Day Traders Diary

3/28/19

The Dow Jones Industrial Average gained 0.4%, the Nasdaq Composite gained 0.3%, and the Russell 2000 gained 0.9%.

The S&P 500 materials (+1.0%), financials (+0.8%), and industrial (+0.8%) sectors outperformed the broader market. Conversely, the utilities (-1.3%) and communication services (-0.5%) sectors were the lone groups to finish with losses.

A U.S. trade delegation, which included USTR Robert Lighthizer and Treasury Secretary Steven Mnuchin, arrived in Beijing for a two-day meeting on Thursday. Reuters reported Wednesday evening that Chinese negotiators made "unprecedented" proposals on a range of issues including forced technology transfers. Despite the progress, the market continues to wait for a substantive, final trade deal.

In earnings news, lululemon athletica (LULU 167.54, +20.74, +14.1%), PVH Corp (PVH 127.26, +16.37, +14.8%), and Accenture (ACN 175.12, +8.65, +5.2%) all beat top and bottom-line estimates and provided upbeat guidance, sending shares notably higher.

In M&A news, WABCO Holdings (WBC 131.48, -14.53, -10.0%) agreed to be acquired by ZF Friedrichshafen for $136.50/share, or over $7 billion, in cash.

Nielsen (NLSN 23.66, -2.97) was another story stock, dropping 11.2%, after The New York Post reported that Blackstone pulled out of the bidding process to acquire the company.

U.S. Treasuries edged lower, pushing yields higher. The 2-yr yield and the 10-yr yield increased two basis points each to 2.23% and 2.39%, respectively. The U.S. Dollar Index rose 0.5% to 97.24. WTI crude decreased 0.3% to $59.27/bbl.

Reviewing Thursday's economic data, which included the weekly Initial and Continuing Claims report, the third estimate of Q4 GDP, and Pending Home Sales for February:

• Initial claims for the week ending March 23 decreased by 5,000 to 211,000 (Briefing.com consensus 220,000) from the revised prior week level of 216,000 (from 221,000) while continuing claims for the week ending March 16 increased by 13,000 to 1.756 mln from the revised prior week level of 1.743 mln (from 1.750 mln).
  • The key takeaway from the report is that initial claims have approached the lower end of range that has been in effect over the past year while continuing claims hover near the middle of their range from the past year.
• The third estimate for Q4 GDP showed a downward revision to 2.2% from 2.6% (Briefing.com consensus 2.5%) and a downward revision to the GDP Price Deflator to 1.7% from 1.8% (Briefing.com consensus 1.8%).
  • The key takeaway from the report is that even with the downward revision, real GDP increased 3.0% from the fourth quarter of 2017 to the fourth quarter of 2018, down slightly from the previous estimate of 3.1%. Measured from the 2017 annual level to the 2018 annual level, real GDP increased 2.9%.
• Pending Home Sales decreased 0.1% in February (Briefing.com consensus 0.5%). Today's reading follows a revised increase of 4.3% in January (from 4.6%).

Looking ahead, investors will receive several economic reports on Friday, which will include Personal Spending for January, the Core PCE Price Index for January, Personal Income for February, New Home Sales for February, and the revised University of Michigan Index of Consumer Sentiment for March. 

• Nasdaq Composite +15.6% YTD
• Russell 2000 +13.8% YTD
• S&P 500 +12.3% YTD
• Dow Jones Industrial Average +10.3% YTD

• • Headlines provided Briefing.com