Day Traders Diary

6/1/20

The major averages rebounded from earlier losses starting off a new month to the plus side due to increasing hopes of a successful reopening of the economy. The Dow Jones Industrial Average gained 91 points, or 0.4%, to close at 25,475. The S&P 500 climbed 0.4% to 3,055 while the Nasdaq Composite added 0.7% to end the session at 9,552. The S&P 500 closed at its highest level since early March while the Nasdaq ended the session at levels not seen since late February.

Early in the day, investors showed little conviction following the nationwide protests over the death of George Floyd and a Bloomberg report that suggested Chinese officials instructed major state-run agricultural companies to pause their purchases of some U.S. agricultural products. Despite the negative backdrop, reopening optimism slowly pushed stocks higher.

Shares of beaten-down small-caps, banks, airlines, cruise lines, and energy companies were among the biggest gainers. At the same time, investors assumed some defensive positioning within the mega-caps and the S&P 500 real estate (+2.1%) and utilities (+1.0%) sectors, which outperformed alongside the financials (+1.2%) and energy (+1.7%) sectors.

Separately, reports indicated that OPEC moved up its production meeting to June 4 and that it's close to reaching an agreement with Russia to extend production cuts by another two months. WTI crude futures declined 0.6%, or $0.21, to $35.28/bbl despite the news.

U.S. Treasuries ended the session little changed. The 2-yr yield and the 10-yr yield were flat at 0.15% and 0.65%, respectively. The U.S. Dollar Index declined another 0.5% to 97.82, as reopening optimism increased demand for foreign currencies.