Day Traders Diary

11/24/15

The stock market ended the Tuesday session on a flat note, overcoming an opening retreat that was fueled by a military incident, which is likely to invite geopolitical implications going forward. The S&P 500 added 0.1% while the Nasdaq Composite (unch) underperformed.

Early this morning, it was reported that the Turkish military shot down a Russian fighter jet, which allegedly violated Turkish airspace on the country's border with Syria. This marked the first time that a NATO member downed a Russian plane since the 1950s and Russian military officials said that both pilots were killed by Syrian opposition fighters after ejecting from the plane. The Russian defense ministry called the incident a "hostile act" while President Vladimir Putin has terminated all Russian military cooperation with Turkey. Mr. Putin denied the incursion into Turkey, saying the action represented "backstabbing by accomplices of terrorists" and that it "goes beyond [the] fight against terror."

The news was met with a spike in Treasuries and the 10-yr note then notched a new high shortly after the release of the second estimate of Q3 GDP (+2.1%; Briefing.com consensus +2.0%); however, the 10-yr note spent the rest of the day in a slow retreat from morning highs to end with a small gain that lowered the benchmark yield one basis point to 2.24%.

Meanwhile, stocks opened in the red and fell to new lows after a disappointing November Consumer Confidence report crossed the wires (90.4; consensus 99.6); however, a turnaround ensued shortly thereafter with the rally uninterrupted by late-morning news of another terrorist attack in Tunisia, which prompted the country to invoke a State of Emergency. The market climbed into the green during early afternoon action, but briefly slipped back to unchanged in a knee-jerk reaction to reports of a hostage situation in Northern France, which was later said to have no connection to the Paris attacks. The S&P 500 climbed to a new high during the final hour, but slipped back to its flat line into the close.

Nine sectors started the day in negative territory, but only four groups--financials (-0.3%), consumer discretionary (-0.2%), industrials (-0.2%), and utilities (-0.1%)--remained in the red when the closing bell rang. On the upside, the energy sector (+2.1%) spent the day well ahead of its peers thanks to strength in crude oil. To that point, WTI crude surged 2.7% to $42.91/bbl after marking a session high at $43.45/bbl.

Elsewhere, the materials sector (+0.8%) also settled well ahead of the broader market while other pockets of strength included health care (+0.3%), materials (+0.8%), and consumer staples (+0.3%). In the staples sector, Campbell Soup (CPB 51.33, +1.54) surged 3.1% after the company reported better than expected earnings and boosted its earnings guidance; however, the sales outlook was lowered due to currency headwinds.

Over on the cyclical side, the consumer discretionary sector (-0.2%) could not keep pace with the market as restaurant and media names weighed while apparel and luxury retailers fared well after two components reported their results. Tiffany & Co (TIF 79.32, +2.77) erased an opening loss to settle higher by 3.6% after reporting a one-cent beat on below-consensus revenue combined with lowered earnings guidance. Meanwhile, Signet Jewelers (SIG 134.89 -5.76) lost 4.1% after missing estimates and guiding Q4 earnings towards the low end of expectations.

Today's session invited above-average participation as more than 893 million shares changed hands at the NYSE floor.

Economic data released today included second estimate of Q3 GDP, Consumer Confidence, and Case-Shiller 20-City Index:

The second estimate for third quarter GDP showed an upward revision to 2.1% from the advance estimate of 1.5% while the Briefing.com consensus expected a reading of 2.0%

The upward revision was the result of the decrease in private inventory investment being smaller than previously estimated. Accordingly, the change in private inventories subtracted only 0.59 percentage points from third quarter GDP growth versus 1.44 percentage points as indicated in the advance estimate

There was a downward revision, though, to personal consumption expenditures, which increased 3.0% versus a previously estimated 3.2%

The Conference Board's Consumer Confidence Index checked in at 90.4 for November, which was down sharply from an upwardly revised 99.1 reading for October (from 97.6) and well below the Briefing.com consensus estimate, which stood at 99.6

The downturn was driven by a drop in both the Present Situation Index (from 114.6 to 108.1) and the Expectations Index (from 88.7 to 78.6)

The September Case-Shiller 20-City Index rose 5.5% (Briefing.com consensus +5.2%) to follow the previous increase of 5.1%

Tomorrow will be very busy on the economic front starting with the 7:00 ET release of the weekly MBA Mortgage Index. At 8:30 ET, investors will receive weekly Initial Claims (Briefing.com consensus 272,000), October Personal Income/Spending Data, and October Durable Orders (consensus 1.5%). The September FHFA Housing Price Index will be released at 9:00 ET while the final reading of the Michigan Sentiment Index for November (consensus 93.1) and October New Home Sales (consensus 504,000) will both be reported at 10:00 ET.

Nasdaq Composite +7.7% YTD

S&P 500 +1.5% YTD

Dow Jones Industrial Average -0.1% YTD

Russell 2000 -1.2% YTD