Day Traders Diary

10/27/20

The major averages closed mixed with the Dow Jones Industrial Average finishing near the lows down 222 points or 0.8% at 27,463. The S&P 500 fell 10 points or 0.3% while the Nasdaq rose 72 points or 0.6%.

Caterpillar and Boeing were the biggest laggards in the Dow, falling 3% and 3.5%, respectively. After hours, Microsoft is up a percent following better than expected earnings.

Concerns over the coronavirus led investors to buy into the so-called stay-at-home trade, which is made up of stocks that benefit from people staying inside. Online retailers Shopify and Amazon rose 3.5% and 1.7%, respectively. Zoom Video gained more than 2%. Microsoft advanced nearly 1.8%.

Airlines, which would benefit from the economy reopening, fell broadly. American Airlines dropped 3.9% while United and Delta both slid more than 2%.

A CNBC analysis of data from Johns Hopkins University showed daily U.S. coronavirus cases have risen by an average of 69,967 over the past week, a record. The average number of Covid-19 hospitalizations has also risen by at least 5% in 36 states over the past seven days, according to data from the Covid Tracking Project. Wall Street was coming off a tough session, with the Dow posting its biggest one-day drop since early September. The decline was sparked in part by the rising number of coronavirus cases and an inability by lawmakers to push forward on new fiscal stimulus. Senate Majority Leader Mitch McConnell adjourned the Senate until Nov. 9, further diminishing the prospects of a deal being reached before the election.

Investors are also bracing for a potentially contested election result, which could lead to volatile trading in the markets.

U.S. Treasuries padded recent gains, pushing yields lower across the curve. The 2-yr yield declined one basis point to 0.15%, and the 10-yr yield declined two basis points to 0.78%. The U.S. Dollar Index decreased 0.1% to 92.96. WTI crude futures rebounded 2.5%, or $0.97, to $39.55/bbl