Day Traders Diary

6/16/20

The major averages are surging thanks to a record jump in retail sales coupled with positive trial results from a potential coronavirus treatment and hopes of more stimulus. The Dow Jones Industrial Average is up 900 points, or 3.5%. The S&P 500 and Nasdaq are higher by more than 2%.

The U.S. government reported a record 17.7% increase in retail sales for May. Economists polled by Dow Jones expected a gain of 7.7%. Meanwhile, multiple reports said a generic steroid, dexamethasone. a widely available drug, can help critically ill cornavirus patients.

Shares of companies that would benefit from the economy reopening led the premarket gains. United, Delta and American Airlines all rose at least 6.8%. Norwegian Cruise Line, Carnival and Royal Caribbean jumped more than 8% each. MGM Resorts, Kohl's and Simon Property advanced 7.5%, 6% and 6.7%, respectively.

Sentiment was also lifted after Bloomberg News reported, citing people familiar with the plan, the Trump administration is drawing up a $1 trillion infrastructure proposal. The report said a preliminary version being prepared would set aside the majority of the money for traditional infrastructure projects such as roads and bridges, though funds would also be reserved for 5G wireless infrastructure and rural broadband.

The moves early Tuesday followed a striking rebound in U.S. equity markets a day earlier.

The Dow Jones Industrial Average closed 157.62 points higher on Monday after the blue-chip index fell more than 760 points earlier in the session. The S&P 500 gained 0.8% while the Nasdaq Composite advanced 1.4%. The S&P 500 and Nasdaq had fallen as much as 2.5% and 1.9%

U.S. Treasuries are trading lower, pushing yields higher in a curve-steepening trade. The 2-yr yield is up two basis points to 0.20%, and the 10-yr yield is up four basis points to 0.74%. The U.S. Dollar Index is flat at 96.74. WTI crude is up 1.9% to $37.82/bbl amid an IEA forecast for a record rebound in oil demand in 2021.