Day Traders Diary

5/9/17

 The Nasdaq (+0.3%) opened Tuesday's session in positive territory and never looked back, settling at a new record high. Meanwhile, the S&P 500 (-0.1%) and the Dow (-0.2%) finished a step below their flat lines as the energy (-0.9%) and financials (-0.5%) sectors weighed.

After closing Monday at its lowest level since December 1993, the CBOE Volatility Index (VIX 10.00, +0.23, +2.4%) finished right at the 10.00 mark on Tuesday. The historically-low level points to a feeling of complacency among investors, which may be a cause for concern in a market where valuations are stretched. 

Following a small relief rally yesterday, crude oil returned to its bearish ways, dropping 1.2% to $45.88/bbl. The slip left the energy sector (-0.9%) with the utilities space (-0.9%) at the bottom of the leaderboard. The utilities group underperformed despite Duke Energy's (DUK 82.11, -0.81) upbeat earnings and in-line revenues. The lightly-weighted telecom services (-0.6%), real estate (-0.4%), and materials (-0.7%) groups also underperformed.

However, the day's most notable laggard may have been the financials sector (-0.5%), which clung to its flat line for the majority of Tuesday's session but was hit by a wave of selling pressure in the last hour of action. Influential bank names like Wells Fargo (WFC 54.68, -0.36) and Goldman Sachs (GS 223.76, -1.27) led the retreat.

Financials' late-afternoon tumble coincided with the broader market slipping to a fresh low in response to a Sky News interview with North Korea's ambassador to the UK Choe Il. The North Korean ambassador said his country will proceed with its 6th nuclear test when it is deemed appropriate by Supreme Leader Kim Jong-un.

The influential technology (+0.2%) and health care (+0.1%) sectors managed to keep their heads above water. The technology space was helped by chipmakers, evidenced by the 1.0% increase in the PHLX Semiconductor Index, but it didn't receive much help from the rest of its components. Similarly, the biotechnology industry provided the health care group with a pocked of strength; the iShares Nasdaq Biotechnology ETF (IBB 292.95, +3.50) climbed 1.2%.

Earnings news was relatively light. However, Marriott's (MAR 102.50, +6.13) better than expected earnings/revenues and upbeat guidance helped the consumer discretionary (+0.5%) sector outpace its peers. The industrial space (+0.2%) also managed to secure a modest gain.

In the bond market, Treasuries settled slightly lower across the board with the benchmark 10-yr yield (2.41%) adding two basis points. Meanwhile, the U.S. Dollar Index (99.47, +0.44) advanced 0.4%.

On the data front, investors received March JOLTS and March Wholesale Inventories:

The March Job Openings and Labor Turnover Survey showed that job openings increased to 5.743 million from a revised 5.682 million (from 5.743 million) in February.

March Wholesale Inventories increased 0.2% (Briefing.com consensus -0.1%). The prior month's reading was revised to 0.3% from 0.4%.

The market doesn't typically pay much attention to this release since the full business inventories report is usually released a short time later.

Tomorrow, investors will receive a batch of economic reports, including the MBA Mortgage Applications Index at 7:00 ET, April Import/Export Prices at 8:30 ET, and the April Treasury Budget at 14:00 ET.

Nasdaq Composite +13.7% YTD

S&P 500 +7.1% YTD

Dow Jones Industrial Average +6.1% YTD

Russell 2000 +2.6% YTD