Day Traders Diary

11/29/19

The major averages finish lower on Black Friday as investors await a concrete trade deal with China. The Dow Jones Industrial Average dipped 112.59 points, or 0.4%, to 28,051. The S&P 500 slipped 0.4% to 3,140 while the Nasdaq Composite fell nearly 0.5% to 8,665. Friday's session ended at 1 p.m. after the market was closed Thursday due to the Thanksgiving holiday.

The major averages posted strong monthly gains despite Friday's losses. The S&P 500 climbed 3.4% to notch its biggest one-month gain since June, when it rallied more than 6%. The Dow and Nasdaq Composite gained 3.7% and 4.5%, respectively, for November. They also had their best month since June. For the week, the Dow gained 0.6% while the S&P 500 and Nasdaq advanced 1% and 1.7%, respectively.

Stocks were on fire this month in large part because of optimism around the U.S.-China trade negotiations. Back in October, President Donald Trump said the two sides had reached a "phase one" trade deal to be signed this month.

The optimism has taken some hits recently, particularly this week after Trump signed two pieces of legislation supporting protesters in Hong Kong. China's foreign ministry claimed the U.S. has "sinister intentions" after Trump signed the bills into law. A spokesman for the Chinese foreign ministry added Friday the country will take "strong counter-measures" against the U.S.

All eleven sectors ended the day in negative territory. The energy sector, down 1%, spent the day at the bottom of the leaderboard but was able to climb off its low ahead of the close. The sector lost 1.6% for the week, pressured by significant weakness in the price of crude oil. The energy component fell more than 4.0% to $55.52/bbl, sliding back below its 50-day moving average. OPEC and OPEC+ producers will meet in Vienna next week, but there are concerns that they will not agree to lower output.

The consumer discretionary sector was the second weakest performer, as retailers trailed the broader market after showing relative strength earlier this week. A number of retailers like Walmart, Target, Disney and Ross Stores have performed well heading into the holiday season, trading near or at all time highs. Peloton jumped 9% to new highs today, one of the few recent IPOs that has performed well.

Treasuries showed modest losses when the stock market closed with the 10-yr yield up a basis point at 1.78%. However, the Treasury market will not close until 14:00 ET.