Day Traders Diary

9/25/18

Stocks had a mixed outing on Tuesday, with the major averages settling little changed. The S&P 500 lost 0.1%, the Nasdaq ticked up 0.2%, and the Dow slid 0.3%. The flat performance happened as the Federal Reserve kicked off a two-day policy meeting in D.C., and as President Trump appeared before the UN General Assembly in New York.

The utilities (-1.2%), consumer staples (-0.7%), and materials (-0.5%) sectors led to the downside, while communication services (+0.1%), consumer discretionary (+0.6%), and energy (+0.6%) led to the upside. The energy space is now +2.1% for the week, a performance that's been underpinned by a jump in the price of crude oil -- although crude did pull back amid President Trump's UN speech.

Addressing world leaders, President Trump criticized OPEC on Tuesday, saying the oil cartel is "ripping off the rest of the world" by colluding to limit supply and prop up prices. WTI crude futures were up as much as 0.9%, but fell to their flat line following the president's comment. WTI crude closed +0.2% at $72.28/bbl.

President Trump also criticized Iran, which is currently the target of U.S. economic sanctions, calling its government a "corrupt dictatorship" and saying its leaders "sow chaos, death, and destruction." The president also touched on North Korea, ISIS, and Syria, and reiterated his administration's hard stance on fair trade.

Meanwhile, in Washington, Fed officials began their September meeting, which is all but certain to end on Wednesday afternoon with a rate hike of 25 basis points. The Fed-sensitive yield on the 2-yr Treasury note rose three basis points to 2.83% on Tuesday, while the benchmark 10-yr yield climbed two basis points to 3.10%.

In corporate news, semiconductor giant Intel (INTC 45.91, -1.00) lost 2.1% after being downgraded to 'Underperform' from 'Market Perform' at Raymond James. Chipmakers underperformed as a whole, with the Philadelphia Semiconductor Index dropping 1.7%. Separately, Century Link (CTL 21.05, -1.85) lost 8.1% following the resignation of its CFO, Sunit Patel.

Reviewing Tuesday's economic data, which included the Consumer Confidence Index for September, the FHFA Housing Price Index for July, and the S&P Case-Shiller Home Price Index for July:

• The consumer confidence reading for September increased to 138.4 (Briefing.com consensus 131.0) from the prior month's revised reading of 134.7 (from 133.4).
  • The key takeaway from the report is that the high level of consumer confidence, which was fueled by an uptick in expectations, creates a good backdrop for healthy consumer spending activity that is the driver of GDP growth.
• The FHFA Housing Price Index rose 0.2% in July (Briefing.com consensus +0.2%), and the June increase was revised to 0.3% from 0.2%.
• The Case-Shiller 20-City Index increased 5.9% in July (Briefing.com consensus +6.2%), and the June increase was revised to 6.4% from 6.3%.

Looking ahead, investors will receive the weekly MBA Mortgage Applications Index and August New Home Sales on Wednesday morning. As mentioned above, the Fed's latest policy directive will be released in the afternoon, with the CME FedWatch Tool placing the chances of a rate hike at 100%.

• Nasdaq Composite +16.0% YTD
• Russell 2000 +11.3% YTD
• S&P 500 +9.1% YTD
• Dow Jones Industrial Average +7.2% YTD
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  • Headlines provided by Briefing.com