Day Traders Diary

7/23/19

The major averages rallied once again spurred by earnings and news of face-to-face talks between U.S. and Chinese trade negotiators starting next week. The Dow Jones Industrial Average closed up 177 points higher, or 0.7%, at 27,349. The S&P 500 also advanced 0.7% to close back above 3,000 at 3,005. The Nasdaq Composite gained 0.6% to close at 8,251.

Bloomberg News initially reported that in-person talks between China and the U.S. would start Monday as U.S. negotiators headed to China. The U.S. delegation will be led by Trade Representative Robert Lighthizer and will be in China through Wednesday, according to the report.

Shares of Caterpillar and Deere hit their session highs on the report and closed up 2.1% and 1.9%, respectively. On the earnings front, Coca-Cola rose 6% to new highs while United Technologies rose 1.5%. Lockheed Martin closed modestly higher after beating expectations and raising full-year guidance. Intel rose a percent after the Wall Street Journal reported that Apple is in talks to buy the company's modem chip business.

More than 18% of S&P 500 companies have posted quarterly numbers this earnings season. Of those companies more than 78% have reported better-than-expected profits, according to FactSet data. Those companies have also seen their earnings grow by an aggregate of 3.6%.

Besides the Federal Reservice expected to cut rates next week, the European Central Bank (ECB) is leaning toward cutting rates. The ECB is seen cutting rates by 10 basis points on Thursday, with the U.S. central bank expected to lower rates by 25 basis points next week,