Day Traders Diary

2/12/18

Equities quietly reclaimed a nice chunk of last week's losses on Monday, with the Dow climbing 1.7%, the Nasdaq rising 1.6%, and the S&P 500 adding 1.4%.

There was some of last week's volatility at the opening bell, but stocks spent the majority of the day in a steady ascension. A modest sell off in the late afternoon left the major stock indices a step below their session highs. At its best mark of the day, the S&P 500 was up 2.0%.

Each of the S&P 500's 11 sectors advanced on Monday, with 8 adding at least 1.0%.

The materials (+2.1%) and technology (+1.8%) sectors were the strongest groups, while the telecom services (+0.8%), utilities (+0.8%), and real estate (+0.3%) sectors were the weakest.

Within the tech space, Apple (AAPL 162.71, +6.30) showed particular strength, jumping 4.0%, and CSRA (CSRA 40.39, +9.57) spiked 31.1% after agreeing to be acquired by General Dynamics (GD 209.53, -2.57) for approximately $9.6 billion, or $40.75 per share, in cash--which is a 32.2% premium over Friday's closing price.

It's also worth mentioning that Qualcomm (QCOM 65.66, +1.67) and Broadcom (AVGO 244.40, +8.90) are scheduled to meet on Wednesday to discuss a possible merger, which Broadcom says it has committed financing for. The two companies climbed 2.6% and 3.8% on Monday, respectively.

The energy sector (+1.7%) led for much of the day, but weakened in the afternoon as the price of crude oil came down from its session high. West Texas Intermediate crude futures were up around 2.5% at their best mark of the day, but finished higher by just 0.2% at $59.30 per barrel. Still, the modest gain broke a six-session losing streak for the commodity.

In the bond market, U.S. Treasuries were under pressure on Monday, pushing yields higher across the curve. The yield on the benchmark 10-yr Treasury note climbed three basis points to 2.86%, closing at a fresh four-year high, while the 2-yr yield ticked up one basis point to 2.07%.

In Washington, the White House released its infrastructure spending plan and its 2019 budget proposal on Monday morning.

The infrastructure plan calls for $200 billion in federal spending, which will be used as seed money to spur additional spending by state and local governments. The White House projects the plan would generate at least $1.5 trillion in total spending over the next 10 years.

Meanwhile, the budget proposal calls for $4.4 trillion of spending, but it's highly unlikely to make it through Congress, which passed a bipartisan deal last week.

Monday's lone economic report--the Treasury Budget for January--showed a surplus of $49.2 billion (Briefing.com consensus $51.0 billion) versus a surplus of $51.3 billion for January 2017. The Treasury Budget data is not seasonally adjusted, so the January surplus cannot be compared to the $23.2 billion deficit registered in December.

Nasdaq Composite: +1.1% YTD

Dow Jones Industrial Average: -0.5% YTD

S&P 500: -0.7% YTD

Russell 2000: -2.9% YTD