Day Traders Diary

12/3/15

 The stock market enjoyed a broad rally on Friday that lifted the S&P 500 (+2.1%) back above its 200-day moving average (2,065). The daylong surge helped the benchmark index turn this week's loss into a slim gain of 0.1%.

Equities charged out of the gate and doubled their gains during afternoon action even though the November Employment Situation report came in ahead of expectations (211,000; Briefing.com consensus 196,000), which is unlikely to get in the way of the Federal Reserve's rate hike plans.

Interestingly, Treasuries stumbled immediately after the release of today's data, but they followed that move with a charge to new session highs. The 10-yr note ended near its best level of the session, pressuring its yield four basis points to 2.27%. Meanwhile, the Dollar Index (98.35, +0.43) climbed 0.4%, erasing a portion of its 2.3% loss from yesterday.

Nine of ten sectors ended the day in the green while energy (-0.6%) spent the day in negative territory with crude oil contributing to the weakness. WTI crude settled near its low, surrendering 2.4% to $40.08/bbl. The energy component fell from the $41.50/bbl level this morning in reaction to reports that OPEC has agreed to increase its daily production target to 31.5 million barrels from 30.0 million; however, the official OPEC statement released in the late morning did not specify a production target. For the week, crude oil lost 3.9% while the energy sector fell 4.6%.

On the flip side, nine groups posted gains with eight adding 1.4% or more. Top-weighted sectors traded comfortably ahead of their peers with technology (+2.5%), financials (+2.7%), and health care (+2.4%) holding the lead into the close. The technology sector rallied thanks to relative strength in large cap names like Apple (AAPL 119.03, +3.83), Alphabet (GOOGL 779.21, +11.01), and Microsoft (MSFT 55.91, +1.71) while high-beta chipmakers underperformed intraday, but the PHLX Semiconductor Index rallied into the close to end the day higher by 1.9%.

Elsewhere among cyclical sectors, the industrial space (+1.5%) spent the day behind the broader market due to relative weakness among transport stocks. The Dow Jones Transportation Average climbed 0.8%, but railroad names struggled with Norfolk Southern (NSC 92.06, -1.05) falling 1.1% after rejecting an unsolicited offer from Canadian Pacific (CP 134.49, -6.42).

Today's daylong charge invited above-average participation with nearly a billion shares changing hands at the NYSE floor.

Economic data included Nonfarm Payrolls and Trade Balance:

Nonfarm payrolls increased by 211,000 (Briefing.com consensus 196,000)

October nonfarm payrolls revised to 298,000 from 271,000

Private sector payrolls increased by 197,000 (Briefing.com consensus 185,000)

October private sector payrolls revised to 304,000 from 268,000

Unemployment rate was 5.0% (Briefing.com consensus 5.0%) versus 5.0% in October

The U6 unemployment rate, which accounts for the total unemployed plus persons marginally attached to the labor force and the underemployed, was 9.9% versus 9.8% in October

Average hourly earnings increased 0.2% (Briefing.com consensus 0.2%) after increasing 0.4% in October

The average workweek was 34.5 hours (Briefing.com consensus 34.5) versus 34.6 hours in October

The labor force participation rate was 62.5% versus 62.4% in October

The US trade deficit widened to $43.90 billion from an upwardly revised $42.50 billion (from -$40.80 billion) in September while the Briefing.com consensus expected the trade deficit to be $43.0 billion

October exports were $184.10 billion, which was $2.70 billion less than September exports. October imports were $228.00 billion, which was $1.30 billion less than September imports

Monday's data will be limited to the 15:00 ET release of the October Consumer Credit report.

Nasdaq Composite +8.6% YTD

S&P 500 +1.6% YTD

Dow Jones Industrial Average +0.1% YTD

Russell 2000 -1.5% YTD