Day Traders Diary

5/8/17

After settling at fresh record highs on Friday, the S&P 500 (unch) and the Nasdaq (unch) each eked out another record close on Monday. The Dow (unch) also finished just above its unchanged mark while the Russell 2000 (-0.4%) lagged.

The final round of the French presidential election went as expected on Sunday with Emmanuel Macron easily defeating Marine Le Pen. Mr. Macron's victory has been seen as a positive for the European Union, and global equity markets, as it lays to rest Ms. Le Pen's call for a French referendum on EU membership. France's CAC settled lower by 0.9% after hitting its best level in a decade ahead of the vote. Meanwhile, the euro (1.0932) lost 0.6% against the U.S. dollar.

Back in the U.S., seven of eleven sectors opened the week in negative territory. The materials (-0.9%), real estate (-0.5%), and health care (-0.6%) spaces finished solidly lower, but the remaining laggards finished with losses of no more than 0.3%. The health care group, which comprises around 14.0% of the broader market alone, suffered the most notable loss of the day at the hand of the biotechnology industry; the iShares Nasdaq Biotechnology ETF (IBB 289.45, -6.42) declined 2.2%.

At the opposite end of the leaderboard, the energy sector (+0.7%) rallied after morning headlines that the OPEC/non-OPEC production cut agreement, which is currently scheduled to end in June, may be extended for nine months or longer. Saudi Arabia's oil minister went as far as saying that oil producers would do "whatever it takes" to end the global glut. WTI crude ended pit trade 0.4% higher at $46.63/bbl.

Like energy, the top-weighted technology sector (+0.4%) finished ahead of the broader market. Apple (AAPL 153.01, +4.05) climbed to another fresh record high, extending its already impressive 2017 advance by 2.7%. The tech giant currently holds a year-to-date gain of 32.1%. Elsewhere in the tech group, chipmakers underperformed, pushing the PHLX Semiconductor Index lower by 0.4%.

The consumer discretionary (+0.3%) and telecom services (+0.2%) sectors also closed in positive territory. Coach (COH 44.71, +2.05) contributed to the consumer discretionary sector's positive performance, jumping 4.8%, after acquiring Kate Spade (KATE 18.38, +1.41) for $18.50/share, in cash. The purchase price represents a 27.5% premium to KATE's stock price seen in late December when takeover speculation surfaced in the media.

Outside of the stock market, U.S. Treasuries settled lower across the board, signaling a possible uptick in investor sentiment; the benchmark 10-yr yield (2.38%) added three basis points. Even more notably, the CBOE Volatility Index (VIX 9.72, -0.85, -8.0%) settled at one of its lowest levels on record, pointing to increased complacency.

Investors didn't receive any economic data on Monday. Tomorrow, market participants will receive March JOLTS and March Wholesale Inventories (Briefing.com consensus -0.1%). The two reports will both cross the wires at 10:00 ET.

• Nasdaq Composite +13.4% YTD
• S&P 500 +7.2% YTD
• Dow Jones Industrial Average +6.3% YTD
• Russell 2000 +2.5% YTD