Day Traders Diary


Stocks rebounded modestly on Tuesday -- reclaiming less than a fifth of their Monday losses -- with energy shares leading the way, helped by a spike in oil prices. The S&P 500 ended higher by 0.2% after finding early support at its 50-day moving average. Small caps outperformed, pushing the Russell 2000 up 0.7%.

Late Monday comments from President Trump's top trade adviser Peter Navarro, who said the White House is not planning to restrict foreign investment as part of its trade actions against China or any other country, continued to be analyzed on Tuesday in the absence of any new developments in the ongoing U.S.-China trade feud.

The energy sector finished atop the S&P 500 sector standings with a gain of 1.4%. News that the U.S. State Department will start imposing powerful sanctions on companies that buy Iranian crude oil past the end of October prompted a crude oil rally -- which, in turn, sent energy stocks higher. WTI crude futures advanced 3.5% to $70.45 per barrel, hitting their highest level in five weeks.

Cyclical sectors, including energy (+1.4%), consumer discretionary (+0.7%), and information technology (+0.5%), finished mostly in the green, with financials (-0.4%) being an exception. Like financials, the countercyclical health care (-0.3%), telecom services (-0.4%), and consumer staples (-0.5%) spaces posted modest declines.

In corporate news, General Electric (GE 13.74, +0.99) spiked 7.8% after announcing plans to spin off its health care business and plans to sell its 62.5% stake in oil and gas company Baker Hughes (BHGE 33.13, +0.69). Also, GE was officially booted from the Dow on Tuesday, replaced by Walgreens Boots Alliance (WBA 66.57, -0.67).

Separately, homebuilder Lennar (LEN 51.61, +2.39) advanced 4.9% after reporting better-than-expected quarterly results, but Harley-Davidson (HOG 41.32, -0.25) slid 0.6% after a series of tweets from President Trump, who criticized the company's decision to move some of its operations overseas due to retaliatory EU tariffs.

Reviewing Tuesday's economic data, which included the Conference Board's Consumer Confidence Index for June and the Case-Shiller 20-City Index for April:

  • The consumer confidence reading for June decreased to 126.4 ( consensus 127.1) from the prior month's revised reading of 128.8 (from 128.0).
    • The key takeaway from the report is that the downturn was driven by a downshift in the Expectations Index, which suggests, according to the Conference Board, that consumers don't anticipate the economy gaining much momentum in the coming months.
  • The Case-Shiller 20-City Index increased 6.6% in April ( consensus +6.8%), and the March increase was revised to 6.7% from 6.8%.

On Wednesday, investors will receive the Durable Goods Orders report for May, the advance readings for May Wholesale Inventories and International Trade in Goods, the Pending Home Sales report for May, and the weekly MBA Mortgage Applications Index.

  • Nasdaq Composite +9.5% YTD
  • Russell 2000 +8.7% YTD
  • S&P 500 +1.9% YTD
  • Dow Jones Industrial Average -1.8% YTD



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