Day Traders Diary

1/6/17

Equity indices closed Monday's session mixed. The Nasdaq (+0.2%) posted a modest gain, while the S&P 500 finished lower by 0.4%.

With news and economic data limited, the benchmark index remained within reach of its flat line throughout the session, only to dip a bit further in the final stretch.

There was a batch of earnings reports this morning, with Acuity Brands (AYI 202.51, -34.85), Commercial Metals (CMC 20.81, -1.79), and Global Payments (GPN 79.79, +5.34) all reporting before the opening bell. Acuity Brands and Commercial Metals lost 14.7% and 7.9%, respectively, after missing top and bottom line estimates while Global Payments added 7.2% after beating expectations and issuing positive guidance. The fourth-quarter earnings season will heat up this week with several banks set to report their results on Friday.

Eight out of eleven sectors finished the trading day in negative territory, with the energy sector (-1.5%) closing at the bottom of the leaderboard. The sector faced an uphill climb from the start as crude oil opened the day deep in negative territory amid growing concerns that the OPEC, non-OPEC supply cap has been implemented at slower-than-expected pace. In addition, reports indicated that the recent growth in U.S. production was also ruffling some investors' feathers. The commodity closed its trading day 3.8% lower at $51.94/bbl. Financials (-0.8%), industrials (-0.7%), and consumer discretionary (-0.1%) rounded out the cyclical underachievers.

On the countercyclical side, four out of five spaces finished in the red. Utilities (-1.3%) retreated the furthest, as telecom services (-1.1%), consumer staples (-0.7%), and real estate (-0.6%) performed slightly better. Heath care (+0.4%) was the lone non-cyclical representative in green territory, bucking the trend on the back of a solid showing from the biotechnology industry. The iShares Biotechnology ETF (IBB 284.07, +3.72) increased 1.4% on big gains from names like Amgen (AMGN 158.84, +2.06), Biogen (BIIB 299.02, +4.02), and Vertex Pharmaceuticals (VRTX 82.86, +3.47). The three names posted gains between 1.3% and 4.3%.

The top-weighted technology sector (+0.3%) also finished in positive territory after a solid showing from the sector's heaviest component, Apple (AAPL 118.99, +1.08), which closed higher by 0.9%. Chipmakers also aided the tech sector, evidenced by the 1.1% gain in the PHLX Semiconductor Index. The materials (unch) and consumer discretionary (-0.1%) sectors rounded out the day's outperformers.

U.S. Treasuries ended the day near their session high that was achieved early in the morning. The 10-yr yield closed five basis points lower at 2.37%. Also of note, the U.S. Dollar Index (101.95, -0.22) fell 0.2% while gold increased by 0.8%. The precious metal finished at $1,183.00/ozt.

Reviewing today's economic data:

Consumer Credit report for November

Showed an increase of $24.5 billion while the Briefing.com consensus expected growth of $18.0 billion.

The prior month's credit growth was revised to $16.2 billion from $16.0 billion.

The key takeaway from the report is that consumer credit -- both revolving and nonrevolving -- continues to expand, providing fuel for a potential increase in economic activity.

Tomorrow's economic data will include November Job Openings (JOLTS) and November Wholesale Inventories (Briefing.com consensus 0.9%). Both reports will be released at 10:00 am E.T.

Russell 2000 UNCH YTD

Dow Jones Industrial Average +0.6% YTD

S&P 500 +1.3% YTD

Nasdaq Composite +2.8% YTD