Day Traders Diary

12/12/19

The major averages performed well as sources at CNBC said the U.S. and China have agreed to a trade deal in principle. The S&P 500 gained 0.9% to end the day at 3,168 notching a record close. The Nasdaq Composite also posted an all-time closing high, rising 0.7% to 8,717. The Dow Jones Industrial Average closed up 220 points higher, or 0.8% at 28,132. All three of the major averages reached intraday records, their first since Nov. 27.

U.S. negotiators have the terms of the deal ready for President Donald Trump's review. CNBC confirmed reports from earlier in the day that said U.S. negotiators are offering to cancel new China tariffs and reduce existing levies on Chinese goods by up to 50% on $360 billion worth of imports. The latest trade news comes ahead of a key Sunday deadline. If an agreement is not reached by Sunday, additional U.S. levies on Chinese products will take effect. Trump said in a tweet earlier in the day both sides were getting "VERY close to a BIG DEAL with China."

The S&P 500 cyclical sectors led the advance, with the energy sector up 2% finding additional support in higher oil prices, $59.18, +0.44, +0.8%. The financials sector rose 2% benefiting from some curve-steepening activity. Trade-sensitive stocks like Wynn Resorts rose 9.5% while the Philadelphia Semiconductor Index outperformed up 2.7.

In other corporate news, Delta Air Lines rose 2.9% with a reassuring 2020 forecast. General Electric rose 3.3% and FedEx rose 3.7% benefitting from analyst upgrades.

The 2-yr yield rose six basis points to 1.67%, and the 10-yr yield rose 11 basis points to 1.90%. The U.S. Dollar Index increased 0.1% to 97.29.