Day Traders Diary

10/7/20

The major averages rose sharply on Wednesday after President Donald Trump tweeted support for aid to airlines and other stimulus measures, stoking hope that a smaller aid package could be passed by lawmakers. The Dow Jones Industrial Average closed 530 points higher, or 1.9%, at 28,303. It was the Dow's biggest one-day gain since mid-July. The S&P 500 climbed 1.7% to 3,419 while the Nasdaq Composite advanced 1.9% to 11,364.

In a series of tweets Tuesday night, urged Congress to approve airline payroll support, saying that money and aid for small business could be paid for with unused funds from the previous stimulus. Trump also pushed for another round of $1,200 stimulus checks for Americans.

Shares of United Airlines gained more than 4%. Delta gained 3.5%. Airline stocks also got a boost after a JPMorgan analyst upgraded several companies in the industry. Boeing shares were up 3.2%. Cruise operators — another group that would benefit from the economy reopening — rose broadly. Carnival jumped 5.3%. Norwegian Cruise Line advanced 4.5% and Royal Caribbean gained 2.8%.

Market sentiment also got a boost after Eli Lilly said it was looking for FDA clearance for its coronavirus antibody drug. Eli Lilly shares jumped 3.4%.

The major averages closed sharply lower on Tuesday after Trump tweeted the White House is halting talks with Democrats about a second coronavirus stimulus deal. Earlier in the session, stocks rallied in hopes that there would be a second relief package to prop up markets as the coronavirus outbreak continues.

Inside the communication services sector, Netflix rallied nearly 6% after Pivotal Research Group raised its price target on the stock to a Street-high $650 from $600. Facebook was one of the few techs to decline on antitrust concerns stemming from a report from the House antitrust committee.

Separately, the FOMC Minutes for the Sept. 15-16 meeting provided no surprises. Fed officials expressed concerns regarding a recovery if there is no more fiscal stimulus and remained in agreement that the current environment is disinflationary.

U.S. Treasuries finished lower on the longer-end of the curve, sending those yields back to their highest levels of the week. The 2-yr yield finished unchanged at 0.15%, while the 10-yr yield increased four basis points to 0.79%. The U.S. Dollar Index finished flat at 93.64. WTI crude declined 1.8%, or $0.71, to $39.96/bbl.