Day Traders Diary

7/13/15

The stock market began the trading week on an upbeat note with the S&P 500 (+1.1%) registering the bulk of its 23-point gain shortly after the opening bell. The benchmark index padded that advance during the final hour, settling just below its 50-day moving average (2,100).

Equity indices spiked at the start after lengthy weekend negotiations between Greek representatives and eurozone officials produced a framework for the third rescue package for Greece. The agreement, which includes EUR25 billion in bank recapitalization funds, was cheered by global equity markets, but it is worth noting that the full bailout will be discussed once the country's government passes a series of reforms on Wednesday. The far-reaching concessions will require Greece to streamline value-added taxes, broaden its tax base to increase revenue, curtail pension costs, and privatize public assets worth as much as 50 billion euros.

Global risk assets surged in reaction to the developments while outflows from the Treasury market weighed on the 10-yr note, sending its yield higher by three basis points to 2.43% after testing the 2.47% level in the early morning.

Interestingly, the euro only saw a brief spike that was followed by heavy selling with the single currency sliding 1.4% against the dollar to 1.1000. As a result, the Dollar Index (96.82, +0.80) climbed 0.8%, erasing last week's decline.

All ten sectors ended in the green with five groups adding 1.0% or more. Heavily-weighted sectors fueled today's advance with the technology sector (+1.6%) holding the lead throughout the session. Large-cap sector components like Apple (AAPL 125.66, +2.38), Facebook (FB 90.10, +2.15), Google (GOOGL 571.73, +15.62), and Microsoft (MSFT 45.53, +0.92) spiked between 1.9% and 2.8% while Seagate (STX 46.28, +0.33) advanced 0.7% despite lowering its Q4 revenue and gross margin guidance. As for chipmakers, the high-beta group struggled to keep pace with the sector, but the PHLX Semiconductor Index still added 0.8%.

Elsewhere among influential groups, the consumer discretionary sector (+1.5%) finished right behind technology while financials (+1.1%) and industrials (+1.0%) ended near the broader market. Also of note, the health care sector (+0.8%) finished behind the broader market, which masked relative strength in biotechnology, evidenced by a 1.6% gain in iShares Nasdaq Biotechnology ETF (IBB 378.89, +6.09).

Similar to health care, telecom services (+0.6%) and utilities (unch) underperformed while the consumer staples sector (+1.0%) settled just behind the S&P 500. Thanks to today's gain, the staples sector is now up 4.2% for the month, trading well ahead of the remaining nine groups.

Today's participation was comparable to recent totals as more than 730 million shares changed hands at the NYSE floor. 

Economic data was limited to the Treasury Budget statement for June, which showed a surplus of $51.80 billion while the Briefing.com consensus expected a surplus of $51.00 billion. The Treasury data are not seasonally adjusted, so the June surplus cannot be compared to the $82.40 billion deficit recorded in May.

Tomorrow, June Retail Sales (Briefing.com consensus 0.3%) and Import/Export Prices for June will be released at 8:30 ET while the Business Inventories report for May will be reported at 10:00 ET (consensus 0.2%).

Nasdaq Composite +7.1% YTD

Russell 2000 +5.1% YTD

S&P 500 +2.0% YTD

Dow Jones Industrial Average +0.9% YTD