Day Traders Diary



Stocks were restricted to a pretty narrow range on Thursday as investors continued to chew on the GOP's tax reform outline--which was released in the prior session. The Dow (+0.2%), the Nasdaq (unch), and the S&P 500 (+0.1%) all settled with slim gains, but only the S&P 500 managed close at a new all-time high (2,510.06).

The benchmark index was not alone in finishing at a new record high, however, as the Dow Jones Transportation Average (+0.5%), the Russell 2000 (+0.3%), and the S&P MidCap 400 (+0.2%) also rewrote their respective record-high closing marks. 

Conviction was weak at the macro level on Thursday, but there were several individual movers of note. For instance, Dow component McDonald's (MCD 157.49, +3.44) climbed 2.2% after Longbow Research upgraded the company's shares to 'Buy' from 'Neutral' on Thursday morning. 

Health care giants AbbVie (ABBV 88.96, +4.21) and Abbott Labs (ABT 53.64, +1.49) touched new record highs, ending the day with gains of 5.0% and 2.9%, respectively. AbbVie rallied after reaching a settlement with Amgen (AMGN 185.46, +0.58) regarding the intellectual property rights of AbbVie's blockbuster drug Humira. 

Meanwhile, ABT shares climbed after the FDA approved a new Abbott device that is able to monitor blood sugar levels without drawing blood.

On the flip side, Gilead Sciences (GILD 80.91, -2.95) dropped 3.5% after COO Kevin Young announced his plan to retire on Wednesday evening and RBC said that the consensus HCV estimate likely needs to come down. Mr. Young will remain with the company through the first quarter of 2018 and in an advisory capacity thereafter.

Roku (ROKU 23.50, +9.50) had a solid first day trading on the Nasdaq exchange, settling 67.9% above its IPO price of $14.00 per share. The company makes devices that allow its customers to stream media from the internet to their TVs--similar to Apple TV, Amazon Fire Stick, and Google Chromecast.

On the earnings front, BlackBerry (BBRY 10.47, +1.24) surged 13.4% after beating both top and bottom line estimates and issuing above-consensus guidance for fiscal year 2018. Conversely, Rite Aid (RAD 2.03, -0.25) plunged 11.0%, hitting its lowest level in more than four years, after missing revenue estimates.

Out of the S&P 500's 11 sectors, only two finished in negative territory--consumer discretionary (unch) and industrials (-0.1%). As for the rest, seven finished with gains of no more than 0.3% while the lightly-weighted materials (+0.7%) and real estate (+0.6%) groups exhibited relative strength.

In the bond market, shorter-dated issues finished Thursday in the green, overcoming early weakness; the yield on the 2-yr Treasury note slipped two basis points to 1.45%, but traded around 1.48% in the early morning. Meanwhile, the benchmark 10-yr yield settled flat at 2.31% after hovering around 2.33% at the opening bell.

Reviewing Thursday's batch of economic data, which included the third estimate of second quarter GDP, weekly Initial Claims, and Advance International Trade in Goods for August:

  • The third estimate of second quarter GDP pointed to an expansion of 3.1%, while the consensus expected a reading of 3.0%. The second estimate came in at 3.0% last month.
    • The key takeaway from the report is that it was driven by a pickup in both consumer and business spending, which is typically a good mix for accelerating economic growth.
  • The latest weekly initial jobless claims count totaled 272,000 while the consensus expected a reading of 275,000. Today's tally was above the revised prior week count of 260,000 (from 259,000). As for continuing claims, they declined to 1.934 million from the revised count of 1.979 million (from 1.980 million).
    • The key takeaway from the report is that initial claims held below 300,000 despite the impact of the hurricanes. This points to continued tightness in the labor market and should ultimately translate into lower readings in the coming weeks as the hurricane impact diminishes.
  • The Advance report for International Trade in Goods for August showed a deficit of $62.9 billion ( consensus -$65.1 billion), down from a revised deficit of $63.9 billion for July (from -$65.1 billion).

On Friday, investors will receive several pieces of economic data, including August Personal Income ( consensus +0.2), Personal Spending ( consensus +0.1%), and core PCE Prices ( consensus +0.2%) at 8:30 ET, September Chicago PMI ( consensus 58.0) at 9:45 ET, and the final reading of the University of Michigan Consumer Sentiment Index for September ( consensus 95.4) at 10:00 ET.

  • Nasdaq Composite +19.9% YTD
  • Dow Jones Industrial Average +13.3% YTD
  • S&P 500 +12.1% YTD
  • Russell 2000 +9.7% YTD

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