Day Traders Diary

9/24/18

• Stocks opened the week on a mostly lower note after the U.S. implemented tariffs on $200 billion worth of Chinese goods at midnight on Sunday. The S&P 500 lost 0.4% in Monday's trade, and the Dow lost 0.7%, breaking its two-session streak of record closes. The tech-heavy Nasdaq outperformed though, adding 0.1%. In retaliation, Beijing responded to the U.S. tariffs by imposing duties on $60 billion worth of American goods and by canceling mid-level trade talks with the U.S. that had been scheduled for this week. With no trade talks on radar, there doesn't appear to be much hope for near-term reconciliation between the world's two largest economies. The financials (-1.1%), industrials (-1.3%), and materials (-1.4%) sectors -- all of which are cyclical, meaning their performance highly depends on the economic outlook -- finished in the bottom half of Monday's sector standings. The consumer staples (-1.5%) and real estate (-1.9%) sectors also underperformed. Meanwhile, the newly added communication services sector, which absorbed the former telecom services group and some other high-profile names like Facebook (FB 165.41, +2.48, +1.5%), Alphabet (GOOG 1173.37, +7.28, +0.6%), and Netflix (NFLX 369.61, +8.42, +2.3%), finished its first day of trading flat. On the upside, the top-weighted information technology sector outperformed, adding 0.3%, and the oil-sensitive energy group rallied 1.5%. Energy shares were helped by a jump in the price of crude oil after a weekend meeting between OPEC and non-OPEC producers ended without an agreement to increase output in order to counter falling supply from Iran due to U.S. sanctions. WTI crude finished up 1.8% at $72.08/bbl -- its highest close since mid-July. On the corporate front, Comcast (CMCSA 35.63, -2.27) tumbled 6.0%, hitting a four-week low, after outbidding 21st Century Fox (FOXA 45.01, +0.68) for Sky with a $40 billion bid, ending a two-year battle for the European broadcaster. 21st Century Fox climbed 1.5%. Separately, Pandora (P 8.98, -0.11) lost 1.2% after agreeing to be acquired by Sirius XM Radio (SIRI 6.26, -0.72) for approximately $10.14/share. SIRI dropped 10.3%. In politics, Deputy Attorney General Rod Rosenstein reportedly discussed his resignation with Chief of Staff John Kelly last week following reports that Mr. Rosenstein suggested to colleagues last year that he would secretly record conversations with President Trump. Mr. Rosenstein will be meeting with the president on Thursday to discuss his future. Separately, President Trump said he believes a second summit with North Korean leader Kim Jong-un will be announced soon. Investors did not receive any notable economic data on Monday, but will receive several reports on Tuesday, including the FHFA Housing Price Index for July, the S&P Case-Shiller Home Price Index for July, and the Conference Board's Consumer Confidence Index for September. Nasdaq Composite +15.8% YTD Russell 2000 +11.1% YTD S&P 500 +9.2% YTD Dow Jones Industrial Average +7.5% YTD

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