Day Traders Diary

12/16/19

The major averages closed higher for a fourth straight day as the US.-China phase one trade deal is done. The Dow Jones Industrial Average finished up 100 points. The S&P 500 and Nasdaq closed up 0.7% and 0.91% respectively.  Sentiment was also lifted by strong economic data out of China. Chinese industrial production rose 6.2% in November on a year-over-year basis, topping expectations. Retail sales in China also jumped 8% last month.

The gains in the Dow would be higher if not for a 4.2% drop in Boeing. Shares of the aerospace giant fell after The Wall Street Journal reported Sunday the company was nearing a decision on possibly halting or cutting production of the 737 Max. The report follows Federal Aviation Administration chief Steve Dickson telling CNBC last week the 737 Max jet's return was unlikely to be cleared until 2020.

The U.S. and China announced Friday they will move forward with a so-called phase one trade deal. As part of the agreement, the U.S. will roll back some levies on Chinese products and China will increase its purchases of U.S. agricultural products. Treasury Secretary Steven Mnuchin said will be inked in January.

Tech shares rose 0.9% and hit a record, led by a 3.4% gain in Micron Technology and a 4.1% jump in Western Digital. Goldman Sachs helped the Dow reach an all-time high, rising 1.4%.

In M&A activity, DuPont agreed to merge its Nutrition & Biosciences unit with International Flavors in a combined $45.4 billion deal. WPX Energy jumped 9% after agreeing to purchase Felix Energy for $2.5 billion.

U.S. Treasuries finished on a lower note, driving yields higher in a curve-steepening trade. The 2-yr yield increased three basis points to 1.53%, and the 10-yr yield increased seven basis points to 1.89%. The U.S. Dollar Index declined 0.1% to 97.05. WTI crude increased 0.2%, or $0.10, to $60.21/bbl.