Day Traders Diary



The S&P 500 gained 0.5% on this quadruple-witching expiration Friday, supported by reported progress in U.S.-China trade talks and the outperformance of semiconductor stocks. Friday's advance capped an impressive 2.9% weekly gain in the benchmark index and established a new closing high for 2019.

The Dow Jones Industrial Average (+0.5%), the Nasdaq Composite (+0.8%), and the Russell 2000 (+0.3%) extended their weekly gains to 1.6%, 3.8%, and 2.1%, respectively.

The S&P 500 information technology sector (+1.2%) was the session's outright leader, followed by the consumer discretionary sector (+0.7%). Conversely, the real estate (-0.4%), industrials (-0.3%), and energy (-0.1%) sectors were the lone groups to finish with losses.

Stocks began the session on a higher note, helped by a Chinese report that the U.S. and China have made "concrete progress" in talks about the text of a trade agreement. Separately, talk that China is considering using monetary tools to further help the economy, and Japan explicitly saying it will keep interest rates low for an extended period, aided investor sentiment. The Bank of Japan left its interest key policy rate unchanged at -0.1%, as expected.

The semiconductor space rallied around Broadcom (AVGO 290.29, +22.09, +8.2%) providing a better-than-feared earnings report and calling for the industry to hit a bottom in the second quarter. The Philadelphia Semiconductor Index jumped 2.9% Friday and 5.6% this week.  Many of its components helped drive the outperformance of the tech sector and the Nasdaq.

Shares of Boeing (BA 378.99, +5.69, +1.5%) found some reprieve after AFP News Agency tweeted Boeing is going to roll out a software upgrade for its 737 MAX in ten days. Boeing responded, telling Reuters that its timeline for the software update has not changed and is expected to be rolled out in the coming weeks.

The initial news helped lift the stock into positive territory after it was down as much as 1.9% in the morning. Its turnaround helped propel the broader market, and Dow, into higher ground.

On the other hand, Facebook (FB 165.98, -4.19, -2.5%), Adobe Systems (ADBE 257.09, -10.60, -4.0%), and Tesla (TSLA 275.43, -14.53, -5.0%) were some notable laggards Friday.

Facebook announced the departure of its chief product officer; Adobe underwhelmed investors with its earnings report; and Tesla underwhelmed many analysts with its Model Y, which it unveiled Thursday evening. 

U.S. Treasuries closed the session on a higher note, pushing yields lower across the curve. The 2-yr yield declined one basis point to 2.44%, and the 10-yr yield declined four basis points to 2.59%. The U.S. Dollar Index declined 0.2% to 96.60. WTI crude lost 0.3% to $58.39/bbl.

Reviewing Friday's batch of economic data:

  • Industrial production increased just 0.1% in February ( consensus +0.4%) on the heels of an upwardly revised 0.4% decline (from -0.6%) in January. The capacity utilization rate dipped to 78.2% ( consensus 78.5%) from an upwardly revised 78.3% (from 78.2%) in January.
    • The key takeaway from the report is that manufacturing output remained weak, declining 0.4%, which was the second consecutive monthly decline.
  • The preliminary March reading for the University of Michigan Index of Consumer Sentiment checked in at 97.8 ( consensus 94.9), up from the final reading of 93.8 for February.
    • The key takeaway from the report is that real income expectations, which account for inflation, increased in households across lower, middle, and upper incomes. That favorable outlook is supportive for consumer spending activity.
  • The January Job Openings and Labor Turnover Survey showed that job openings increased to 7.581 million from a revised 7.479 million (from 7.355 million) in December.
  • The Empire State Manufacturing Survey for March fell to 3.7 ( consensus 10.0) from the prior month's unrevised reading of 8.8.

Looking ahead, investors will receive the NAHB Housing Market Index for March on Monday. 

  • Nasdaq Composite +15.9% YTD
  • Russell 2000 +15.2% YTD
  • S&P 500 +12.6% YTD
  • Dow Jones Industrial Average +10.8% YTD

All comments contained herein are for informational purposes only, and should not be considered as a solicitation to buy or sell any security. The firm does not guarantee the accuracy or completeness of the information or make any warranties regarding results from it's usage.