Day Traders Diary

7/18/19

The major averages finished modestly higher on dovish Fed commentary bolstering expectations for a rate cut at the end of the month. The Dow Jones Industrial Average finished just 3 points higher while the S&P 500 rose 10 points and the Nasdaq rose 22 points.

New York Fed President Williams (FOMC voter) catalyzed a slow-moving market after he said that when interest rates are low and there are signs of economic slowing, it is better to lower rates and keep them low rather than keep the Fed's powder dry. The dovish commentary increased the probability for a 50-basis points rate cut at the July 30-31 meeting.

The consumer staples sector led the rally today up 0.8%. The financials, Utilities and information technology rose 0.8%. The communication services sector declined 0.9% as shares of Netflix fell 10.3% to a six month low after disappointing investors with a miss on net subscriber additions.

Notable stock standouts today include Union Pacific and Taiwan Semi after both provided upbeat earnings results and commentary, helping fuel gains in the Dow Jones Transportation Average up 1.3% and Philadelphia Semiconductor Index up 1.5%. The transportation average did drop 3.6% yesterday.

Other stocks moving on earnings news included Philip Morris International and IBM up over 6%. Morgan Stanley and Honeywell also climbed on better-than-expected earnings.

Separately, oil prices fell for the sixth straight session on Thursday. WTI crude settled 2.8% lower at $55.19/bbl but finished on a high note after President Trump said the U.S. Navy defensively shot down an Iranian drone near the Strait of Hormuz.