Day Traders Diary

6/23/15

The major averages ended the Tuesday session on a modestly higher note after spending the bulk of the day near their flat lines. The S&P 500 added 0.1% after trading inside an eight-point range.

Equity indices held modest gains at the start amid continued optimism that Greece will be able to come to terms with its creditors. On that note, the Eurogroup will hold its third meeting in six days tomorrow evening. In addition, better than expected Manufacturing (52.5; consensus 52.2) and Services PMI (54.4; consensus 53.6) readings for the eurozone contributed to the upbeat sentiment overseas.

Once the U.S. session got underway, the S&P 500 held a four-point gain, but surrendered that advance just one hour into the session as heavily-weighted sectors like technology (unch), industrials (-0.2%), and consumer staples (-0.5%) weighed.

The top-weighted technology sector was able to erase the majority of its loss before the final hour, but chipmakers struggled into the afternoon. The PHLX Semiconductor Index lost 0.6% with all but six components ending in the red. On the upside, SunEdison (SUNE 32.13, +0.93) bucked the trend, spiking 3.0%.

Elsewhere, the consumer discretionary sector was underpinned by retailers and homebuilders. The SPDR S&P Retail ETF (XRT 101.69, +0.92) climbed 0.9% while iShares Dow Jones US Home Construction ETF (ITB 27.70, +0.05) added 0.2% following a better than expected New Home Sales report for May.

Also of note, the energy sector (+0.3%) struggled early, but finished among the leaders as crude oil held a solid gain throughout the day, ending the pit session higher by 1.7% at $61.02/bbl.

Similar to cyclical sectors, the four defensively-oriented groups ended the day in mixed fashion. Consumer staples (-0.5%) and utilities (-1.4%) struggled while health care (+0.2%) and telecom services (+1.3%) displayed relative strength. The health care sector eked out a slim gain even as biotechnology struggled with iShares Nasdaq Biotechnology ETF (IBB 383.25, +0.08) ending flat.

Moving on, Treasuries were little changed during afternoon action, but retreated this morning after Federal Reserve Governor Jerome Powell said that two rate hikes could take place before the end of the year if the economy doesn't suffer an unexpected slump. The 10-yr note revisited its flat line during the afternoon, but ultimately slipped into the middle of its range to send the benchmark yield higher by three basis points to 2.40%.

On a related note, the Dollar Index (95.40, +1.07) spiked 1.1% with the greenback jumping 1.6% against the euro (1.1170).

Today's participation was below average with fewer than 700 million shares changing hands at the NYSE floor.

Economic data included Durable Orders, FHFA Housing Price Index, and New Home Sales:

Durable goods orders declined 1.8% in May after declining a downwardly revised 1.5% (from -1.0%) in April while the Briefing.com consensus expected a decline of 0.5% 

As expected, the entire decline can be traced to another big pullback in aircraft orders as Boeing (BA 144.43, -1.27) reported a big drop in sales in May, which translated into a 28.9% decline in defense and nondefense aircraft orders

Motor vehicle orders were flat after increasing 0.4% in April

Excluding transportation, durable goods orders increased 0.5% in May after a 0.3% decline in April (revised from -0.2%) while the consensus expected an increase of 0.6%

The FHFA Housing Price Index for April rose 0.3%, which followed an unrevised increase of 0.3% in March

New home sales hit their highest level since February 2008, increasing 2.2% in May to 546,000 from an upwardly revised 534,000 (from 517,000) in April while the Briefing.com consensus expected a reading of 525,000 

Regionally, there was a big disparity in demand trends with nearly the entire increase coming from an 87.5% spike in sales in the Northeast. Sales in the Midwest (-5.7%) and South (-4.3%) declined on a month-to-month basis. Sales in the West increased 13.1% to 138,000, but remain below January levels

Tomorrow, the weekly MBA Mortgage Index will be released at 7:00 ET while the third estimate of Q1 GDP will be reported at 8:30 ET (Birefing.com consensus -0.2%).

Nasdaq Composite +9.0% YTD

Russell 2000 +7.5% YTD

S&P 500 +3.1% YTD

Dow Jones Industrial Average +1.8% YTD