Day Traders Diary

3/22/17

Wednesday's session was full of ambiguity as investors digested the stock market's Tuesday defeat, which was the steepest decline since October. Stocks ultimately put together a decent performance, but the win didn't feel secure until the closing bell as the financial sector (-0.2%) acted in a seesaw fashion that weighed on the sentiment of the broader market. The S&P 500 (+0.2%) and the Nasdaq (+0.5%) settled with modest gains while the Dow finished flat. Meanwhile, the small-cap Russell 2000 (-0.1%) underperformed.

As they have throughout the post-election rally, most sectors looked to the financial sector for leadership on Wednesday. This resulted in the market moving in tandem with the financial group, but unlike yesterday, the top-weighted technology sector (+0.8%) watered down financials' impact. The tech group propped up the broader market at times with gains from top components like Apple (AAPL 141.42, +1.58), Microsoft (MSFT 65.03, +0.82), and Facebook (FB 139.59, +1.08). Chipmakers also contributed to the cause, pushing the PHLX Semiconductor Index 1.1% higher along the way.

The technology group's bullish sentiment was persistent; at times, the sector was one of few to trade in the green. However, the persistence paid off in the final stretch as all but the financials (-0.2%), telecom services (-1.0%), consumer staples (-0.1%), and energy (-0.1%) sectors joined the technology group in positive territory.

The energy sector very narrowly missed positive territory despite spending much of the trading day with a solid loss. Crude oil influenced the sector's struggle, slipping in response to a bearish EIA inventory report. However, the commodity was able to largely shake off the bigger than expected build (+5.0 million vs +2.8 million consensus) to close 0.5% lower at $48.05/bbl.

In corporate news, Nike (NKE 53.92, -4.09) reported upbeat earnings per share, but investors were disappointed in the company's lackluster worldwide futures orders. Conversely, future guidance is what saved FedEx (FDX 195.92, +4.08) from suffering the consequences of its earnings miss. The companies' respective sectors--consumer discretionary and industrials-- finished with modest gains of 0.1% and 0.4%, respectively.

In the Treasury market, U.S. sovereign debt capitalized on investors' cautious attitude to post its fourth consecutive advance. The benchmark 10-yr yield settled two basis points lower at 2.40%.

On the data front, investors received a handful of economic reports, including February Existing Home Sales, January FHFA Housing Price Index, and the weekly MBA Mortgage Applications Index:

Existing home sales for February decreased 3.7% from January to an annualized rate of 5.48 million units while the Briefing.com consensus expected a reading of 5.54 million.

The key takeaway from the report is that limited supply and weakening affordability conditions are preventing more robust selling activity in the market for existing homes.

The FHFA Housing Price Index for January was unchanged, which followed an unrevised increase of 0.4% in December.

The weekly MBA Mortgage Applications Index decreased 2.7% to follow last week's 3.1% uptick.

On Thursday, investors will receive Initial Claims (Briefing.com consensus 239,000) at 8:30 ET and February Existing Home Sales (Briefing.com consensus 560,000) at 10:00 ET.

Nasdaq Composite +8.2% YTD

S&P 500 +4.9% YTD

Dow Jones Industrial Average +4.6% YTD

Russell 2000 -0.9% YTD