Day Traders Diary

12/24/19

The major averages closed near the flatline with only the Nasdaq Composite edged higher to another new record in a muted Christmas Eve trading day. The Dow Jones Industrial Average fell 36 points, or 0.1%, to 28,515 while the S&P 500 finished the day little changed at 3,223. The Nasdaq Composite rose slightly to hit a new record high of 8,952, posting its ninth consecutive record close for the first time since 1998.

The three major averages all posted record closes on Monday. The S&P 500 has risen 2.6% for December and 8.2% for the quarter. It is also on pace for its best annual performance in six years, up 28.6% for 2019 through Monday's close. If the benchmark ends the year up more than 29.6%, it will score the best year since 1997.

Today also marks the bottom from last year when all the major averages fell 2% heading into Christmas. Since then, the S&P 500 is up more than 37%. All 11 main sectors of the S&P 500 are up at least 10% since their closing level last Christmas Eve. Information Technology leads the way, up nearly 58%.

Tuesday marked the official start of the Santa Claus rally period, which happens on the final five trading days of the year and the first two trading days of the new year. Stocks tend to have unusually strong performance during those trading days with the S&P 500 averaging a 1.3% gain since 1950, according to the Stock Trader's Almanac.

Separately, both U.S. Treasuries and gold futures saw an uptick in demand, perhaps on some speculation that North Korea may launch a test missile during the Christmas holiday.

Prior to the U.S. Treasury market's early closure, the 2-yr yield was down one basis point to 1.64%, and the 10-yr yield was down three basis points to 1.91%. The U.S. Dollar Index was little changed at 97.65. WTI crude gained 0.8%, or $0.49, to $61.01/bbl.