Day Traders Diary

5/21/20

The major averages pulled back following weak economic data and increased U.S.-China tensions. The Dow slid 101 points, or 0.41%, to close at 24,474. The S&P 500 dipped 0.78% to 2,948 while the Nasdaq Composite fell 0.97% to close at 9,284. The small-cap Russell 2000, however, eked out a 0.1% gain.

Weekly initial claims decreased by 249,000 to 2.438 million bringing the nine-week total to 38.636 million; continuing claims increased to an all-time high of 25.073 million; and existing home sales fell 17.8% m/m in April to a seasonally adjusted annual rate of 4.33 million.

On the U.S.-China front, the White House issued a report criticizing China's economic and military policies, President Trump accused China of a "disinformation and propaganda attack" on the U.S. and Europe, and a bipartisan group of Senators planned to introduce legislation to sanction China over new national security laws in Hong Kong.

Separately, buyers appeared to concentrate their efforts to the retail space following positive earnings/reopening news from TJX and BJ's Wholesale. Best Buy was an exception despite reporting positive quarterly results. Starbucks told partners that it's tracking slightly above its forecasted recovery curve.

U.S. Treasuries finished the session little changed. The 2-yr yield declined one basis point to 0.15%, and the 10-yr yield was unchanged at 0.68%. The U.S. Dollar Index increased 0.3% to 99.44. WTI crude increased another 1.3%, or $0.45, to $33.96/bbl.