Day Traders Diary

11/6/20

The major averages closed relatively flat on Friday as traders looked for clarity around the presidential and congressional election results. Sentiment was kept in check by better-than-expected U.S. unemployment data. The Dow Jones Industrial dipped 66 points, or 0.2%, to end the day at 28,323. The S&P 500 ended the session down less than a point at 3,509. The Nasdaq Composite rose less than 0.1% or 4 points to 11,895.

Democratic nominee Joe Biden leads with 253 electoral votes, according to NBC News projections, while President Donald Trump has 214. Votes are still being counted in several key states including Nevada, Arizona, Pennsylvania and Georgia. According to NBC News, Biden has a slight lead in Georgia and Pennsylvania.

Despite the uncertainty around the presidential vote, Wall Street notched its best weekly performance since April. The S&P 500 and Nasdaq jumped 7.3% and 9%, respectively, for the week. The Dow rose 6.9% this week. The S&P 500 also posted its biggest election week gain since 1932.

Victories by Republicans in several key Senate races, thus lowering the odds of a "blue wave" and the potential for higher taxes and stronger regulations, have been cited by Wall Street strategists as a reason for the rally in stocks. However, Republicans have not yet won the necessary seats to control the Senate, according to NBC News projections, with two potential run-off elections in Georgia.

Beneath the index and sector levels was a more interesting story with lots of earnings movers. To name a few, T-Mobile US and CVS Health rose 5%. Uber rose 6.9% while Square jumped 13%. Electronic Arts was one of the few dogs down 7% on disappointing sales and guidance.  

In the Treasury market, longer-dated maturities succumbed to renewed selling interest following the release of the employment report. The 2-yr yield increased one basis point to 0.16%, and the 10-yr yield increased four basis points to 0.82%. The U.S. Dollar Index decreased 0.3% to 92.26.