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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

12/29/16

The stock market ended Thursday on a slightly lower note after spending the day inside a narrow range. The S&P 500 ended just below its flat line while the Nasdaq (-0.1%) underperformed throughout the session.

Equity indices displayed some strength at the start, but the opening rally fizzled out shortly after taking shape. The S&P 500 returned to its flat line just 30 minutes after the open and remained near that mark into the afternoon.

Five cyclical sectors ended in negative territory, which overshadowed solid gains among lightly-weighted countercyclical groups like utilities (+1.3%), real estate (+0.9%), and telecom services (+0.4%). To be fair, the influential health care sector (+0.1%) also registered a modest gain, but biotechnology could not keep up.

The iShares Nasdaq Biotechnology ETF (IBB 267.11, -0.97) lost 0.4%, contributing to the relative weakness in the Nasdaq. The top-weighted technology sector (-0.04%) also lagged throughout the day amid weakness in chipmakers. However, the PHLX Semiconductor Index and the tech sector returned to unchanged by the close.

Elsewhere among cyclical sectors, energy (-0.2%) retreated amid a 0.6% decline in crude oil, which slid to $53.74/bbl after yesterday's bearish reading of the API inventory report was confirmed by today's data from the EIA.

The financial sector (-0.7%) also underperformed into the afternoon with the likes of Bank of America (BAC 22.00, -0.33), Citigroup (C 59.38, -0.66), and JPMorgan Chase (JPM 85.89, -0.61) surrendering between 0.7% and 1.4%.

Treasuries registered their second consecutive day of gains, sending the 10-yr yield lower by three basis points to 2.48%. The U.S. Dollar Index (102.70, -0.60) responded to the downtick in the benchmark yield, falling 0.6%.

Both the dollar and Treasuries spent the afternoon inside narrow ranges, seeing little reaction to an executive order from President Obama, calling for 35 Russian diplomats to be expelled from the US. The executive order also sanctioned five entities and six individuals for alleged interference in the 2016 election.

Investor participation remained light with fewer than 700 million shares changing hands at the NYSE floor.

Economic data included initial claims and international trade in goods:

The initial claims report for the week ending December 24 showed claims decreasing 10,000 to 265,000 (Briefing.com consensus 263,000)

There were no special factors driving that reading, which remained below 300,000 for the 95th consecutive week and kept the four-week moving average of 263,000 near a 43-year low

Continuing claims for the week ending December 17 increased 62,000 to 2.102 million. The four-week moving average for this series was 2.042 million, up slightly from the prior week.

November International Trade in Goods showed a deficit of $65.30 billion to follow last month's deficit of $61.90 billion (from $62.00 billion)

Tomorrow's economic data will be limited to the 9:45 ET release of Chicago PMI for December (Briefing.com consensus 55.2).

 

Russell 2000 +19.9% YTD

Dow Jones Industrial Average +13.7% YTD

S&P 500 +10.1% YTD

Nasdaq Composite +8.5% 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.