Day Traders Diary

12/21/15

The stock market began the trading week a higher note thanks to a final-hour rally that lifted the market back to its opening high. The S&P 500 added 0.8% while the Nasdaq Composite (+0.9%) outperformed slightly.

Overnight, Asian markets had a mixed showing with China's Shanghai Composite (+1.8%) outpacing other regional indices thanks to stimulus hopes. Meanwhile, European indices flashed solid intraday gains, but they slid into the close with Spain's IBEX diving 3.6% due to political uncertainty stemming from general elections that took place over the weekend. Mariano Rajoy's Partido Popular came out on top, receiving 123 votes, but forming a lasting coalition government may be a challenge considering the runner-up Socialist party has ruled out forming a joint government with PP. Spain's 10-yr note sold off in response, sending its yield higher by nine basis points to 1.79%.

Once the attention shifted to the U.S., equity indices spiked out of the gate, hitting their session highs during the opening hour of the trading day. All ten sectors took part in the rally, but the market ran into some resistance that coincided with renewed selling in crude oil, which ended the day lower by 1.3% at $35.79/bbl. Furthermore, the intraday selling in oil may have rekindled concerns about the high-yield debt space. To that point, the iShares iBoxx $ High Yield Corporate ETF (HYG 79.28, -0.25) opened in the green, but slumped to lows, dragging the broader market with it.

The late morning pullback returned the market into the bottom half of its trading range where action was confined until the final hour rally placed the S&P 500 just below its early high. The energy sector (+0.1%) ended the day just above its flat line while the remaining cyclical groups posted stronger gains.

The top-weighted technology sector (+1.1%) spent the day among the leaders thanks to a strong showing from high-beta microchip names. Avago Technologies (AVGO 145.80, +5.60) spiked 4.0% after RBC Capital Markets upgraded the stock while the broader PHLX Semiconductor Index rallied 1.9%.

Similar to technology, industrials (+0.8%) and financials (+0.9%) had a strong showing while the consumer discretionary sector (+0.4%) underperformed. Dow component Disney (DIS 106.59, -1.13) lost 1.1% despite a strong opening weekend for the latest installment of the Star Wars franchise while Chipotle Mexican Grill (CMG 522.01, -19.07) surrendered 3.5%, dropping to a new low for the year amid reports the Center for Disease Control is investigating new E. coli cases at company restaurants.

Treasuries showed losses overnight, but climbed into the green during morning action. The 10-yr note eked out a modest gain, pressuring its yield to 2.20% (-1 bp).

Today's participation was in line with recent averages as roughly 900 million shares changed hands at the NYSE floor.

Investors did not receive any economic data today, but tomorrow, the third estimate of Q3 GDP will be released at 8:30 ET (Briefing.com consensus 2.0%) while October FHFA Housing Price Index and November Existing Home Sales (Briefing.com consensus 5.30 million) will be reported at 9:00 ET and 10:00 ET, respectively.

Nasdaq Composite +4.9% YTD

S&P 500 -1.8% YTD

Dow Jones Industrial Average -3.2% YTD

Russell 2000 -6.1% YTD