuries were little changed with the yield on the 2-yr note finishing flat at 1.08% while the yield on the benchmark 10-yr note slipped one basis point to 2.31%.


Today's trading volume was below the recent average of one billion as fewer than 893 million shares changed hands at the NYSE floor.


Today's economic data was limited to the Existing Home Sales Report for October:


Existing home sales increased 2.0% to a seasonally adjusted annual rate of 5.60 million in October from an upwardly revised 5.49 million (from 5.47 million) in September.

The October uptick represented the second consecutive monthly increase, following declines in July and August.

Tomorrow's data will include the 7:00 ET release of the weekly MBA Mortgage Index while weekly Initial Claims ( consensus 243k) and Durable Orders for October ( consensus 1.1%) will each be released at 8:30 ET. The FHFA Housing Price Index for September will cross the wires at 9:00 ET. Separately, the New Home Sales Report for October ( consensus 587k) and the final reading of the University of Michigan Consumer Sentiment Survey for November ( consensus 91.6) are each slated to be released at 10:00 ET. The day's data will be capped off with the FOMC Minutes from the November 2 meeting, which will cross the wires at 14:00 ET.


Russell 2000: +17.3% YTD

Dow Jones: +9.2% YTD

S&P 500: +7.8% YTD

Nasdaq Composite: +7.6% YTD



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