Day Traders Diary

11/7/19

The major averages closed higher after the world's two largest economies reportedly agreed to remove existing trade tariffs, sparking a huge rotation into equities and out of bonds.The 10-year Treasury yield had its biggest upward move since the day after President Donald Trump was elected, trading at 1.95% from 1.81% in the previous session. Bond yields move inversely to prices.

The Dow Jones Industrial Average climbed 186 points to close at 27,674. Trade bellwethers, Caterpillar and Boeing were both up at least 1%. The S&P 500 rose 0.3% as the financials gained 0.7%. Energy stocks also performed well up 1.6%. The Nasdaq Composite, meanwhile, hit an intraday record of 8,483.16 before closing 0.3% higher.

The banks took advantage of the interest rate move. Bank of America shares rose 1.3%. Citigroup and J.P. Morgan Chase climbed 1.9% and 0.5%, respectively.

Gao Feng, a ministry spokesperson for China's Commerce Ministry, said that both sides had agreed to simultaneously cancel some existing tariffs on one another's goods, according to the country's state broadcaster. The ministry spokesperson said that both sides were closer to a so-called "phase one" trade agreement following constructive negotiations over the past two weeks.

A U.S. official also said both sides agreed to the tariffs rollback, according to Reuters. The outlet also reported the plan faces fierce internal opposition in the White House, leading stocks to pare their gains into the close.