Day Traders Diary



      The S&P 500 is slightly higher this afternoon, up 0.1%, hoping to hold on for its first win of the week. Meanwhile, the Nasdaq Composite trades flat and the Dow Jones Industrial Average trades higher by 0.9% after lagging behind the other major indices earlier in the week. The benchmark S&P 500 has been in the green since bouncing off its 50-day simple moving average (2748) early in the session, and, at its best mark of the day, was up 0.5%.

      S&P sectors are pretty evenly split between green and red this afternoon, with six trading in the green and five trading in the red. The financials (+0.3%), technology (+0.3%), and industrials (+0.4%) sectors are the strongest groups, while the energy (-0.8%) and materials (-0.7%) spaces are the weakest.

      The energy sector has struggled following news that the Federal Energy Regulatory Commission revised its policies so that master limited partnerships (MLPs) will no longer be able to recover an income tax allowance for the cost of service. Meanwhile, Monsanto (MON 118.33, -4.82) has weighed on the materials space, losing 3.9%, after reports that its pending merger with Bayer will face additional hurdles from antitrust officials.

      In other corporate news, Dollar General (DG 92.98, +3.78) is up 4.2% after reporting an increase of 3.3% in same store sales for the fourth quarter and issuing better-than-expected earnings and revenue guidance for fiscal year 2019. Conversely, toymakers Mattel (MAT 13.83, -0.36) and Hasbro (HAS 87.44, -1.08) have slid 2.6% and 1.2%, respectively, following news that Toys 'R' Us plans to liquidate its U.S. operations.

      Peter Navarro, the Director of the White House National Trade Council, appeared on CNBC this morning, attempting to calm fears over a potential trade war. Equities rallied to new session highs following the conclusion of his interview, but came back down shortly thereafter. 

      In the bond market, Treasuries have slipped into negative territory after trading a tick higher earlier in the session. The benchmark 10-yr yield, which moves inversely to the price of the 10-yr Treasury note, is currently up one basis point at 2.83%. Meanwhile, the 2-yr yield is up four basis points at 2.29%.

      Investors received a large batch of economic data on Thursday that included export and import prices for February, the weekly Initial Claims report, the Empire State Manufacturing Survey for March, the Philadelphia Fed Index for March, and the NAHB Housing Market Index for March:

      • Import prices excluding oil rose 0.5% in February after increasing a revised 0.5% in January (from 0.4%). Export prices excluding agriculture increased 0.2% in February after rising a revised 0.8% in January (from 0.9%).
        • The price index for fuel imports was down 0.6% in February, so the key takeaway from the report is that the import price increase was driven by nonfuel prices, which is to be expected somewhat given the weakness in the dollar.
      • The latest weekly initial jobless claims count totaled 226,000, as expected. Today's tally was below the revised prior week count of 230,000 (from 231,000). As for continuing claims, they rose to 1.879 million from a revised count of 1.875 million (from 1.870 million).
        • The key takeaway from the report is that the initial claims level will continue to drive expectations for another solid gain in nonfarm payrolls in March.
      • The Empire Manufacturing Survey for March rose to 22.5 ( consensus 15.0) from the prior month's unrevised reading of 13.1.
      • The Philadelphia Fed Survey for March decreased to 22.3 ( consensus 23.7) from an unrevised 25.8 in February.
        • The key takeaway from the report is that 64% of firms reported labor shortages while 70% of firms highlighted skills mismatches between requirements and available labor. These responses could be a potential harbinger of wage inflation.
      • The NAHB Housing Market Index for March decreased to 70 ( consensus 72) from a revised reading of 71 in February (from 72).

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