Day Traders Diary

6/21/16

The stock market ended the Tuesday affair on a flat note as fears regarding a potential Brexit remained in focus. Additional factors contributing towards today's trade included strengthening in the dollar, weakening in oil prices, largely in-line commentary from Fed Chair Janet Yellen, and sector leadership from heavily-weighted technology (+0.7%) and financials (+0.5%). The S&P 500 (+0.3%) ended its day ahead of the Dow Jones Industrial Average (+0.1%) and the Nasdaq Composite (+0.1%).

Equity indices opened on a higher note as investors weighed developments in the latest round of Brexit polling. European indices extended their recent winning streak as an ORB poll for the Telegraph showed that the "Remain" camp maintains a lead over the "Leave" faction. However, a Survation poll showed that the referendum remains highly contested with both camps polling within one percentage point of one another.

The benchmark index slipped from its opening high as investors weighed testimony from Fed Chair Janet Yellen. The central bank head struck a cautious tone, stating that uncertainties persist in her economic outlook. Specifically, Chair Yellen cited that improvements in the labor market have slowed while global developments need to be monitored. The commentary fell largely in-line with market expectations, mirroring similar remarks from last Wednesday's post-FOMC press conference.

The S&P 500 carved out a session high in the final ninety minutes of trade, but failed to clear technical resistance at the 2093 price level. As a result, the benchmark index ended its day off its best level as six sectors finished in the green. The commodity-sensitive energy (+1.1%) sector led telecom services (+0.7%), technology (+0.7%), and financials (+0.5%) while materials (-0.3%), health care (-0.3%), and consumer discretionary (-0.2%) ended in the back of the pack.

The heavily-weighted technology sector (+0.7%) demonstrated relative strength as Dow component Microsoft (MSFT 21.19, +1.12) outperformed. The name jumped 2.2% and finished at the top of the price-weighted index. Elsewhere, Western Digital (WDC 48.87, +1.26) gained 2.7% after announcing that it would collaborate with Hewlett Packard Enterprise (HPE 19.76, +0.38) and VMware (VMW 60.98, +0.21) on the production of rack servers. The PHLX Semiconductor Index (+0.3%) finished behind the broader sector while component Micron (MU 12.75, +0.42) outperformed.

In the financial sector (+0.5%), rate-sensitive real estate investment trusts outperformed as American Tower (AMT 109.44, +2.02) gained 1.9%. Elsewhere, Berkshire Hathaway (BRK.B 143.53, +1.86) advanced 1.3% while Wells Fargo (WFC 47.23, +0.30) and JPMorgan Chase (JPM 62.95, +0.58) led money center bank names.

Biotechnology underperformed in the health care space (-0.3%), evidenced by the 1.5% decline in the iShares Nasdaq Biotechnology ETF (IBB 254.79, -3.74). In the sub-group, Vertex Pharmaceuticals (VRTX 85.27, -1.45) and Celgene (CELG 96.86, -2.43) fell 1.7% and 2.5%, respectively.

The U.S. Dollar Index (94.12, +0.51) gained 0.5% as the pound, euro, and yen lost ground to the greenback. The sterling lost 0.5% against the buck (1.4617) while the euro declined 0.6% (1.1250) against the dollar. Separately, the dollar gained 0.9% against the safe haven yen (104.86). The uptick in the dollar weighed on commodities as WTI crude finished its pit session lower by 0.3% ($49.77/bbl; -$0.15).

The Treasury complex settled lower as the yield on the 10-yr note rose one basis point to 1.70%.

Today's volume was below the recent average as fewer than 831 million shares changed hands on the NYSE floor.

There was no economic data of note released today.

Tomorrow's data will include the weekly MBA Mortgage Index and the FHFA Housing Price Index, which will be released at 7:00 ET and 10:00 ET, respectively. Finally, Existing Home Sales for May (Briefing.com consensus 5.50 million) will cross the wires at 10:00 ET.

Nasdaq Composite -3.3% YTD

Russell 2000 +1.6% YTD

S&P 500 +2.2% YTD

Dow Jones +2.3% YTD