Day Traders Diary

11/21/16

The stock market began an abbreviated week on a higher note as the three major averages notched new all-time closing highs. The Nasdaq Composite (+0.9%) finished ahead of the S&P 500 (+0.8%) and the Dow Jones Industrial Average (+0.5%). The Russell 2000 (+0.4%) also carved out a new all-time high, extending its November gain to 10.8%.

The major averages jumped at the start of the session as crude oil extended its recent winning streak. The energy component rallied 4.1% ($48.27/bbl; +$1.89) after several oil producers made upbeat comments regarding the elusive OPEC supply cap agreement. Iranian Oil Minister Bijan Namdar Zanganeh stated that the oil cartel will likely reach a consensus regarding cuts at its official meeting on November 30. Separately, Iraqi Oil Minister Jabbar al-Luaibi indicated that three new proposals will be brought to the group during technical meetings taking place today and tomorrow.

Softening in the US Dollar Index (100.85, -0.36, -0.36%) boosted dollar-denominated commodities. The currency index moved off a fresh 14-year high overnight as the euro and the pound gained ground against the greenback. The single currency ticked up 0.2% (1.0629) against the buck while the pound/dollar pair finished higher by 1.2% (1.2494). The euro remains down 3.2% against the dollar in November.

A pullback in market rates helped keep a lid on recent rate angst while a positive bias in global markets also underpinned today's advance.

The major averages carved out all-time highs in the final hour of action with ten sectors finishing with gains. The energy (+2.2%), utilities (+1.1%), and technology (+1.1%) sectors ended in the lead while real estate (-0.2%), financials (+0.3%) and health care (+0.3%) rounded out the board.

The influential technology sector (+1.1%) paced today's advance as large cap names continued their recent rebound. Facebook (FB 121.77, +4.75) finished higher by 4.1% after the company reported a $6.0 billion share buyback. Top-weighted Apple (AAPL 111.75, +1.69) ended higher by 1.5%. The broader sector has gained 0.5% so far in November, which compares to an advance of 3.4% in the benchmark index.

In the consumer staples space (+0.7%), Tyson Foods (TSN 57.60, -9.76) tumbled 14.5% in reaction to weaker-than-expected quarterly results and disappointing full-year 2017 earnings guidance. However, the company did increase its quarterly dividend to $0.225 per share from $0.15 per share. Peer Hormel Foods (HRL 34.94, -0.64, -1.8%) moved lower in sympathy with the name. Hormel will release its quarterly results tomorrow morning.

Retailers continued to have a mixed showing as Gap (GPS 24.99, -0.62, -2.4%) extended its post-earnings losing streak. Meanwhile, Best Buy (BBY 45.65, +0.86, +1.9%) continued to outperform after reporting upbeat results and guidance last Friday. Separately, influential Amazon (AMZN 780.00, +19.84) and Netflix (NFLX 117.96, +2.75) finished higher by 2.5% apiece.

The financial sector (+0.3%) finished on a flat note as flattening in the yield curve weighed on banking names. The yield on the 2-yr note finished down one basis point to 1.06% while the yield on the benchmark 10-yr note slipped five basis points to 2.30%. The yield spread between the 2-yr and 10-yr note narrowed to 124 basis points from 128 basis points last Friday.

Today's trading volume was below the recent average of one billion as fewer than 842 million shares changed hands at the NYSE floor.

There was no economic data of note released today.

Tomorrow's economic data will be limited to the Existing Home Sales Report for October (Briefing.com consensus 5.40 million), which will be released at 10:00 ET.