Day Traders Diary

5/13/15

The stock market ended the midweek session on a flat note after sliding from its opening high. The S&P 500 settled just below its flat line to register its third consecutive decline while the Nasdaq Composite (+0.1%) outperformed throughout the day.

Prior to the open, the Retail Sales report for April (0.0%; Briefing.com consensus 0.2%) missed expectations for the fifth consecutive month. The economic disappointment helped Treasuries extend their overnight gains with the benchmark 10-yr yield hitting a morning low at 2.19%; however, Treasuries reversed from their morning highs and spent the day in a steady retreat (10-yr yield +3 bps to 2.28%) while the stock market followed suit.

Only four sectors registered gains, but the top-weighted technology sector (+0.5%) held the lead throughout the session and prevented the S&P 500 from registering a larger loss. In addition, the sector fueled the Nasdaq's outperformance with large cap names like Intel (INTC 32.64, +0.39), Microsoft (MSFT 47.62, +0.27), and Qualcomm (QCOM 69.73, +0.95) climbing between 0.6% and 1.4%.

Elsewhere among cyclical sectors, the industrial space (+0.2%) also spent the day in the green even as transport stocks lagged notably. The Dow Jones Transportation Average lost 1.1%, widening its year-to-date decline to 6.4% as 17 of its 20 components ended in the red. Delta Air Lines (DAL 46.78, +0.68) was a notable standout, adding 1.5% after announcing a $5 billion buyback program and boosting its dividend 50% to $0.135.

On the downside, the utilities sector (-1.1%) spent the session behind its peers while the consumer discretionary space (-0.6%) was the second-weakest performer. Sector heavyweight Comcast (CMCSA 56.28, -1.05) fell 1.8% while retailers also struggled following the disappointing economic data. The SPDR S&P Retail ETF (XRT 98.30, -0.29) lost 0.3%. 

Also of note, the energy sector (-0.3%) was among the early leaders, but the growth-sensitive group was pressured by crude oil, which fell 0.4% to $60.46/bbl. The energy component could not rally even as the Dollar Index (93.72, -0.81) lost 0.9%.

Today's participation was in-line with Monday and Tuesday as roughly 700 million shares changed hands at the NYSE floor.

Economic data included Retail Sales, Import/Export Prices, Wholesale Inventories, and MBA Mortgage Index:

Retail sales were flat in April after increasing an upwardly revised 1.1% (from 0.9%) in March while the Briefing.com consensus expected retail sales an increase of 0.2% 

Auto manufacturers reported a steep decline in the number of units sold in April (16.5 million SAAR from 17.1 million SAAR). That translated into a 0.4% decline at motor vehicle and parts dealers, down from a prior 2.9% increase

Excluding motor vehicles, retail sales increased a modest 0.1% after increasing an upwardly revised 0.7% (from 0.4%) in March while the consensus expected an increase of 0.4%

In the first quarter, the added income that was derived from lower oil prices was used to stockpile additional savings instead of boosting consumption. Now that gasoline prices are again on the rise, consumers are not only not liquidating their savings to pay for the higher gasoline costs, but they are adding more to their savings stockpile

Export prices, excluding agriculture, decreased 0.7% in April after increasing 0.2% in the prior reading 

Excluding oil, import prices fell 0.4%, which followed last month's 0.4% decline

Business inventories increased 0.1% in March after increasing a downwardly revised 0.2% (from 0.3%) in February while the Briefing.com Consensus expected an increase of 0.2% 

The changes in inventories for manufacturers (-0.2%) and merchant wholesalers (0.1%) were known prior to the release. The only new information was that retailer inventories increased 0.3% in March, down from a 0.5% increase in February

The weekly MBA Mortgage Index fell 3.5% to follow last week's 4.6% decline

Tomorrow, weekly Initial Claims (Briefing.com consensus 275K) and April PPI (consensus 0.2%) will be released at 8:30 ET.

Nasdaq Composite +5.2% YTD

Russell 2000 +2.4% YTD

S&P 500 +1.9% YTD

Dow Jones Industrial Average +1.3% YTD