Day Traders Diary

8/30/16

The stock market ended a relatively quiet session on a flat note after the S&P 500 (-0.2%) spent the day inside a meager 12-point trading range. The Dow Jones Industrial Average (-0.3%) settled slightly behind both the Nasdaq Composite (-0.2%) and the benchmark index.

Equity indices began the day on a choppy note as top-weighted Apple (AAPL 106.00, -0.82) demonstrated early weakness. The tech giant underperformed in the wake of a tax ruling from the European Commission, which ordered Apple to pay up to EUR13 billion in back taxes to Ireland after it was found that Apple received an undue tax benefit. However, both the Irish government and Apple have announced that they will appeal the decision.

The major averages backpedaled through the afternoon as strengthening in the U.S. Dollar Index (96.07, +0.49, +0.51%) and a downturn in crude oil weighed on the broader market. Crude oil erased an early gain after reports indicated that Iran's Deputy Minister of Industry stated that the country could increase oil production to four million barrels per day by the end of the year. The reports fueled some uncertainty regarding the potential success of supply limiting measures that could be announced after next month's OPEC meeting. WTI crude ended the day lower by 1.3% ($46.34/bbl; -$0.62).

The S&P 500 (-0.2%) settled off its session low, but was unable to reclaim its 20-day simple moving average (2179.16). Nine sectors ended in negative territory with consumer staples (-0.6%), consumer discretionary (-0.6%), and utilities (-1.0%) rounding out the leaderboard. On the flipside, the heavyweight financial sector (+0.8%) finished with the only gain.

Retail names underperformed in the consumer discretionary sector (-0.6%), evidenced by the 1.6% loss in the SPDR S&P Retail ETF (XRT 44.50, -0.73). The group moved lower following disappointing quarterly results from G-III Apparel (GIII 33.14, -8.63) and Abercrombie & Fitch (ANF 18.29, -4.66). The retailer ETF has declined 1.3% month-to-date, which compares to a loss of 1.2% in the broader sector.

The heavyweight health care sector (-0.4%) ended behind the broader market as pharmaceutical names underperformed. Bristol-Myers (BMY 57.24, -1.52) fell 2.5%, extending its August loss to 23.5%. The name tumbled at the beginning of the month after announcing that its lung-cancer treatment, Opdivo, failed to meet its primary endpoints. Conversely, the iShares Nasdaq Biotechnology ETF (IBB 283.29, -0.58) ended slightly ahead of the broader sector.

In the technology (-0.2%) sector, large cap names underperformed as Alphabet (GOOG 769.09, -3.06), Facebook (FB 125.84, -0.70), and Apple (AAPL 106.00, -0.82) lost between 0.4% and 0.8%. Separately, the PHLX Semiconductor Index (-0.2%) finished in-line with the broader market while Cypress Semiconductor (CY 11.75, +0.62) outperformed. The stock jumped 5.6% on M&A rumors.

The economically-sensitive financial sector (+0.8%) outperformed as Dow components JPMorgan Chase (JPM 67.50, +0.55) and Goldman Sachs (GS 169.37, +3.15) topped the price-weighted index. Conversely, rate-sensitive real estate investment trusts underperformed. Public Storage (PSA 223.77, -1.97) and Realty Income (O 65.44, -0.73) ended lower by 0.9% and 1.1%, respectively.

On the M&A front, Agrium (AGU 95.76, +6.28) and Potash (POT 18.00, +1.95) announced that they have entered into discussions regarding a potential merger. The two posted respective gains of 7.0% and 12.2% while peer Mosaic (MOS 30.45, +2.50) climbed 8.9%.

Treasuries ended on a mixed note with the short end of the curve demonstrating relative strength. The yield on the 30-yr bond ended higher by two basis points (2.23%) while the yield on the 2-yr note settled lower by one basis point (0.79%). The benchmark 10-yr yield rose one basis point to 1.57%.

Today's participation was below the recent average as fewer than 737 million shares changed hands on the NYSE floor.

Today's economic data included the Case-Shiller 20-city Index for June and Consumer Confidence for August:

The Case-Shiller 20-city Home Price Index for June fell to 5.1%, which was in-line with the Briefing.com consensus of 5.1%. This followed the previous month's revised reading of 5.3%, which fell from 5.2%.

The Conference Board's Consumer Confidence Index for August checked in at 101.1 (Briefing.com consensus 97.0) versus a downwardly revised 96.7 (from 97.3) for July.

Consumers are feeling more upbeat than they were the month before about business and employment conditions, as well as personal income prospects.

For more on these economic releases, be sure to visit Briefing.com's Economic Calendar page.

Tomorrow's economic data will include the weekly MBA Mortgage Index and the ADP Employment Change Report for August (Briefing.com consensus 170k), which will be released at 7:00 ET and 8:15 ET, respectively. The day's data will be capped off with Chicago PMI for August (Briefing.com consensus 54.5) and Pending Home Sales for July (Briefing.com consensus 0.7%), crossing the wires at 9:45 ET and 10:00 ET, respectively.

Russell 2000 +9.6% YTD

S&P 500 +6.5% YTD

Dow Jones +5.9% YTD

Nasdaq Composite +4.3% YTD