Day Traders Diary

7/11/16

The major averages began the week on a higher note as the S&P 500 (+0.3%) settled above its previous all-time closing high at 2130.82. The broader market continued its recent rally as participants remained upbeat following a headline beat in Friday's Employment Situation Report for June. Additionally, positive developments overseas, a downturn in safe havens, and strong sector leadership from the heavyweight technology (+0.6%), financial (+0.6%), industrial (+0.6%), and consumer discretionary (+0.6%) sectors lifted the averages. The Nasdaq Composite (+0.6%) finished ahead of the Dow Jones Industrial Average (+0.4%) and the S&P 500 (+0.3%).

Today's session began on a higher note as investors eyed a continued rebound in overseas bourses. Global equity markets climbed overnight, boosted by a positive reading of the U.S. Employment Situation Report for June (287K; Briefing.com consensus 175K) and political developments out of Japan. The June employment report sparked risk appetite, indicating a rebound in labor markets without spurring concerns of a sooner-than-expected move from the Fed. In Japan, Prime Minister Shinzo Abe's LDP won a supermajority, paving the way to an easier approval process of potential future stimulus measures.

Equity indices climbed at the start of the session as the benchmark index surpassed its prior all-time intraday high within the first half-hour of trade. The S&P 500 briefly pulled back, finding support near the 2134 price level. The market climbed through the session, buoyed by leadership from heavily-weighted technology (+0.6%), financials (+0.6%), industrials (+0.6%), and consumer discretionary (+0.6%). The broader market finished off its best level of the day as eight sectors ended above their flat lines. In front of the pack, technology (+0.6%), financials (+0.6%), and industrials (+0.6%) outperformed. On the flipside, countercyclical health care (-0.2%), telecom services (-0.1%), and utilities (-0.1%) ended with the only losses.

The high-beta chipmakers demonstrated relative strength, evidenced by the 1.1% gain in the PHLX Semiconductor Index. In the index, NVIDIA (NVDA 52.02, +1.17) and Skyworks (SWKS 64.64, +1.73) outperformed, gaining 2.3% and 2.8%, respectively. In the broader technology sector (+0.6%), Alphabet (GOOG 715.09, +9.46) climbed 1.3% while Twitter (TWTR 17.71, -0.37) slipped 2.1%. Twitter struggled after SunTrust downgraded the stock from "Buy" to "Neutral."

In the economically-sensitive financial sector (+0.6%), money center banks outperformed ahead of their respective earnings reports. JPMorgan Chase (JPM 62.27, +0.44) is scheduled to report Thursday morning. Elsewhere, Capital One (COF 66.26, +1.55) led credit service names. The broader sector sports the slimmest monthly gain (month-to-date: +0.8%) and remains the only sector in negative territory for the year (year-to-date: -3.4%).

The Dow Jones Transportation Average (+0.4%) finished the day ahead of the broader market as airline names outperformed. In the group, Delta Air Lines (DAL 38.12, +0.75) and United Continental (UAL 42.41, +0.93) gained 2.1% apiece. Separately, C.H. Robinson (CHRW 71.86, -2.57) rounded out the index after being downgraded to "Sell" at UBS. In the broader industrial sector (+0.6%), Dow component Boeing (BA 132.04, +1.95) led after announcing a number of aircraft sales and raising its 20-year outlook. The company estimates that airplane demand will total 39,260 in the next two decades.

The U.S. Dollar Index (96.59, +0.29) ended modestly higher as the greenback gained against commodity currencies and the yen. The dollar/Canadian dollar pair finished higher by 0.6% (1.3126) amid a downturn in crude oil, which finished its day lower by 1.3% ($44.77/bbl; -$0.59). Separately, the dollar gained 2.2% against the safe-haven yen (102.82).

The Treasury complex settled at its low as equities extended their advance. The yield on the 10-yr note finished higher by seven basis points at 1.43%.

Today's participation was below the recent average as fewer than 789 million shares changed hands on the NYSE floor.

Investors did not receive any economic data today and Tuesday's data will be limited to Wholesale Inventories (Briefing.com consensus 0.2%) for May, which will be released at 10:00 ET. 

Russell 2000 +4.8% YTD

Dow Jones +4.6% YTD

S&P 500 +4.6% YTD

Nasdaq Composite -0.4% YTD