Day Traders Diary

2/6/20

The major averages rose to all-time highs after China announced it will halve tariffs on a slew of U.S. products. Strong corporate earnings results and solid economic data also gave the major indexes a boost. The Dow Jones Industrial Average closed up 88 points higher at 29,379. The S&P 500 climbed 0.3% to close at 3,345 while the Nasdaq Composite advanced 0.7% to 9,572.

Boeing shares led the Dow higher with a 3.6% gain. Microsoft contributed to the advance, rising more than 2%. Communication services and tech were the best-performing sectors in the S&P 500, rising more than 0.8% each.

China announced overnight it will halve tariffs on U.S. imports totaling about $75 billion. China's finance ministry said the tariff cut was timed in conjunction with a U.S. decision last month to halve tariffs on roughly $120 billion worth of Chinese products. Tariffs on some U.S. goods will be cut from 10% to 5%, and from 5% to 2.5% on others, which will take effect on Feb. 14.

That decision was made as part of a broader "phase one" trade deal between China and the U.S. The agreement put the U.S.-China trade war, which had been hurting global growth prospects, on hold. President Donald Trump has said previously a phase-two agreement would be struck at a later date.

The cut also comes after the coronavirus death toll in China rose to 563, with a total of 28,018 cases confirmed as drug makers race to find a vaccine.

On the earnings front, Twitter rose 15% while Cardinal Health jumped 10%. Becton Dickinson fell 11% while Kellogg dropped 8% on earnings.  

Separately, Boeing rose 3.6% shares outperformed on reports that the FAA will approve the company's design fixes to the 737 MAX. New software flaws were discovered but the goal to return to service by mid-year remained intact, according to Bloomberg.

U.S. Treasuries finished a quiet session little changed. The 2-yr yield was unchanged at 1.45%, and the 10-yr yield declined one basis point to 1.64%. The U.S. Dollar Index increased 0.2% to 98.49. WTI crude increased 0.2% to $50.97/bbl.