Day Traders Diary

4/14/20

The major averages resumed the sharp rebound from last month's lows, as investors grew more optimistic about the coronavirus outlook. The Dow Jones Industrial Average rallied 558 points, or 2.4%, to 23,949. The S&P 500 climbed 3.1% to 2,846 while the Nasdaq Composite advanced nearly 4% to 8,515. The tech-heavy Nasdaq notched its first four-day winning streak since early February.

The S&P 500 was led higher by 4% rallies in tech, consumer discretionary and consumer staples. Amazon rose to an all-time high to lead the Nasdaq higher. Tuesday's rally resumes a sharp rebound from the market lows set on March 23. Since then, the S&P 500 is up 27.5%. Investors have been cheering the apparent progress in the fight against the coronavirus along with unprecedented stimulus from the Federal Reserve.

Tuesday's gains come after a sharp drop in the previous session. The Dow lost 328 points, or 1.4%, on Monday while the S&P 500 declined by 1%.

New York Gov. Andrew Cuomo struck an optimistic tone about the outbreak in his state, the epicenter of the pandemic in the United States. He said Tuesday deaths related to the virus in the state are leveling off, adding the coronavirus hospitalization rate in New York remains low.

The number of coronavirus cases continues to rise globally. Data from Johns Hopkins University shows there are more than 1.9 million cases around the world, with over 598,000 in the U.S.

The corporate earnings season kicked off on Tuesday with JPMorgan Chase and Johnson & Johnson reporting their latest quarterly results, giving investors their first look at how devastating the hit to corporations has been from the pandemic. JPMorgan Chase reported a big profit decline for the first quarter. Johnson & Jonson shares gained 4.8% on better-than-expected earnings. Johnson & Johnson also said it could produce up to 900 coronavirus vaccine doses by April 2021, depending on how trials go.

Wells Fargo, meanwhile, reported first-quarter profits well short of expectations as the San Francisco-based bank set aside cash for credit losses amid the coronavirus pandemic. It reported earnings of 1 cent per share, below analyst estimates of 33 cents per share.

Analysts expect S&P 500 earnings growth to decline 10.2% in the first quarter year-over-year, according to Refinitiv.

U.S. Treasuries held firm despite the bullish price action in the stock market. The 2-yr yield declined one basis point to 0.22%, and the 10-yr yield was unchanged at 0.75%. The U.S. Dollar Index declined 0.5% to 98.85.