Day Traders Diary

8/17/20

The major averages closed at record levels on Thursday, boosted by hopes that Washington will come through on additional fiscal aid before the end of 2020. The S&P 500 gained 0.6% to end the day at 3,722 while the tech-heavy Nasdaq Composite advanced 0.8% to 12,764. The Dow Jones Industrial Average climbed 148 points, or 0.5%, to 30,303. Both the S&P 500 and Nasdaq hit intraday and closing records.

Real estate, materials and health care were the best-performing sectors in the S&P 500, rising more than 1% each. Johnson & Johnson rose 2.6% to lead the Dow higher.

Congressional leaders on Wednesday closed in on a $900 stimulus package that would include direct payments to individuals.

The measure would exclude liability protections for businesses as well as aid to state and local governments, CNBC confirmed. Disagreements over those issues have been a stumbling block in the latest round of negotiations.

Senate Majority Leader Mitch McConnell, R-Ky., said Thursday that a coronavirus relief deal was close at hand.

The latest round of U.S. fiscal stimulus talks comes as Covid-19 cases increase at a record pace. The U.S. is recording at least 215,729 additional Covid-19 cases each day, based on a seven-day average calculated by CNBC using Johns Hopkins University data. On Wednesday alone, more than 247,000 new infections were confirmed.

This resurgence in Covid-19 cases has led to states reimposing stricter social-distancing measures that are slowing down parts of the economy, especially the labor market.

On Thursday, data showed jobless claims totaled 885,000 last week, hitting their highest level since early September. Economists expected 808,000 workers sought state jobless benefits during the week ended Dec. 12.

On Wednesday, the Federal Reserve pledged to keep buying bonds until the economic recovery was completed. Fed Chairman Jerome Powell also said the central bank would increase its bond purchases if the recovery slows down.

U.S. Treasuries edged lower in a relatively uneven session, as investors contemplated a 23,000 increase in weekly initial claims to 885,000 (Briefing.com consensus 795,000) and the incoming new supply of Treasuries needed to finance a potential stimulus bill. The 2-yr yield increased one basis point to 0.13%, and the 10-yr yield increased one basis point to 0.93%.