Day Traders Diary


The stock market ended the Thursday session on a slightly higher note after rebounding off its opening low. The S&P 500 settled just above its flat line while the Nasdaq Composite (+0.3%) outperformed.

Equity indices faced some early weakness after the overnight session saw renewed selling in China that sent the Shanghai Composite lower by 2.2%. Furthermore, equity futures dropped to new lows ahead of the opening bell after the advance reading of Q2 GDP pointed to an expansion of 2.3%, while the consensus expected a reading of 2.5%. Meanwhile, the first quarter reading was revised up to 0.6% from -0.2%.

This morning's GDP report was met with a rally in the Treasury market as the 10-yr note spiked off its low and continued advancing into the afternoon, dropping its yield three basis points to 2.26%.

Six sectors registered gains with the rate-sensitive utilities sector (+0.7%) holding the lead throughout the day. The sector extended its weekly gain to 2.9%, benefiting from today's decline in yields. Elsewhere among countercyclical groups, telecom services (+0.3%) settled in the green while health care (-0.2%) and consumer staples (-0.3%) registered modest losses.

Notably, the staples sector was pressured by Procter & Gamble (PG 77.44, -3.18) as the Dow component retreated 3.9% despite reporting better than expected results. For its part, the health care sector registered a slim loss after 50 sector components reported earnings. AstraZeneca (AZN 33.74, +0.73) climbed 2.2% in reaction to a bottom-line beat while Cigna (CI 143.90, -1.51) lost 1.0% despite beating earnings expectations. As for biotechnology, the high-beta industry group struggled early, but iShares Nasdaq Biotechnology ETF (IBB 378.96, +1.53) ended higher by 0.4%.

Staying on the high-beta theme, chipmakers helped the technology sector (+0.1%) erase its early loss, which also lifted the Nasdaq Composite. NXP Semiconductor (97.87, +6.07) was a standout performer, surging 6.6% in reaction to a bottom-line beat on cautious guidance. Meanwhile, the broader PHLX Semiconductor Index climbed 0.4%.

Similar to technology, consumer discretionary (+0.3%), financials (+0.1%), and materials (+0.5%) posted gains while other growth-sensitive groups ended in the red. The energy sector (-0.6%) finished at the bottom of the leaderboard after several sector components reported earnings. Marathon Petroleum (MPC 53.94, -1.87) gave up 3.4% in reaction to disappointing results while ConocoPhillips (COP 52.07, -0.83) lost 1.6% despite delivering a bottom-line beat. On the upside, Royal Dutch Shell (RDS.A 57.37, +1.97) jumped 3.6% after reporting better than expected results and announcing plans to cut costs.

Today's participation was a bit below totals registered earlier in the week as 770 million shares changed hands at the NYSE floor.

Economic data reported today included Q2 GDP and Initial Claims:
  • GDP increased 2.3% in the advance estimate of for the second quarter, up from an upwardly revised 0.6% (from -0.2%) increase in Q1 2015 while the consensus expected an increase of 2.5% 
    • Real final sales, which exclude inventories, rose 2.4% in the second quarter, up a 0.2% decline in the first quarter 
    • Almost the entire increase in GDP was the result of a 2.9% increase in real personal consumption spending, which contributed 2.0 percentage points to second quarter growth 
    • Goods spending increased 4.8% after increasing 1.1% in the first quarter. That was the strongest increase in goods spending since a 6.7% gain in Q2 2014 
    • Services spending increased 2.1% for a second consecutive quarter 
  • The weekly initial claims level increased to 267,000 from an unrevised 255,000 while the consensus expected an increase to 272,000 
    • The four-week moving average dropped to 275,000 from 278,000, signaling a labor market that is nearing full employment 
    • The continuing claims level increased to 2.262 mln for the week ending July 18 from an upwardly revised 2.216 mln (from 2.207 mln) for the week ending July 11 while the consensus expected a decrease to 2.200 mln 
Tomorrow, the Q2 Employment Cost Index will be released at 8:30 ET ( consensus 0.6%) while the Chicago PMI for July (consensus 50.5) will be reported at 9:45 ET. The day's data will be topped off with the 10:00 ET release of the final reading of the Michigan Sentiment index for July (consensus 94.0).
  • Nasdaq Composite +8.3% YTD 
  • S&P 500 +2.4% YTD 
  • Russell 2000 +2.2% YTD 
  • Dow Jones Industrial Average -0.4% YTD


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