Day Traders Diary

6/19/17

 Wall Street kicked off the week on a positive note as the S&P 500 (+0.8%) bucked its recent sideways trend and advanced to a new record close. The Dow (+0.7%) also settled at a fresh all-time high while the tech-heavy Nasdaq (+1.4%) exhibited relative strength as technology and biotechnology stocks outperformed. The three major averages finished Monday's session at their best marks of the day.

The top-weighted technology sector (+1.7%) rebounded from back-to-back weekly declines on Monday, underpinning the broader market from start to finish. The sector's top component by market cap--Apple (AAPL 146.34, +4.07)--was one of the group's best-performing components, jumping 2.9%, after the company's target price was raised to $180 from $171 at Maxim Group. Chipmakers also put together a noteworthy performance, pushing the PHLX Semiconductor Index higher by 1.9%.

Likewise, the health care sector (+1.1%) finished comfortably ahead of the benchmark index amid broad strength. Biotech names were among the sector's strongest components on Monday, advancing the iShares Nasdaq Biotechnology ETF (IBB 299.79, +7.06) higher by 2.4%, with Biogen (BIIB 260.54, +8.80) leading the charge. BIIB jumped 3.5% after the company was upgraded to 'Neutral' from 'Sell' at UBS.

Out of the remaining advancers--financials (+1.0%), consumer discretionary (+0.8%), industrials (+0.6%), materials (+0.8%), consumer staples (+0.5%), and real estate (+0.1%)--the financial group's positive performance is the most noteworthy given the sector's important role in driving economic activity. The sector picked up its bullish two-week run right where it left off, extending its month-to-date advance to 5.8%.

It's worth pointing out that Monday's top-performing sectors--technology, financials, and health care--are also the largest sectors by weight, comprising nearly half of the broader market combined. When combined with the five remaining advancers, sectors accounting for around 85.0% of the broader market closed Monday in positive territory.

On the downside, the energy sector (-0.7%) settled solidly lower as crude oil tumbled another 1.1%, extending its four-session slide to 4.3%. The commodity settled at a price of $44.46/bbl, which marks its worst level since mid-November. The lightly-weighted utilities (-0.4%) and telecom services (-0.2%) groups also closed Monday in the red.

In the bond market, U.S. Treasuries settled lower across the curve with the benchmark 10-yr yield climbing four basis points to 2.19%. Treasury yields moved higher in early-morning action following some hawkish remarks from New York Fed President William Dudley (FOMC voter).

The thrust of Mr. Dudley's remarks was that inflation will soon resume its upward path towards the Fed's 2.0% target. He also said that the flattening U.S. yield curve has to do with global forces, which is in contradiction with some observers who say that it reflects pessimism about the U.S. economy in an environment of higher policy rates.

Higher Treasury yields drew capital to the United States and buoyed the greenback on Monday, leaving the U.S. Dollar Index (97.24, +0.37) higher by 0.4%.

Investors did not receive any economic data on Monday. The first report of the week--first quarter Current Account Balance (Briefing.com consensus -$123.4 billion)--will cross the wires on Tuesday at 8:30 ET.

Nasdaq Composite +15.9% YTD

S&P 500 +9.6% YTD

Dow Jones Industrial Average +8.9% YTD

Russell 2000 +4.5% YTD