Day Traders Diary


Equities registered modest gains as the S&P 500 added 0.4%, registering its sixth consecutive weekly gain. The benchmark index spent the bulk of today's quiet session inside of a four-point range until the now-familiar final-hour rally sent the index to a fresh nominal record high of 1798.18. The Dow Jones Industrial Average (+0.5%) outperformed as all but five components finished in positive territory.

All ten sectors registered gains with energy (+0.7%) and materials (+0.6%) ending in the lead. The energy sector received support from Exxon Mobil (XOM 95.27, +2.05), which rallied 2.2% after Berkshire Hathaway disclosed a 40.1 million share stake in the largest sector component. On a related note, crude oil ended little changed at $93.82/bbl after spending the entire session near its flat line.

Meanwhile, the other commodity-related sector, materials, was underpinned by steelmakers as the Market Vectors Steel ETF (SLX 49.04, +0.49) gained 1.0%. Similar to crude oil, the underlying commodities ended little changed. Gold futures added $1.00 to $1287.50/ozt while copper futures ticked up one cent to $3.1715/lb.

Other cyclical sectors were more of a mixed bag as financials (+0.5%) outperformed while consumer discretionary (+0.3%), industrials (+0.3%), and technology (+0.3%) lagged.

Speaking of technology, the tech-heavy Nasdaq (+0.3%) underperformed as participants displayed limited buying interest in some momentum names like Facebook (FB 49.01, +0.02), (PCLN 1139.53, +2.09), and Tesla (TSLA 135.45, -2.15). In addition, the largest Nasdaq component, Apple (AAPL 524.99, -3.17) lost 0.6%.

With regard to countercyclical sectors, consumer staples (+0.2%) underperformed while health care (+0.6%), utilities (+0.6%), and telecom services (+0.5%) ended ahead of the broader market.

Treasuries registered modest losses as the 10-yr yield ticked up one basis point to 2.70%.

Light volume has been a recurring theme throughout the week, but today's options expiration prevented another below-average finish as just under 800 million shares changed hands on the floor of the New York Stock Exchange.

On the economic front, wholesale inventories increased 0.4% in September after increasing an upwardly revised 0.8% (from 0.5%) in August ( consensus +0.3%). The strong gain in wholesale inventories in September, along with the large upward revision to August, will likely result in a sizable upward revision to third quarter GDP. The Bureau of Economic Analysis assumed that wholesale inventories fell 0.1% in September, which was obviously well below what actually occurred.

Export prices, excluding agriculture, ticked down 0.4% in October after increasing 0.3% in the prior reading. Excluding oil, import prices were unchanged, which followed last month's uptick of 0.2%.

Separately, industrial production levels fell 0.1% in October after increasing an upwardly revised 0.7% (from 0.6%) in September ( consensus +0.1%). All in all, industrial production held up well in October considering the dire predictions that were associated with the government shutdown. In fact, the government shutdown seemed to have no negative effects on the entire industry.

The contraction in industrial production can be completely attributed to normal and cyclical fluctuations in utilities and mining. Utilities production dropped -1.1%, but that type of decline was expected following an unusually strong September (4.5%) gain. Mining production fell 1.6%, which, again, was a normal pullback after six consecutive months of gains.

Lastly, the Empire Manufacturing Survey for November registered a reading of -2.2, which was down from the prior month's reading of 1.5. Economists polled by expected the survey to improve to 4.3.

On Monday, September net long-term TIC flows and the November NAHB Housing Market Index will be released at 9:00 ET and 10:00 ET, respectively.

Nasdaq +32.0% YTD
Russell 2000 +31.4% YTD
S&P 500 +26.1% YTD
DJIA +21.8% YTD

All comments contained herein are for informational purposes only, and should not be considered as a solicitation to buy or sell any security. The firm does not guarantee the accuracy or completeness of the information or make any warranties regarding results from it's usage.