Day Traders Diary

6/5/18

Stocks ended Tuesday on slightly higher note, with the S&P 500 adding 0.1%. The Nasdaq (+0.4%) and the Russell 2000 (+0.7%) outperformed, finishing at new all-time highs for the second day in a row, but the Dow lagged, closing lower by 0.1%. The major averages kept within pretty narrow ranges on Tuesday due to a lack of market-moving news.

The lightly-weighted materials sector (+0.8%) was the top-performing S&P 500 group, followed by consumer discretionary (+0.6%), information technology (+0.4%), and telecom services (+0.5%). On the flip side, financials (-0.4%) finished with energy (-0.3%), consumer staples (-0.5%), utilities (-0.7%), and real estate (-0.5%) at the bottom of the sector standings. Financials declined in tandem with Treasury yields, which finished lower across the curve. The yield on the benchmark 10-yr Treasury note dropped two basis points to 2.92%.

In corporate news, shares of Starbucks (SBUX 55.68, -1.39) dropped 2.4% after Howard Schultz announced on Monday evening that he's stepping down from his role as executive chairman. Twitter (TWTR 39.80, +1.92) shares, meanwhile, spiked 5.1% after news that the company will be added to the S&P 500 on June 7, and shares of Mylan (MYL 39.98, +1.48) jumped 3.8% after the company received FDA approval for a drug similar to Amgen's (AMGN 181.73, -3.71) Neulasta, which is used to decrease the chance of inflection for chemotherapy patients.

Several retailers made outsized moves on Tuesday, sending the SPDR S&P Retail ETF (XRT 48.49, +0.85) up 1.8% to its best level since late January. The retail rally was helped by Monday comments from Evercore ISI Research, which suggested that fears about Amazon's (AMZN 1696.35, +31.08) ever-growing footprint are overblown. However, Amazon shares also had a solid performance on Tuesday, climbing 1.9% to finish at a new record high.

Overseas, Italian Prime Minister Giuseppe Conte delivered his inaugural address, calling for a universal basic income, a fairer tax system, and the EU to review sanctions against Russia. Italy's major stock index, the MIB, underperformed other European indices, losing 1.2%, and the yield on the Italian 10-yr bond rose 20 basis points to 2.75%.

Reviewing Tuesday's economic data, which was limited to the ISM Services Index for May and the Job Openings and Labor Turnover Survey for April:

• The ISM Services Index for May ticked up to 58.6 (Briefing.com consensus 58.0) from an unrevised reading of 56.8 in April.
  • The key takeaway from the report is that it matched an uptick in the ISM Manufacturing Index for May. The uptick in both will help substantiate the belief that second quarter GDP growth is poised to pick up noticeably from the first quarter.
• The April Job Openings and Labor Turnover Survey showed that job openings increased to 6.698 million from a revised 6.633 million (from 6.550 million) in March.

Looking ahead, investors will receive on Wednesday the April Trade Balance (Briefing.com consensus -$48.8 billion), the revised readings for first quarter Productivity (Briefing.com consensus 0.6%) and Unit Labor Costs (Briefing.com consensus 2.8%), and the weekly MBA Mortgage Applications Index.

• Nasdaq Composite +10.6% YTD
• Russell 2000 +8.4% YTD
• S&P 500 +2.8% YTD
• Dow Jones Industrial Average +0.3% YTD

Headlines provided by Briefing.com