Day Traders Diary


Stocks rallied for a third consecutive session on Monday as investors shelved their trade war fears and set their sights on the Q2 earnings season, which will unofficially kick off on Friday. The S&P 500 and the Nasdaq advanced 0.9% apiece, and the Dow added 1.3%, climbing back into positive territory for the year (+0.2% YTD). The market started in the green and climbed steadily throughout the session.

Growth-sensitive sectors were the top-performing groups on Monday, underlining a risk-on attitude from market participants. Financials (+2.3%), industrials (+1.8%), and energy (+1.5%) finished atop the sector standings, while the top-weighted information technology space (+0.8%) struggled to keep pace -- although it did gain some ground in the afternoon.

On the downside, four groups -- mostly countercyclical -- finished in negative territory. The lightly-weighted utilities sector was particularly weak, tumbling 3.1%, following an impressive four-week run; the group surged 10.5% from June 12 to July 6.

In corporate news, Groupon (GRPN 4.83, +0.47) rallied 10.7% after Recode reported that the company is looking for a buyer, but Twitter (TWTR 44.14, -2.51) dropped 5.4% following a Washington Post report that the company has sharply escalated its battle against fake accounts, putting user growth at risk. Also of note, Dow component Pfizer (PFE 37.16, +0.05) finished roughly flat after President Trump singled the company out for high drug prices.

Elsewhere, U.S. Treasuries sold off, pushing yields higher across the curve; the benchmark 10-yr yield climbed three basis points to 2.86%. WTI crude futures rose 0.3% to $74.04 per barrel -- nearly a new three-and-a-half year high -- and the U.S. Dollar Index ticked up 0.1% to 93.82.

Overseas, the UK's Foreign Minister Boris Johnson, Brexit Minister David Davis, and Parliamentary Private Secretary to the Department of Transportation Chris Green resigned from government due to ideological differences with Prime Minister Theresa May.

Separately, President Trump said China may be "exerting negative pressure" on a deal between the U.S. and North Korea. Over the weekend, North Korean officials accused the U.S. of being "gangster-like" in its demand for denuclearization following two days of talks with Secretary of State Mike Pompeo.

Reviewing Monday's economic data, which was limited to the Consumer Credit report for May:

  • The Consumer Credit report for May showed an increase of $24.6 billion ( consensus $12.4 billion). April credit growth was revised to $10.3 billion from $9.3 billion.
    • The key takeaway from the report is that the surge in credit expansion will serve as a catalyst for a strong pickup in consumer spending that should manifest itself in a strong Q2 GDP number.

Looking ahead, investors will receive the NFIB Small Business Optimism Index for June and the Job Openings and Labor Turnover Survey for June on Tuesday.

  • Nasdaq Composite +12.4% YTD
  • Russell 2000 +11.0% YTD
  • S&P 500 +4.1% YTD
  • Dow Jones Industrial Average +0.2% YTD

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