Day Traders Diary

8/14/17

The weekend came and went without any major developments on the North Korean front, allowing investors to breath a sigh of relief and launch another 'buy-the-dip' campaign on Monday. The major averages finished solidly higher across the board with the tech-heavy Nasdaq (+1.3%) leading the charge. The S&P 500 and the Dow settled with gains of 1.0% and 0.6%, respectively. 

Following a mixed performance from Asian equity markets and amid an upbeat performance from the major European bourses, Wall Street opened Monday's session comfortably higher and extended its gain throughout the first hour and a half of trading. From there, the major averages trended sideways, slipped a bit moving into the final stretch, and then rallied back near their session highs before the day's end.

For perspective, at last Thursday's closing bell, the benchmark S&P 500 sat about 43 points, or 1.7%, below the record-high close (2,480.9) it posted on Monday, August 7. Today's advance brings the benchmark index within 15 points, or 0.6%, of its record mark. For the month, the S&P 500 currently shows a loss of 0.2%.

The lightly-weighted real estate sector (+1.7%) finished at the top of Monday's leaderboard, but it was the top-weighted technology (+1.6%) and financials (+1.4%) sectors that drove the upbeat performance. The two groups, which represent around 35.0% of the broader market combined, benefited from broad strength with just about all of their components finishing in positive territory.

In total, ten of the eleven sectors--financials (+1.4%), consumer discretionary (+0.7%), industrials (+1.0%), materials (+0.9%), technology (+1.6%), health care (+0.7%), consumer staples (+0.5%), utilities (+0.6%), telecom services (+1.2%), and real estate (+1.7%)--finished in the green. The energy sector (-0.3%) was the lone laggard.

Crude oil weighed on the energy group, dropping 2.5% to $47.59/bbl, which marks a three-week low for the commodity. The Energy Information Administration (EIA) said that it expects oil production to increase by 117,000 barrels a day--to a total of 6.149 million barrels a day--in September. The EIA report has shown an increase in shale-oil production every month this year.

In the bond market, U.S. Treasuries began the week on a lower note, giving back a portion of their gains from the end of last week. The benchmark 10-yr yield climbed three basis points to 2.22%. 

It's also worth pointing out that the CBOE Volatility Index (VIX 12.37, -3.14), which surged to a four-month high last Thursday, dropped 20.1% on Monday.

Investors did not receive any economic data on Monday. However, on Tuesday, investors will receive a number of economic reports, including July Retail Sales (Briefing.com consensus 0.3%), July Import/Export Prices, and August Empire Manufacturing (Briefing.com consensus 13) at 8:30 ET, and both June Business Inventories (Briefing.com consensus 0.4%) and the August NAHB Housing Market Index (Briefing.com consensus 65) at 10:00 ET.

• Nasdaq Composite +17.8% YTD
• Dow Jones Industrial Average +11.3% YTD
• S&P 500 +10.1% YTD
• Russell 2000 +2.7% YTD