Day Traders Diary

6/22/15

The stock market opened the new trading week on a higher note with the Dow and S&P 500 gaining 0.6% apiece while the Nasdaq Composite (+0.7%) outperformed.

Equity indices spent the entire Monday session in the green with investor sentiment receiving a boost from reports indicating Greek officials submitted a new proposal to the Eurogroup. However, regional officials did not share the market's optimism with Germany's Finance Minister Wolfgang Schaeuble saying he does not see anything new in the proposal. The Eurogroup met briefly today, setting the stage for tonight's emergency Euro Summit that was called by European Council President Donald Tusk.

Today's developments pressured global bonds with Germany's 10-yr bund yield spiking 12 basis points to 0.88%. Similarly, the U.S. 10-yr note retreated throughout the day, sending its yield higher by ten basis points to 2.36%.

Some of the outflows from the Treasury market made their way into equities as nine of ten sectors posted gains while the rate-sensitive utilities sector (-0.1%) was pressured by today's increase in yields.

Meanwhile, another countercyclical sector—health care (+0.8%)—spent the day among the leaders thanks to strength in biotechnology and insurance names. The iShares Nasdaq Biotechnology ETF (IBB 383.16, +5.68) gained 1.5% while Cigna (CI 162.65, +7.39) climbed 4.8% after rejecting Anthem's (ANTM 171.05, +5.99) offer at $184/share. Also of note, The Wall Street Journal reported that Aetna (AET 128.12, +4.05) offered to acquire Humana (HUM 189.94, -12.37) for an undisclosed amount.

Over on the cyclical side, three of six sectors—energy (+1.0%), financials (+0.8%), and technology (+0.7%)—settled ahead of the broader market with energy boosted by a 26.0% spike in the shares of Williams Companies (WMB 60.93, +12.59) after the company rejected an offer to merge with Energy Transfer Equity (ETE 65.06, -3.33) as part of an all-stock transaction valued at $64/share. For its part, crude oil erased its overnight loss to end higher by 0.6% at $60.01/bbl.

Elsewhere, the top-weighted technology sector received support from some of its largest components like Apple (AAPL 127.61, +1.01), Intel (INTC 32.26, +0.19), and Qualcomm (QCOM 67.36, +0.48) with the trio gaining between 0.6% and 0.8%.

Today's participation was below recent averages as fewer than 700 million shares changed hands at the NYSE floor.

Economic data was limited to Existing Home Sales, which increased 5.1% in May to 5.35 million SAAR from an upwardly revised 5.09 million (from 5.04 million) in April while the Briefing.com consensus expected an increase to 5.26 million

That was the most existing homes sold in one month since November 2009 when 5.44 million were sold

Much of the gain came from an increase in first-time home buyers who accounted for 32% of all sales in May, up from 30% observed in April, representing the largest contribution since September 2012

Tomorrow, May Durable Orders (Briefing.com consensus -0.5%) will be reported at 8:30 ET while the FHFA Housing Price Index for April will be released at 9:00 ET. The day's data will be topped off with the 10:00 ET release of May New Home Sales (consensus 525K)

Nasdaq Composite +8.8% YTD

Russell 2000 +7.3% YTD

S&P 500 +3.1% YTD

Dow Jones Industrial Average +1.7% YTD