Day Traders Diary

2/12/19

The S&P 500 gained 1.3% on Tuesday, as optimism that U.S. lawmakers reached a tentative agreement to prevent another government shutdown helped fuel broad-based buying interest. Investors also remained hopeful for progress on the ongoing U.S-China trade talks.

The Dow Jones Industrial Average gained 1.5%, the Nasdaq Composite gained 1.5%, and the Russell 2000 gained 1.3%.

President Trump expressed some reservations about the agreement, which included funding that was short of the $5.7 billion requested by the White House, but believed that another shutdown was not likely. As for trade, President Trump said there are no plans for a meeting with President Xi at the end of March, but confirmed that the deadline could be extended if real progress is evident.

Tuesday's gains helped the S&P 500 close above its 200-day moving average (2743) for the first time since Dec. 3.

10 of the 11 S&P 500 sectors finished with gains with materials (+2.3%), consumer discretionary (+1.7%), industrials (+1.6%), and financials (+1.6%) leading the advance. Conversely, the real estate (-0.7%) sector was the lone group to finish with a loss.

While gains were largely broad-based, some company-specific news helped Brighthouse Financial (BHF 40.68, +4.98, +14.0%) and Coty (COTY 10.87, +1.21, +12.5%) lead the S&P 500 in gains.

Brighthouse Financial rose after the company more than doubled its total year-over-year revenue. Coty rose after JAB Holding Company sent out a tender offer to acquire up to 150 million additional shares of the beauty company for $11.65/share in cash.

On the other hand, Facebook (FB 165.04, -0.75) was a notable laggard, losing 0.5% after California Governor Gavin Newsom proposed a "digital dividend" that would require technology companies to share profits with consumers in exchange for collecting information, according to Bloomberg.

Molson Coors Brewery (TAP 59.19, -6.17) fell 9.4% after the company's audit committee invalidated the consolidated financial statements for 2016 and 2017. The committee cited material weakness in its prior financial reporting of deferred tax liabilities for its conclusion.

U.S. Treasuries ended the day on a lower note, pushing yields higher across the curve. The 2-yr yield and the 10-yr yield increased two basis points each to 2.50% and 2.68%, respectively. The U.S. Dollar Index pulled back 0.4% to 96.72, recording its first loss of the month. WTI crude rose 1.4% to $53.12/bbl.

Reviewing Tuesday's economic data, which included the NFIB Small Business Optimism Index for January and the JOLTS - Job Openings report for December:

• The NFIB Small Business Optimism Index for January decreased to 101.2 from the prior reading of 104.4 in December.
• The December Job Openings and Labor Turnover Survey showed that job openings increased to 7.335 million from a revised 7.166 million (from 6.888 million) in November.

Looking ahead, investors will receive the Consumer Price Index for January, the weekly MBA Mortgage Applications Index, and the Treasury Budget for December on Wednesday.

• Russell 2000 +14.1% YTD
• Nasdaq Composite +11.8% YTD
• S&P 500 +9.5% YTD
• Dow Jones Industrial Average +9.0% YTD

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• Headlines provided by Briefing.com