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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

2/22/18

 

The S&P 500 (+0.1%) and the Nasdaq (-0.1%) ended Thursday's session little changed, keeping their weekly losses intact. The Dow, meanwhile, rallied 0.7% to end a two-session losing streak and trim its weekly decline to 1.0%. The S&P 500 also ended a two-session skid on Thursday, while the Nasdaq extended its losing streak to four sessions.

Stocks opened in positive territory and crept higher through the first two hours of trading. However, sentiment started to shift as the S&P 500 approached its 50-day simple moving average (2729). The key technical level proved to be an area of resistance for the benchmark index, which quickly started retracing its gain after topping out at 2731 (+1.1%).

Trading was choppy from there, but the S&P 500 was able to stabilize a bit after finding support at its Wednesday close (2701).

In the end, nine of eleven S&P 500 sectors finished in positive territory, with gains ranging from 0.1% (technology) to 1.1% (real estate and energy).

The energy sector (+1.1%) was among the top-performing groups, helped by an increase in the price of crude oil. WTI crude futures climbed 1.8% to $62.77 per barrel after the Department of Energy reported a draw of 1.6 million barrels for the week ended February 16. The consensus estimate called for a build of 1.8 million barrels.

Chesapeake Energy (CHK 3.20, +0.57) also helped underpin a positive bias within the energy group, rallying 21.7% on better-than-expected Q4 results.

Conversely, the heavily-weighted financial sector (-0.8%) was the weakest group as Treasury yields slipped from multi-year highs; the 10-yr yield settled at 2.92% after closing Wednesday at 2.94%--its highest level in four years. On a related note, a $29 billion 7-yr Treasury note auction drew a high yield of 2.84% on a bid-to-cover of 2.49.

Overseas, equity indices in the Asia-Pacific region finished Thursday mostly lower, although China's Shanghai Composite climbed 2.2% after a week-long closure for the Lunar New Year. Meanwhile, the major European bourses finished roughly flat, with France's CAC (+0.2%) exhibiting relative strength.

In currencies, the U.S. Dollar Index dropped 0.4% to 89.70, marking its first loss in a week. The greenback tumbled 0.4% against the euro (1.2327) and 1.0% against the yen (106.69).

Thursday's batch of economic data was pretty light, with investors receiving just two reports--weekly Initial Claims and Leading Indicators for January:

  • The latest weekly initial jobless claims count totaled 222,000, while the Briefing.com consensus expected a reading of 233,000. Today's tally was below the revised prior week count of 229,000 (from 230,000). As for continuing claims, they declined to 1.875 million from a revised count of 1.948 million (from 1.942 million).
    • The key takeaway from this report is that it covers the period in which the survey for the February employment report was completed. The low level of initial claims will most likely drive economists to estimate another decent-sized gain (200K+) for nonfarm payrolls.
  • The Conference Board Leading Economic Index increased 1.0% in January (Briefing.com consensus 0.8%). The prior month's reading was left unrevised at +0.6%.
    • The key takeaway from the report is that the uptick was widespread; in fact, there wasn't a negative contribution from any of the ten components.

Investors will not receive any economic data on Friday.

  • Nasdaq Composite: +4.4% YTD
  • S&P 500: +1.1% YTD
  • Dow Jones Industrial Average: +1.0% YTD
  • Russell 2000: -0.4% YTD
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