Day Traders Diary

4/6/20

The major averages soared today from sharp losses in the previous week, as the number of new coronavirus cases in the U.S. appeared to slow down. The Dow Jones Industrial Average closed 1,627 points higher, or more than 7%, at 22,679. The S&P 500 gained 7% to close at 2,663 while the Nasdaq Composite surged 7.3% to 7,913. The major averages rallied to their session highs in the final minutes of the session, with the Dow briefly trading more than 1,700 points higher.

Boeing gained more than 19% to lead the Dow higher. Raytheon Technologies, American Express and Visa rose more than 11% each. The S&P 500 was led higher by the utilities, consumer discretionary and tech sectors, all of which closed more than 7% higher. Retail stocks such as Nordstrom, Kohl's and Macy's also rose sharply.

Investors were encouraged by data that shows a slowing in the number of daily U.S. coronavirus cases, although it is still early to determine a lasting trend. There were about 30,000 new cases on Thursday, 32,100 cases on Friday, 33, 260 cases on Saturday, and then a slowing to just 28,200 new cases Sunday, according to the latest data from Johns Hopkins.

The Trump administration also noted on Sunday there are signs of stabilization in hospital rates, helping to lift Wall Street sentiment on Monday. Meanwhile, New York State reported 594 new coronavirus deaths on Sunday, fewer than 630 on Saturday, marking the first daily decline in coronavirus-related deaths. Slowing death rates in Europe also offered up some hope that the U.S would be nearing its peak soon as well and that social distancing measures are working.

Last week, the major averages posted their third weekly decline in four. The Dow slid 2.7% while the S&P 500 lost 2.1%. The Nasdaq Composite closed last week down 1.7%. Stocks are also deep in bear-market territory as concerns over the coronavirus outbreak have virtually shut down the global economy and have dampened sentiment around corporate profits.

OPEC+ postponed its production-cut meeting to later this week, which contributed to WTI crude pulling back 7.5%, or $2.13, to $26.21/bbl today. A decision might wait until Friday after a G-20 emergency energy meeting, according The Wall Street Journal. 

In other news, the Fed announced the establishment of a facility that will purchase small business loans that are guaranteed by the White House's Payroll Protection Program (PPP). Delta Air Lines did not bounce as the company said their second quarter revenue will be down 90%.

U.S. Treasuries started the week on a lower note amid the risk-on mindset displayed in the stock market. The 2-yr yield increased eight basis points to 0.27%, and the 10-yr yield increased nine basis points to 0.68%. The U.S. Dollar Index increased 0.2% to 100.73.