Day Traders Diary



Stocks revived a rebound rally on Thursday following a midweek slump, pushing the S&P 500 higher by 0.8%. The Nasdaq Composite and the Dow Jones Industrial Average did even better, climbing 1.0% and 1.2%, respectively, while the small-cap Russell 2000 lagged a bit, finishing with a gain of 0.7%. A late bout of selling took the major averages from their session highs, leaving them near the middle of their daily ranges.

Financial shares paced Thursday's rally ahead of earnings results from JPMorgan Chase (JPM 113.37, +2.75), Citigroup (C 72.13, +2.24), and Wells Fargo (WFC 52.70, +0.77), all of which will report on Friday morning -- unofficially marking the start of the first quarter earnings season. A better-than-expected Q1 report from BlackRock (BLK 533.01, +7.70, +1.5%), which beat both earnings and revenues estimates, helped fuel some optimism ahead of the more influential releases.

In terms of sector standings, the financial group was the top performer with a gain of 1.8%, followed by industrials (+1.5%), technology (+1.3%), and materials (+1.1%). The energy sector (unch) underperformed, cooling off from a big three-session rally, as crude oil prices fought to extend a three-year high. West Texas Intermediate crude futures were down as much as 1.2% on Thursday, but eventually finished the session higher by 0.5% at $67.18 per barrel.

WTI crude futures have had a big week thus far, spiking 8.3%, as escalated geopolitical tensions in the oil-rich Middle East have led investors to bet on a slowdown in production. The market has been awaiting a U.S.-led strike on the Syrian government after it allegedly attacked the rebel-held town of Douma with chemical weapons over the weekend. However, the timing of said strike became much less clear after President Trump said in a tweet on Thursday morning that the attack "[c]ould be very soon or not so soon at all!"

The president's tweet seemed to help ease fears regarding the situation in Syria -- or, at the very least, temporarily put it out of investors' minds. 

Wall Street's risk-on tone carried over into other financial markets, with safe-haven assets moving lower. Gold futures dropped 1.5% to $1342.10/oz, the Japanese yen declined 0.4% against the U.S. dollar to 107.26, and U.S. Treasuries slid across the curve, pushing yields higher; the yield on the benchmark 10-yr Treasury note jumped four basis points to 2.83%. On a related note, the CBOE Volatility Index declined 1.72 points, or 8.5%, to 18.52 -- hitting a three-week low.

The stock market was higher throughout Thursday's session, but was pretty jumpy at times, pointing to a lack of conviction among traders. Volume remained light with just 746 million shares changing hands at the New York Stock Exchange; the 50-day moving average is 953 million shares. 

Reviewing Thursday's economic data, which was limited to Export/Import Prices for March and the weekly Initial Claims report:

  • Import prices excluding oil rose 0.2% in March after increasing an unrevised 0.5% in February, while export prices excluding agriculture decreased 0.1% after rising an unrevised 0.2% in February.
    • The overall month-over-month changes are on the softer side, yet the key takeaway is that the year-over-year changes in core prices reveal a firming inflation trend.
  • The latest weekly initial jobless claims count totaled 233,000, while the consensus expected a reading of 230,000. Today's tally was below the unrevised prior week count of 242,000. As for continuing claims, they rose to 1.871 million from a revised count of 1.818 million (from 1.808 million).
    • Initial claims have held below 300,000 for 162 straight weeks.

On Friday, investors will receive the preliminary reading of the University of Michigan Consumer Sentiment Index for April ( consensus 100.6) and the Job Openings and Labor Turnover Survey for February; both pieces of data will be released at 10:00 AM ET.

  • Nasdaq Composite: +3.4% YTD
  • Russell 2000: +1.4% YTD
  • S&P 500: -0.4% YTD
  • Dow Jones Industrial Average: -1.0% YTD

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