Day Traders Diary

1/25/19

The S&P 500 gained 0.9% on Friday as positive-sounding headlines, which included the temporary reopening of the government, helped lift investor sentiment. Friday's gains helped pare the benchmark index's weekly losses to 0.2%.

The Dow Jones Industrial Average (+0.8%) and the Nasdaq Composite (+1.3%) squeezed out weekly gains of 0.1% apiece, and the Russell 2000 (+1.3%) returned to its unchanged mark.

Nine of the 11 S&P 500 sectors closed the day in positive territory with the cyclical materials (+1.9%), information technology (+1.5%), and industrial (+1.3%) groups setting the pace. Conversely, the utilities (-1.3%) and consumer staples (-0.2%) sectors were the lone groups to finish in the red.

Stocks jumped at the open on initial speculation that a deal to reopen the government was imminent; hope the Federal Reserve may be getting close to the end of its balance sheet normalization effort; and a contention from Treasury Secretary Mnuchin that the U.S. is making progress with China trade talks.

Notably, news hit in the afternoon session that an agreement had been struck to provide funding, minus border security funding, to re-open the government through February 15.  Negotiations over border security funding will take place in the interim, and a failure to reach a compromise on that front could result in another shutdown or a declaration of a national emergency in order to secure funding. 

The market's response to the news was relatively muted, partially because it had already priced in some type of an agreement, and partially because it realizes it is only a temporary solution.

The Philadelphia Semiconductor Index was a notable area of strength on Friday, rising 2.2% after its best session in nearly 10 years the day before. A disappointing earnings report from Intel (INTC 47.04, -2.72, -5.5%) did not dampen buying interest in the group, but it did hurt the stock.

In other earnings news, Western Digital (WDC 43.16, +3.02) rose 7.5% with an upbeat outlook for the second half of 2019 offsetting weaker-than-expected quarterly earnings and guidance. In addition, Starbucks (SBUX 67.09, +2.35, +3.6%) impressed investors with its fiscal first quarter report and full-year outlook.

U.S. Treasuries ended the day on a lower note, pushing the 2-yr yield and the 10-yr yield up four basis points each to 2.60% and 2.75%, respectively. The U.S. Dollar Index fell 0.9% to 95.75, pulled back by a rebound in the euro. WTI crude rose 0.9% to $53.62/bbl.

Investors did not receive any notable economic data on Friday and will not receive any economic data on Monday.

• Russell 2000 +10.0% YTD
• Nasdaq Composite +8.0% YTD
• S&P 500 +6.3% YTD
• Dow Jones Industrial Average +6.0% YTD

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  • Headlines provided by Briefing.com