Day Traders Diary

8/18/20

The major averages closed mixed once again as the S&P 500 rose to an all-time high on Tuesday, capping off its incredible recovery from the coronavirus-induced sell-off that knocked it off its previous record back in February.  The Dow Jones Industrial Average lagged, falling 66 points, or 0.2%, to 27,778 as Home Depot and Walmart closed in the red despite strong earnings results.

The broader market index climbed 0.2% to 3,389.78, a record close. It also notched an intraday all-time high, reaching 3,395.06 earlier in the day. The S&P 500′s move into record territory came after the index flirted with its all-time closing high for more than a week. It also confirms the start of a new bull market.

Amazon shares outperformed, rising more than 4% on Tuesday. Netflix and Alphabet both gained at least 2%. Consumer discretionary was the best-performing sector in the S&P 500, rising 1.5%.

The Nasdaq Composite also hit a record, climbing 0.7% to 11,210.84. The Dow Jones Industrial Average lagged, falling 66.84 points, or 0.2%, to 27,778.07 as Home Depot and Walmart both dipped despite strong earnings results.

In corporate news, Oracle rose 2% reportedly joined the list of companies trying to acquire TikTok. Kohl's fell 14% following earnings and comments about a softer back-to-school selling season. Teva Pharma dropped 9% on news it is reportedly being sued by the U.S. government over alleged kickbacks violating the False Claims Act.

Separately, Politico reported that Senate Republicans are aiming to introduce a smaller stimulus package that will provide $300/week in enhanced unemployment, money for the USPS, and more money for small businesses. Additional fiscal support would provide investors some confidence in the large retailers sustaining their strong performances.

U.S. Treasuries finished the session slightly higher. The 2-yr yield declined one basis point to 0.14%, and the 10-yr yield declined one basis point to 0.67%. The U.S. Dollar Index fell another 0.6% to 92.30, which benefited gold futures ($2013.2/ozt, +14.50, +0.7%). WTI crude futures declined 0.2%, or $0.09, to $42.80/bbl.