Day Traders Diary

4/27/17

The first half of Thursday's session has been relatively quiet as investors continue to digest the nearly 300 earnings reports they've received since yesterday's close. The S&P 500 and the Dow trade just a tick above their flat lines at midday while the Nasdaq (+0.3%) outperforms.

Crude oil has weighed on the energy sector (-1.6%) throughout today's session, dropping 2.0% to $48.63/bbl. WTI crude eked out a slim gain on Wednesday after the Energy Information Administration reported U.S. crude stocks declined by 3.6 million barrels in the week ending April 21, but gasoline inventories increased by 3.4 million barrels. Today, the commodity is battling technical forces, namely its move below key technical support at its 200-day simple moving average ($49.00/bbl).

Like energy, the telecom services (-0.8%) and financials (-0.8%) sectors show relative weakness. The underperformance of the financial sector is likely due to profit taking after a big run this week. The sector entered today's session with a 3.1% gain for the week. The industrials (-0.2%), materials (-0.4%), and consumer staples (-0.1%) groups also trade in negative territory, but their losses are relatively modest.

On the flip side, the five remaining sectors--consumer discretionary, technology, health care, utilities, and real estate--hold gains between 0.3% and 0.6%. The latest batch of earnings reports has contributed to the bullish sentiment surrounding these sectors. For instance, Comcast (CMCSA 39.86, +1.07), PayPal (PYPL 47.49, +3.08), and Bristol-Myers (BMY 55.03, +1.27) have all added between 2.8% and 6.9% after beating earnings and revenue estimates.

Investors will stick around after today's closing bell as there are some heavy hitters on the earnings docket, including Amazon (AMZN 920.92, +11.63), Microsoft (MSFT 67.60, -0.23), Alphabet (GOOGL 889.37, +0.23), and Intel (INTC 37.09, +0.16), among many others.

U.S. Treasuries trade just above their unchanged marks this afternoon, leaving the benchmark 10-yr yield (2.30%) lower by one basis point. Meanwhile, the U.S. dollar has added 0.3% and 0.2%, respectively, against the euro and Japanese yen after both the Bank of Japan and the European Central Bank decided to leave their monetary policies unchanged.

In addition to earnings reports, investors received a number of economic reports on Thursday, including March Durable Orders, Initial Claims, Advance International Trade in Goods, and March Pending Home Sales:

March durable goods orders rose 0.7%, which is below the 1.2% increase expected by the Briefing.com consensus. The prior month's reading was revised to 2.3% (from 1.7%). Excluding transportation, durable orders decreased 0.2% (Briefing.com consensus 0.4%) to follow the prior month's revised uptick of 0.7% (from 0.4%).

The key takeaway from the report is that business spending is still relatively soft, up 2.1% year-over-year.

The latest weekly initial jobless claims count totaled 257,000 while the Briefing.com consensus expected a reading of 242,000. Today's tally was above the revised prior week count of 243,000 (from 244,000). As for continuing claims, they rose to 1.988 million from the revised count of 1.978 million (from 1.979 million).

The key takeaway from the report is that initial claims continue to run at very low levels consistent with a tight labor market.

The Advance report for International Trade in Goods for March showed a deficit of $64.8 billion (Briefing.com consensus -$65.0 billion), up from a revised deficit of $63.9 billion for February (from -$64.8 billion).

Pending Home Sales for March declined 0.8%. Today's reading follows a revised 5.6% increase in February (from 5.5%).