Day Traders Diary

7/12/17

 The stock market is trading solidly higher this afternoon following the release of Fed Chair Janet Yellen's prepared remarks, which investors have seemingly interpreted as being relatively dovish. The major averages are currently hovering in the upper half of their trading ranges with the benchmark S&P 500 sporting a gain of 0.7%.

Ms. Yellen has been taking questions from the House Financial Services Committee since delivering her semi-annual monetary policy testimony at 10:00 ET, but her prepared remarks were delivered to the public beforehand, crossing the wires at 8:30 ET, and immediately had an impact on U.S. markets.

The Treasury market moved sharply higher, reclaiming a good portion its two-week decline, as Ms. Yellen's remarks seemingly left the door open for a softer stance on rate hikes and thereby threw a wrench in the market's anticipation of a shift towards less-accomodative monetary policy from central banks around the globe. The benchmark 10-yr yield is down four basis points at 2.32%.

In the currency market, the U.S. Dollar Index (95.47, -0.02) has been up and down following the release of Ms. Yellen's prepared comments, but has since returned to its unchanged mark, which is where it sat ahead of the release. Meanwhile, equity futures extended their modest early-morning gains immediately following the release, setting the stage for a higher open on Wall Street.

The stock market did indeed open the midweek session in the green with the tech-heavy Nasdaq (+0.9%) showing relative strength. The S&P 500's technology sector (+1.0%) is currently outperforming the benchmark index with nearly all tech components advancing above their unchanged marks. However, Apple (AAPL 145.24, -0.29), the sector's top component by market cap, has struggled thus far amid speculation that shipments of the company's iPhone 8 might be delayed due to bugs that have yet to be fixed.

In total, ten of the eleven sectors are trading in positive territory, but the heavily-weighted financial sector (unch) has kept the broader market's gain in check as the lone laggard. The group has been weak throughout today's session amid the tumble in interest rates.

Elsewhere, the Department of Energy reported that U.S. crude inventories declined by 7.6 million barrels for the week ended July 7 while the consensus expected a draw of just 2.9 million barrels. However, on the downside, the report also revealed that U.S. production increased by 59,000 barrels per day.

Crude oil was trading around 2.5% above its flat line going into the release, but then gave back a sizable portion of that gain in the aftermath. WTI crude currently trades higher by 2.0% at $45.94/bbl.

On the data front, the weekly MBA Mortgage Applications Index declined 7.4% to follow last week's 1.4% increase. Investors will also receive the Fed's Beige Book for July at 14:00 ET.