Day Traders Diary

9/24/20

The major averages rebounded in a volatile day of trading as tech stocks rebound while traders weighed the latest batch of weak economic data. The Dow Jones Industrial Average closed up 52 points or 0.2%, at 26,815. The Dow was down over 220 points while also rising over 300 points. The S&P 500 climbed 0.3% to 3,246 while the Nasdaq Composite advanced 0.4% to 10,672.

Apple and Microsoft shares rose 1% and 1.3%, respectively, to lead tech higher. Alphabet shares gained nearly 1% and Amazon advanced 0.7%. Netflix was up 0.5% and Facebook advanced 0.2%.

Market sentiment was kept in check, however, as first-time claims for state unemployment benefits totaled 870,000 for the week ended Sept. 19. That's more than a Dow Jones estimate of 850,000. Continuing claims — which include those who have received unemployment benefits for at least two straight weeks — declined slightly but were still higher than forecast.

The mixed economic data came as the U.S. government faces a potential fiscal cliff by the end of the month. Wall Street is also grappling with a lack of new fiscal stimulus, which several economists and the Federal Reserve argue is needed for the economic recovery to continue.

This lack of a stimulus bill led Goldman Sachs to slash its fourth-quarter GDP forecast to 3% from 6% on an annualized basis.

CNBC reported, citing a source familiar with the matter, that Democrats are putting together a scaled-back aid package and plan to vote on it next week. The source said the bill would cost $2.4 trillion, which is well above what Republicans and the White House said they would agree to.

Traders have had a tough month in September, with the major market benchmarks falling sharply as tech shares lose steam.

So far in September the S&P 500 has declined 7.3%, while the Dow has shed 5.7%. The Nasdaq Composite has been the relative underperformer, registering a loss of 9.4% as investors rotate out of Big Tech. Facebook, Amazon, Apple, Netflix, Alphabet and Microsoft are all down at least 9.9% in September.

U.S. Treasuries traded within another narrow range and closed little changed. The 2-yr yield was unchanged at 0.13%, and the 10-yr yield decreased one basis point to 0.67%. The U.S. Dollar Index declined 0.1% to 94.33. WTI crude futures gained 0.9%, or $0.37, to $40.31/bbl.