Day Traders Diary

6/24/20

The major averages suffered their worst day in in two weeks as the increasing number of newly confirmed coronavirus cases dampened expectations of an economic recovery.

The Dow Jones Industrial Average dropped 710 points, or 2.7%, to 25,445. The S&P 500 closed 2.6% lower at 3,053 while the Nasdaq Composite slid 2.2% to 9,909. The tech-heavy Nasdaq posted its first daily decline in nine sessions.  It was the worst day for the Dow, S&P 500 and Nasdaq since June 11.

Florida said its confirmed cases jumped by 5,508 on Tuesday, a record, and now total 109,014. The state also said its positivity rate rose to 15.91% from 10.82%. Stocks fell to their session lows after Florida reported its latest case figures.  At one point, the Dow had fallen more than 800 points on Wednesday.

California is one of the states that has also seen a dramatic spike in cases, adding a record of more than 7,000 in one day on Tuesday. In Texas, the Covid-19 number of Covid-19 cases jumped by 5,489. Meanwhile, New York, New Jersey and Connecticut ordered visitors from certain hotspot states to quarantine for 14 days.

Shares of companies primed to benefit from the economy reopening faltered. United Airlines fell 8.3%. Delta, American and Southwest all slid over 7%. Airlines were especially hit by the quarantine orders issued by New York, New Jersey and Connecticut.

Carnival, Norwegian Cruise Line and Royal Caribbean were lower by 11.1%, 12.4% and 11.3%, respectively. Retailer Gap also fell 7.8%. Disney, meanwhile, declined by 3.9% after its Orlando theme-park workers petitioned to postpone the reopening amid the spike in cases in Florida.

Other negative-sounding news from today included the U.S. considering $3.1 billion in new export tariffs on European goods, the EU planning to proceed with its digital tax. Apple fell 1.8% planning to re-close seven stores in Houston, and Walt Disney fell 3.9% as employees reportedly petitioning the company to delay its Florida reopening.

U.S. Treasuries finished with modest gains amid the weakness in equities. The 2-yr yield declined one basis point to 0.18%, and the 10-yr yield declined two basis points to 0.69%. The U.S. Dollar Index rose 0.6% to 97.21. WTI crude fell 6.2%, or $2.50, to $37.88/bbl.