Day Traders Diary

9/29/20

The major averages pullback for the first time in four days amid renewed concern over the coronavirus outbreak in New York City. The Dow Jones Industrial Average closed 131 points lower, or 0.5%, at 27,452. The S&P 500 also dipped 0.5% to end the day at 3,335 while the Nasdaq Composite slid 0.3% to 11,085. The major averages snapped a three-day winning streak.

The major averages fell to their lows of the day after New York City Mayor Bill de Blasio said the city's daily positive rate of coronavirus tests is back above 3% for the first time in months.

September has been a tough month for traders, with the major averages headed for their first monthly decline since March. Month to date, the S&P 500 has dropped 4.7% and the Dow has lost 3.4%. The Nasdaq is down 5.9% over that time period as shares of big tech companies struggle.

Traders also looked ahead to the first debate between President Donald Trump and Democratic nominee Joe Biden set for Tuesday night. Some Wall Street analysts believe the first debate of this cycle could be more consequential for the markets than most debates, with a clear victory by one candidate possibly creating significant volatility.

Meanwhile, House Democrats unveiled a new $2.2 trillion stimulus package, smaller than the more than $3 trillion proposed earlier in the crisis but still well above what Republican leaders have offered. The new bill includes enhanced unemployment benefits and aid to airlines and state and local governments.

In economic news Tuesday, The Conference Board said consumer confidence jumped much more than expected, hitting a print of 101.8 for September. Economists polled by Dow Jones expected consumer confidence to rise to 90.1 from 86.3 in August.

Elsewhere, defensive positions were taken in U.S. Treasuries, which pushed yields lower, and gold futures ($1903.20, +21.20, +1.1%). The 2-yr yield declined three basis points to 0.11%, and the 10-yr yield declined two basis points to 0.65%. The U.S. Dollar Index fell 0.4% to 93.91.