Day Traders Diary

3/18/19

The S&P 500 gained 0.4% on Monday in a session led by the cyclical sectors. Some follow-through buying interest amid a lack of "new" catalysts helped the market advance in front of the Fed's policy meeting this week.

The Dow Jones Industrial Average gained 0.3%, the Nasdaq Composite gained 0.3%, and the Russell 2000 gained 0.7%.

The S&P 500 energy (+1.4%), consumer discretionary (+1.1%), financials (+1.0%), and industrial (+0.9%) sectors outperformed the broader market. Conversely, the communication services (-0.8%), real estate (-0.5%), and utilities (-0.4%) sectors underperformed.

From a macro perspective, the market appeared uninterested by the latest developments pertaining to U.S.-China trade, Brexit, or slowing growth.

Specifically, a trade deal summit between President Trump and President Xi may not happen until June, according to the South China Morning Post; UK Speaker John Bercow warned PM Theresa May that he will not allow a third vote on the Brexit deal unless the proposal is substantially different from the previous versions; and Japan reported its third consecutive year-over-year decline in exports (-1.2%) for February.

Boeing (BA 372.28, -6.71, -1.8%) and Facebook (FB 160.47, -5.51, -3.3%), meanwhile, extended losses from last week on some familiar story lines.

The Wall Street Journal reported the Department of Transportation is investigating the FAA's approval of Boeing's 737-MAX aircraft. Facebook was downgraded to 'Hold' from 'Buy' at Needham, which warned that strategic, regulatory, and brand risks could create a negative network effect for the company.

Monday's session also featured a burst of M&A activity and speculation. Notable deals included Fidelity National Information Services (FIS 108.12, -0.76, -0.7%) acquiring Worldpay (WP 108.51, +9.83, +10.0%) in a $43 billion cash-and-stock deal and Deutsche Bank (DB 9.26, +0.38, +4.3%) confirming it is in merger talks with Commerzbank (CRZBY 8.67, +0.58, +7.2%).

U.S. Treasuries closed near their unchanged marks. The 2-yr yield and the 10-yr yield increased one basis point each to 2.45% and 2.60%, respectively. The U.S. Dollar Index declined 0.1% to 96.49. WTI crude rose 1.4% to $59.30/bbl, supported by news that OPEC canceled its April meeting and will let its current production cuts run until at least June.

In economic data, the NAHB Housing Market Index for March stood at 62 (Briefing.com consensus 63), unchanged from February.

Looking ahead, investors will receive Factory Orders for January on Tuesday.

• Nasdaq Composite +16.3% YTD
• Russell 2000 +16.0% YTD
• S&P 500 +13.0% YTD
• Dow Jones Industrial Average +11.1% YTD

• Headlines provided by Briefing.com