Day Traders Diary

3/30/17

 The financial sector (+1.2%) nudged the broader market into positive territory on Thursday as the bulls couldn't resist bank stocks in light of last week's dip. The three major U.S. averages settled with gains of 0.3% apiece while the small-cap Russell 2000 (+0.8%) outperformed.

In a day short on headlines, investors kept an eye on crude oil as the energy component moved back above the psychologically important $50.00 mark. WTI crude finished 1.7% higher at $50.30/bbl after Kuwait voiced support to extend OPEC/non-OPEC production cuts beyond June. In addition, Kuwaiti oil minister Essam al-Marzouq said that several other nations are in favor of the extension. However, despite crude oil's positive performance, the energy sector (+0.5%) struggled to stay ahead of the broader market.

In addition to the financials and energy sectors, the industrial group (+0.5%) also outperformed the broader market as its components settled higher across the board. Most of the remaining cyclical sectors closed the day with modest gains while the countercyclical groups finished mixed.

The rate-sensitive utilities sector (-0.7%) settled at the bottom of the leaderboard as selling pressure within the Treasury market left yields in positive territory. However, the pressure wasn't applied equally across the yield curve with the front end holding up a bit better than the back end; the 10-yr yield (2.41%) finished four basis points higher while the 2-yr yield (1.28%) added only one basis point.

Elsewhere on the defensive side of the market, the consumer staples (-0.2%) and health care (unch) groups finished with the utilities sector in the red while the telecom services space (+0.4%) closed in the green. Biotechnology names weighed on the health care sector, evidenced by the 0.4% downtick in the iShares Nasdaq Biotechnology ETF (IBB 293.39, -1.03).

On the corporate front, lululemon athletica (LULU 50.76, -15.54) plunged 23.4% after reporting worse than expected earnings and issuing disappointing guidance. The negative influence seeped into the broader athletic apparel market, leaving Nike (NKE 56.04, -0.64) and Under Armour (UAA 20.09, -0.53) with respective losses of 1.1% and 2.6%.

On the data front, investors received the third estimate of fourth quarter GDP and Initial Claims:

The third reading of fourth quarter GDP pointed to an expansion of 2.1%, while the Briefing.com consensus expected a reading of 2.0%. The third estimate of fourth quarter GDP Deflator came in at 2.0%, which is in line with the Briefing.com consensus.

The key takeaway from the report is that despite the upward revision, growth trends remains subdued amid soft business spending.

The latest weekly initial jobless claims count totaled 258,000 while the Briefing.com consensus expected a reading of 245,000. Today's tally was below the unrevised prior week count of 261,000. As for continuing claims, they rose to 2.052 million from the revised count of 1.987 million (from 2.000 million).

The key takeaway from this report is that while claims have increased notably from this year's low of 223,000, they are still at encouraging levels, having held below 300,000 for 108 weeks in a row.

Tomorrow, investors will receive a slew of economic reports, including February Personal Income (Briefing.com consensus 0.4%), Personal Spending (Briefing.com consensus 0.2%), and PCE Price Index (Briefing.com consensus 0.1%) at 8:30 ET, March Chicago PMI (Briefing.com consensus 55.8) at 9:45 ET, and the final University of Michigan Consumer Sentiment reading (Briefing.com consensus 97.6) at 10:00 ET.

Nasdaq Composite +9.9% YTD

S&P 500 +5.8% YTD

Dow Jones Industrial Average +4.9% YTD

Russell 2000 +1.9% YTD