Day Traders Diary

12/20/19

The major averages rose to fresh record highs on Friday to end the week with solid gains as geopolitical risks abate toward the end of a blockbuster 2019. The S&P 500 rose 0.5% to 3,221 while the Nasdaq Composite advanced 0.4% to 8,924 and notched an eight-day winning streak. The Dow Jones Industrial Average climbed 78.13 points, or 0.3% to 28,455. The S&P 500 rose more than 1.5% for the week and posted its fourth consecutive weekly gain. The Dow and Nasdaq was up 1.2% and 2.1%, respectively, for the week. The S&P 500 and Nasdaq also had their best weekly performance since August. The S&P 500 is up nearly 28.5% year to date with less than 10 trading days left in 2019. That would be the index's best one-year performance since 2013, when it rallied 29.6%.

Wall Street also got a boost after President Donald Trump tweeted he had a "very good talk" with Chinese President Xi Jinping about the U.S.-China trade deal, noting "China has already started large scale purchases of agricultural product & more."

Meanwhile, consumer spending growth for the third quarter was revised higher to 3.2% from 2.9%. Sentiment among consumers also remained strong in December.

Carnival shares led the S&P 500 higher, surging more than 7% on strong quarterly results. Verizon and 3M both rose more than 1.8% to push the Dow into record levels. Boeing fell a percent on more headline risks due to United Airlines extending its 737 MAX cancellations through June 4, and Boeing's Starliner spacecraft failed a NASA mission.

In pre-holiday earnings news, Nike fell a percent while CarMax dropped 6% following earnings. Carnival rose 7%, Blackberry rose 12% while Winnebago rose 7% on earnings.

U.S. Steel dropped 10% after issuing downside quarterly guidance and cut its dividend to $0.01/share from $0.05/share.

All 11 S&P 500 sectors finished higher, led by the energy, utilities and health care sectors.

U.S. Treasuries finished the session on a lower note, pushing yields modestly higher. The 2-yr yield increased three basis points to 1.63%, and the 10-yr yield increased one basis point to 1.92%. The U.S. Dollar Index advanced 0.3% to 97.70. WTI crude declined 1.5%, or $0.92, to $60.38/bbl.