Day Traders Diary

7/10/15

The major averages ended the week on an upbeat note with the S&P 500 climbing 1.2%. Thanks to the advance, the benchmark index returned above its 200-day moving average (2,056), ending the week little changed.

Equities surged out of the gate after reports from last evening indicated that Greek officials sent a bailout request to the country's creditors, seeking EUR53.50 billion to cover loan obligations until June 2018. Interestingly, the proposal was very similar to the one that was rejected by 61.3% of voters in the Greek referendum on July 5. According to reports from Athens, the Greek parliament is expected to ratify the offer, but there was no official statement from the Eurogroup before the closing bell.

Furthermore, the Greek proposal includes a requirement for the creditors' commitment to restructure long-term debt; however, securing that commitment will be very difficult considering Germany's Finance Minister Wolfgang Schaeuble was quoted yesterday by Reuters as saying debt restructuring is not possible because it would "infringe the system of the European Union."

The lack of a response from the creditor side did not stop global equities from rallying with France's CAC leading European markets higher with a 3.3% advance. Meanwhile, selling in Germany's 10-yr bund sent its yield higher by 17 basis points to 0.89% while U.S. Treasuries also retreated with the 10-yr yield rising ten basis points to 2.42%.

Treasuries extended their losses during the early afternoon after Federal Reserve Chair Janet Yellen spoke in Cleveland, reiterating that the Fed still believes it will be appropriate to raise rates later this year. That being said, the Fed Chair said the outlook for the economy and inflation remains uncertain with unanticipated events having the potential to delay or accelerate the first rate hike.

All ten sectors posted gains with eight groups adding more than 1.0%. Most notably, the top-weighted technology sector (+1.6%) held the lead throughout the session while the second-largest group by market cap—financials (+1.2%)—followed not far behind.

The technology sector rallied behind its largest components like Apple (AAPL 123.30, +3.23), Google (GOOGL 556.11, +11.46), and Facebook (FB 87.95, +2.07) while high-beta chipmakers also displayed relative strength with the PHLX Semiconductor Index spiking 1.9%. To be fair, the index ended the week lower by 3.9% after both Advanced Micro Devices (AMD 1.96, -0.02) and QLogic (QLGC 11.48, +0.48) issued cautious guidance.

Elsewhere, the industrial sector (+1.0%) settled a bit behind the broader market, but that masked broad strength among transport stocks. The Dow Jones Transportation Average gained 1.9% to end the week higher by 1.0%. Airlines led today's advance with Alaska Air (ALK 70.55, +4.01) spiking 6.0% in reaction to upbeat traffic flow data.

For the week, four sectors registered gains with countercyclical consumer staples (+1.1%) and utilities (+0.5%) logging respective weekly gains of 2.0% and 1.7%. On the flip side, growth-sensitive energy (+0.6%) and materials (+1.5%) both lost near 1.5% for the week.

Today's participation was roughly in-line with recent totals as 720 million shares changed hands at the NYSE floor.

Monday's data will be limited to the 14:00 ET release of the Treasury Budget for June.

Nasdaq Composite +5.5% YTD

Russell 2000 +3.9% YTD

S&P 500 +0.9% YTD

Dow Jones Industrial Average -0.4% YTD