Day Traders Diary

8/21/19

The major averages performed well today thanks to strong earnings from Target and Lowes even as interest rates pulled back signaling recession fears again in the last hour of trading.

The Dow Jones Industrial Average closed up 240 points at 26,202. The S&P 500 and Nasdaq gained 0.8%. Target surged more than 20% to record highs after the retailer posted second-quarter results that topped analyst expectations. The company's same-store sales, a key metric for retailers, expanded by 3.4%. Analysts expected growth of 2.9%. Lowe's jumped 10.4% on its second-quarter earnings report. CEO Marvin Ellison said the company capitalized on strong "holiday event execution and growth in Paint and our Pro business to deliver strong second quarter results."

All 11 S&P 500 sectors finished in positive territory, with the consumer discretionary up 1.8% and information technology up 1.2%.

The FOMC minutes produced some knee-jerk selling on the shorter-end of the yield curve, causing some curve-flattening activity that garnered some negative-minded attention. The 2-yr yield increased six basis points to 1.57%, and the 10-yr yield increased two basis points to 1.58%. At one point before the close, the 2s10s spread briefly inverted again.

The U.S. Dollar Index increased 0.1% to 98.29. WTI crude declined 0.9%, or $0.53, to $55.65/bbl.