Day Traders Diary

5/27/20

The major averages rose for a second day on Wednesday as Wall Street grew more optimistic about the economy reopening. The Dow Jones Industrial Average jumped 553 points, or 2.2%. The 30-stock average also closed above 25,000 for the first time since March 10^th. The S&P 500 closed 1.5% higher after briefly trading lower. The S&P 500 closed above 3,000 for the first time since March. The Nasdaq Composite gained just 0.8% as a number of techs succumbed to profit-taking.

Bank stocks rose broadly. JPMorgan Chase was up 5.8% while Citigroup advanced 8.5%. The SPDR S&P Bank ETF (KBE) gained 7% along with the SPDR S&P Regional Banking ETF (KRE). Both ETFs were on pace for their best weekly performances since April. The Mortgage Bankers Association reported a sixth straight weekly rise in mortgage applications. Data released Tuesday showed new home sales in April topped estimates. Sales of new U.S. single-family homes increased by 623,000 last month, beating estimates of 490,000, according to Dow Jones.

Stocks that benefited from people staying at home struggled on Wednesday as investors rotated out of those names. Zoom Video dropped 1.2%. Shopify, Amazon and Teladoc Health fell 2.3%, 0.6% and 1.1%, respectively.

The possibility for more fiscal stimulus was regarded as positive news, while the threat of increased U.S.-China tensions remained something to consider but nothing to worry about. President Trump, meanwhile, threatened "big action" against Twitter after the company issued fact-checking labels on two of his tweets.

U.S. Treasuries finished mixed and little changed. The 2-yr yield was unchanged at 0.17%, and the 10-yr yield declined two basis points to 0.68%. The U.S. Dollar Index increased 0.1% to 99.01. WTI crude declined 1.1% (-$0.38) to $33.98/bbl.