Day Traders Diary

11/25/15

The stock market ended Wednesday on a flat note with trading volume running well below average as some market participants got an early jump on the Thanksgiving holiday, which will keep capital markets in the U.S. closed on Thursday. The S&P 500 settled just below its flat line while the Nasdaq Composite (+0.3%) outperformed.

Investors received a boatload of economic data this morning, but there was little response in the market as stocks opened flat and inched higher to establish narrow trading ranges that held throughout the day. For instance, the S&P 500 spent the session in a seven-point range with seven sectors offsetting gains in three groups that outperformed throughout the day.

Heavily-weighted health care (+0.5%) and consumer discretionary (+0.5%) seized the lead in the early going and held their ground into the close. The health care sector received support from biotechnology, evidenced by a 1.1% spike in iShares Nasdaq Biotechnology ETF (IBB 338.85, +3.58).

Biotechnology was not the only high-beta group that displayed relative strength as chipmakers also outperformed the broader technology sector (-0.3%) with the PHLX Semiconductor Index adding 0.1% after showing a larger gain intraday. As for the tech sector, the top-weighted group was weighed down by several large names. Apple (AAPL 118.03, -0.85) lost 0.7%, but more notably, HP (HPQ 12.64, -2.00) sank 13.7% after missing estimates and guiding Q1 earnings below analyst expectations.

Similar to technology, industrials (unch) lagged during the trading day, but the market came back to the economically-sensitive sector in afternoon action. The industrial sector ended flat even though Deere (DE 80.00, +3.66) soared 4.8% after beating earnings expectations and issuing upside Q1 net sales guidance.

Also of note, the consumer discretionary sector received broad support with apparel retailers getting a boost after Guess? (GES 20.86, +1.32) beat bottom-line estimates. Elsewhere in the sector, homebuilders rallied throughout the day even though the October New Home Sales report came in below estimates (495,000; Briefing.com consensus 504,000). The iShares Dow Jones US Home Construction ETF (ITB 28.84, +0.27) surged 1.0%.

Similar to stocks, Treasuries spent the day inside narrow ranges, ending with slim gains that pressured the 10-yr yield to 2.23% (-1 bp).

To little surprise, trading volume was well below average with 661 million shares changing hands at the NYSE floor.

Economic data included Initial Claims, Personal Income/Spending, Durable Orders, Michigan Sentiment, New Home Sales, and FHFA Housing Price Index:

Initial claims for the week ending November 21 were 260,000, down 12,000 from the prior week's revised level of 272,000 (from 271,000) while the Briefing.com consensus estimate expected no change at 272,000

There were no special factors influencing the weekly initial claims reading, which has been bounded between 250,000 and 300,000 since July 2014

Continuing claims increased to 2.207 million from a downwardly revised reading of 2.173 million (from 2.175 million)

October personal income rose 0.4%, which is what the Briefing.com consensus expected

Personal spending increased 0.1% while the consensus expected a reading of 0.3%

Core PCE prices were flat while the consensus expected an increase of 0.2%

The October Durable Goods Orders report showed a 3.0% gain and a 0.5% increase in durable orders excluding transportation while Briefing.com consensus estimates for those measures were 1.5% and 0.5%, respectively

The report was driven primarily by transportation orders, which featured an 81% increase in nondefense aircraft and parts orders that followed on the heels of declines in both August and September

The final reading for the University of Michigan Consumer Sentiment Index for November was lowered to 91.3 from a preliminary reading of 93.1 (consensus 93.1)

The Current Economic Conditions Index was 104.3 versus 102.3 in October while the Index of Consumer Expectations rose to 82.9 from 82.1 in October

New home sales in October rose to a seasonally adjusted annual rate of 495,000 (consensus 504,000) from a downwardly revised September reading of 447,000 (from 468,000)

The FHFA Housing Price Index for September rose 0.8%, which followed an increase of 0.3% in August

Tomorrow, bond and equity markets will be closed for Thanksgiving while Friday's session will end at 13:00 ET.

Nasdaq Composite +8.0% YTD

S&P 500 +1.5% YTD

Dow Jones Industrial Average -0.1% YTD

Russell 2000 -0.4% YTD