Day Traders Diary

8/26/19

The major averages rebounded after a 600 point decline last Friday. President Donald Trump this morning said China is ready to come back to the negotiating table following a phone call late Sunday causing the Dow futures to reverse from a nearly 300 point decline to a nearly 300 point rally on the open. The Dow Jones Industrial Average finished up 269 points 1.1% to 25,898. The S&P 500 climbed 1.1% to 2,878.38 while the Nasdaq Composite advanced 1.3% to close at 7,853.

Speaking to reporters at the Group of Seven (G-7) meeting in Biarritz in France Monday, Trump said the two countries would start talking very seriously. China's Foreign Ministry spokesman denied knowledge of any such calls while Chinese press downplayed the significance of Mr. Trump's statement. In a conciliatory move, President Trump reciprocated China's willingness to resolve their dispute through "calm" negotiations.

Gains were broad-based on a relatively light trading volume day. Among the sectors, the two best sectors went to communication services up 1.5% and information technology up 1.4%.

In key corporate news, Bristol-Myers rose 3.3% after selling Celgene's psoriasis drug, Otezla to Amgen for $13.4 billion in cash.  Bristol-Myers is looking to sell the Otezla drug to appease any antitrust concerns to get their merger agreement with Celgene approved. Celgene and Amgen both rose 3%.

 Target closed up a percent after announcing a retail collaboration with Walt Disney to bring the Disney Store within select Target stores starting Oct. 4th. Disney rose 2%.

U.S. Treasuries finished the day lower, giving up an overnight rally following President Trump's trade comments. The 2-yr yield increased two basis points to 1.55%, and the 10-yr yield increased one basis point to 1.55%. The U.S. Dollar Index advanced 0.4% to 98.07. WTI crude lost 0.9% to $53.70/bbl on speculation that a possible U.S.-Iran meeting could lead to oversupply.