Day Traders Diary

12/28/17

It was a literal grind for the major indices Thursday, which held to extremely tight trading ranges throughout the day, clinging to modest gains that got extended slightly in the final hour of trading. 

When it was all said and done, the major indices closed up between 0.2% and 0.3%.

There wasn't much trading excitement in the stock market because there was a dearth of market-moving news, as well as a dearth of participants.  For the third day running, extremely light trading volume reflected the fact that many market participants have checked out until the new year.

Just 527 million shares traded at the NYSE, which was the lowest total this week and the lowest for a late-December session in two years.

Much of today's hoopla revolved around bitcoin, which slumped as much as 11% overnight on the news that South Korea is going to instill new regulations that ban anonymous trading accounts and enable authorities to close exchanges when deemed necessary.

Beyond that, the moves in the stock market were incremental.  Ten out of 11 S&P 500 sectors closed the day higher, yet their gains ranged from 0.09% (health care and energy) to 0.52% (telecom services).

The lone loser was the consumer staples sector, which declined 0.19%.

The Dow Jones Transportation Average (-0.4%) underperformed after trucking company J. B. Hunt (JBHT 115.24, -0.23, -0.2%) disappointed with some fourth quarter earnings guidance.  J.B. Hunt and the transportation average, however, both closed well off their lows of the day thanks to the late burst of buying interest, which led to the 71st record-high close for the Dow Jones Industrial Average this year.

Separately, natural gas futures moved up sharply ($2.91, +$0.18, +6.6%) as temperatures moved down sharply across the Midwest and Northeast, stoking increased heating demand.  Natural gas prices were also helped by a report from the government showing a net decrease of 112 billion cubic feet of working gas in storage for the week ending December 22.

Oil prices, which had been lower for most of the day despite a report showing a 4.6 million barrel drawdown in crude oil stockpiles, reversed course late and settled the day 0.4% higher at $59.85 per barrel.

Reviewing Thursday's economic data, which included the initial claims, Chicago PMI, and advance reports for international trade in goods and wholesale inventories:

• Initial claims for the week ending December 23 were 245,000 (Briefing.com consensus 238,000), unchanged from the prior week, while continuing claims for the week ending December 16 increased by 7,000 to 1.943 million.
  • Initial claims have held below 300,000 for 147 straight weeks.
• The MNI Chicago Business Barometer, otherwise referred to as the Chicago Purchasing Managers Index, surged to 67.6 in December (Briefing.com consensus 61.9) from 63.9 in October.
  • The key takeaway from the report is that manufacturing conditions in the Chicago Fed region are strong, as the December reading is the highest since March 2011.
• The advance report for international trade in goods for November showed a widening in the deficit to $69.7 billion from -$68.1 billion in October
• The advance report for wholesale inventories for November showed a 0.7% increase on the heels of a 0.4% decline in October

There is no economic data of note scheduled for release on Friday.

• Nasdaq Composite: +29.1% YTD
• Dow Jones Industrial Average: +25.6%
• S&P 500: +20.0% YTD
• S&P Midcap 400 Index: +15.1%
• Russell 2000: +14.1%