Day Traders Diary

12/31/15

The stock market ended its last session of the year under broad-based selling pressure, which pushed the S&P 500 (-0.9%) into negative territory for the year (-0.7%). This represented the first year-to-date loss for the benchmark index since 2008. The benchmark index outperformed the Nasdaq (-1.2%) today as the technology sector paced today's retreat. On the year though, the Nasdaq outperformed with a year-to-date return of 5.7%. Unsurprisingly, it was a quiet end to the year with fewer than 740 million shares changing hands at the NYSE floor.

The major averages slipped at the beginning of their day as pressure in oil helped to dampen futures trading. Oil prices fell through pre-market trading, but they eventually rebounded to their overnight levels. Oil rallied during the afternoon before settling near the $37.13/bbl price level with a 1.5% gain.

In sectors, energy (+0.3%), industrials (-0.7%), materials (-0.8%), and financials (-0.9%)  lead, while technology (-1.4%), utilities (-1.1%), and consumer staples (-1.1%) rounded out the leaderboard. It is interesting to note, that only two cyclical sectors posted gains in 2015. The top-weighted technology sector gained 4.3% while the consumer discretionary space (-1.0%) rallied 8.4%. On the other side, energy ended the year down 23.6% while materials surrendered 10.0%. Both sectors responded to year-long weakness in commodities, which was highlighted by a 32.2% plunge in crude oil.

Looking at the energy space, Dow component Chevron (CVX 89.96, -0.13) struggled to keep pace with the broader sector while pipeline companies outperformed. Kinder Morgan (KMI 14.92, +0.38) advanced 2.6% following the developments in oil. To be fair though, pipeline companies also benefited from the strong performance of natural gas, which spiked 6.0% to $2.34/MMbtu following a bullish inventory reading.

In the heavily-weighted technology sector, large-cap constituents Apple (AAPL 105.26, -2.06), Alphabet (GOOGL 778.01, -12.29), and Facebook (FB 104.66, -1.56) saw increased pressure as the three underperformed the broader sector with performances 1.9%, 1.6%, and 1.5% respectively. For the year Apple lost 4.6% while Alphabet soared 46.6% and Facebook surged 33.8%.

Treasuries ended their abbreviated session on their highs with the 10-yr yield slipping three basis points to 2.27%.

The stock market will be closed tomorrow in observation of New Years Day.

It was a relatively quiet day on the economic front with data being limited to Chicago PMI and Initial and Continuing Claims:

The Chicago Purchasing Managers Index fell to 42.9 (Briefing.com consensus 50.1) from November's 48.7.

Initial claims increased by 20,000 in the week ending December 26 to 287,000 (Briefing.com consensus 270,000).

No special factors influenced this jump which pushed the four week average up 4,500 to 272,500.

Continuing claims for the week ending December 19th increased by 3,000 to 2.198 million (Briefing.com consensus 2.213 million)

This moved the four week average higher by 9,250 to 2.220 million.

Monday's data will be limited to the 10:00 ET release of November Construction spending report (Briefing.com consensus 0.8%) and the December ISM Index (Briefing.com consensus 49.0).

Nasdaq  +5.7% YTD

S&P 500 -0.7% YTD

Dow Jones -2.2% YTD

Russell 2000 -5.9% YTD