Day Traders Diary

12/22/15

The stock market registered its second consecutive advance on Tuesday with the S&P 500 climbing 0.9%. The benchmark index returned above its 100-day moving average (2,026) while the Nasdaq Composite (+0.7%) underperformed throughout the day.

Overall, the Tuesday affair was very quiet, which was evidenced by light trading volume as fewer than 850 million shares changed hands at the NYSE floor.

Equity indices ranged near their flat lines through the first two hours of the session, climbing to new highs during the afternoon. All ten sectors ended the day with gains, paced by the energy sector (+1.2%), which settled among the leaders.

To little surprise, the rally in the energy sector was underpinned by crude oil as the commodity advanced 1.0% to $36.14/bbl. Similarly, another commodity-linked sector—materials (+1.2%)—spent the day near the top of the leaderboard while most other cyclical groups posted slimmer gains.

For instance, the industrial sector (+1.2%) received support from transport stocks, evidenced by a 1.5% gain in the Dow Jones Transportation Average. The bellwether complex extended this week's advance to 2.2%, but the group remains down 7.1% in December versus a 2.0% decline in the S&P 500.

Elsewhere, the top-weighted technology sector (+0.7%) spent the day a bit behind the broader market due to daylong weakness in the shares of Apple (AAPL 107.23, -0.10). The largest stock by market cap continued its recent underperformance, shedding 0.1%, after Cowen lowered its AAPL price target to $130.

Staying in the tech sector, high-beta chipmakers also failed to keep pace with the market, largely due to SunEdison (SUNE 5.31, -1.43) as the stock plunged after activist investor David Tepper, who holds a stake in the company, demanded to inspect SUNE's financial records. Shares of SUNE sank 21.2% while the PHLLX Semiconductor Index added 0.2%.

Today's advance in equities was accompanied by steady selling in the bond market. The 10-yr note slumped to lows into the close, pushing its yield up to 2.24% (+5 bps).

Economic data included Q3 GDP, Existing Home Sales, and FHFA Housing Price Index:

The third estimate for third quarter GDP was revised slightly lower to 2.0% from the second estimate of 2.1%, which was in-line with the Briefing.com consensus estimate

The GDP Deflator was unchanged at 1.3%, also as expected

The slight downward revision stemmed largely from revisions to the change in private inventories, net exports, and gross private domestic investment while real final sales growth, which excludes the change in inventories, was unchanged at 2.7%

Existing home sales declined 10.5% to a seasonally adjusted annual rate of 4.76 million, which was well below the Briefing.com consensus estimate of 5.30 million and followed a downward revision to sales in October from 5.36 million to 5.32 million

This was the first time since January-February 2014 that existing home sales have declined in consecutive months. Furthermore, the decline in November left existing home sales down 3.8% from a year ago, which is the first year-over-year decrease since September 2014

The October FHFA Housing Price Index rose 0.5% to follow last month's revised reading of +0.7% (from +0.8%)

Tomorrow, the weekly MBA Mortgage Index will be released at 7:00 ET while November Personal Income (Briefing.com consensus 0.3%)/Spending data (Briefing.com consensus 0.3%) and November Durable Orders (Briefing.com consensus -0.7%) will be reported at 8:30 ET. The November New Home Sales report (Briefing.com consensus 505K) and the final reading of the December Michigan Sentiment Index (Briefing.com consensus 92.0) will both be released at 10:00 ET.

Nasdaq Composite +5.6% YTD

S&P 500 -1.0% YTD

Dow Jones Industrial Average -2.3% YTD

Russell 2000 -5.2% YTD