Day Traders Diary

10/19/15

The stock market began the trading week on a quiet note with the major averages spending the Monday session inside narrow ranges. The S&P 500 settled just above its flat line after climbing off its opening low while the Nasdaq Composite (+0.4%) outperformed.

In some ways, the range-bound action was a bit of a surprise considering investors received China's Q3 GDP report over the weekend. The growth report proved to be a mixed bag as GDP beat estimates (+6.9%; consensus 6.8%), but dipped below the official target growth rate of 7.0% year-over-year.

Asian markets took the data in stride with China's Shanghai Composite and Hong Kong's Hang Seng both ending flat; however, the slowdown in the year-over-year growth rate weighed on commodities, sending crude oil lower by 3.0% to $45.90/bbl.

The sell-off in crude oil futures pressured the energy sector (-2.0%) while a major sector component—Halliburton (HAL 37.36, -0.45)—lost 1.2% in reaction to better than expected earnings on below-consensus revenue.

Similar to energy, the materials sector (-0.8%) ended well behind the broader market while the remaining sectors fared better. The top-weighted technology sector (+0.3%) eked out a modest gain while another influential group—financials (unch)—ended just below its flat line despite a 4.8% dive in the shares of Morgan Stanley (MS 32.32, -1.63) brought on by a disappointing earnings report.

Elsewhere among cyclical sectors, the discretionary space (+0.5%) outperformed throughout the day thanks to strength in retail names. Also in the discretionary sector, Weight Watchers (WTW 13.92, +7.13) soared 105.0% after announcing Oprah Winfrey will purchase newly-issued shares representing 10.0% of all shares outstanding.

Moving to the countercyclical side, the health care sector (+0.3%) settled among the leaders after enduring a volatile session that mirrored the price action in biotechnology. The iShares Nasdaq Biotechnology ETF (IBB 315.94, +1.62) was up more than 2.0% at the start, but surrendered that gain after presidential candidate Hillary Clinton sent a letter to the Food and Drug Administration and the Federal Trade Commission, requesting an inquiry into drug pricing. The biotech ETF returned into the green by the closing bell, ending higher by 0.5%.

Similar to stocks, Treasuries maintained narrow ranges throughout the day with the 10-yr yield ending flat at 2.03%.

Today's participation was a bit below average as just over 800 million shares changed hands at the NYSE floor.

Economic data was limited to the NAHB Housing Market Index for October, which rose to 64 from a downwardly revised 61 (from 62) while the Briefing.com consensus expected the reading to come in at 62. Tomorrow's economic data will be limited to September Housing Starts (Briefing.com consensus 1.15 million) and Building Permits (consensus 1.17 million) with both data points set to cross at 8:30 ET.

Nasdaq Composite +3.6% YTD

S&P 500 -1.2% YTD

Dow Jones Industrial Average -3.3% YTD

Russell 2000 -3.4% YTD