Day Traders Diary

10/13/20

The major averages fell grappling with the latest news regarding U.S. coronavirus stimulus and treatments as well as the first batch of corporate earnings. The Dow Jones Industrial Average dropped 157 points, or 0.55%, as Apple shares declined. The S&P 500 slid 22 points or 0.6%. The Nasdaq slid 12 points or 0.1%.

The major averages fell to their lows of the day at around 2:30 p.m. ET after U.S. regulators paused Eli Lilly's late-stage coronavirus trial due to safety concerns. The news follows Johnson & Johnson halting its coronavirus vaccine trial after an "adverse event" was reported. Eli Lilly shares were down more than 2% and J&J slid 2.3%.

House Speaker Nancy Pelosi, D-Calif., told fellow lawmakers in a letter that the White House's proposal for new coronavirus aid has insufficient offers on health-care issues. Meanwhile, Senate Majority Leader Mitch McConnell, R-KY, said Tuesday the legislative body would vote next week on a smaller stimulus package.

Pelosi and McConnell's comments came after the Trump administration called on Congress over the weekend to pass a smaller $1.8 trillion coronavirus relief bill as negotiations on a bigger package continue to run into roadblocks.

The big banks started off earnings season with better than expected results for JP Morgan and Citigroup. However, all the big banks declined 1.5% or more today. Dow member Johnson & Johnson posted earnings that beat analyst expectations and raised its full-year profit guidance.

Asset-management giant BlackRock saw its shares gain 4.7% after the company reported earnings that beat analyst expectations. BlackRock also said its assets under management grew to $7.81 trillion from $7.32 trillion in the previous quarter.

Delta Air Lines reported a wider-than-expected loss for the quarter and revenue down 75% compared with the same quarter last year. Shares fell 3.2%.

Third-quarter earnings are expected to have declined significantly; however, traders are hoping for a surprise to the upside.

Within the communication services sector, Walt Disney was a bright spot up over 3% after announcing a strategic reorganization for its media and entertainment businesses while Netflix jumped 2.7% after reportedly removed free trial offerings for U.S. subscribers. Shareholders liked both news.

U.S. Treasuries ended the session with gains that caused some curve-flattening activity. The 2-yr yield declined one basis point to 0.15%, and the 10-yr yield declined five basis points to 0.73%. The U.S. Dollar Index gained 0.5% to 93.53. WTI crude futures increased 2.2%, or $0.85, to $40.19/bbl.