Day Traders Diary

12/28/20

The major averages jumped to record highs on Monday to start the final trading week of 2020 after President Donald Trump signed an economic relief bill. The Dow Jones Industrial Average finished up 204 points higher, or 0.68%. The S&P 500 climbed 32 points or 0.87%, while the Nasdaq Composite also rose 94 points or 0.74%.

Trump signed a $900 billion Covid-19 relief bill into law, averting a government shutdown and extending unemployment benefits to millions of Americans. The signing came days after Trump suggested he would veto the legislation, demanding $2,000 direct payments to Americans, instead of $600. The House is expected to vote on a $2,000 direct payment on Monday, but the GOP-led Senate is not expected to push it through.

Apple led the Dow higher, rising 3.2%. Goldman Sachs and Disney also contributed to the gains, climbing more than 2% each. Consumer discretionary, tech and communication services each rose more than 1% to lift the S&P 500.

Traders also sold Treasurys, pushing yields higher, in favor of riskier assets such as stocks. The benchmark 10-year note yield climbed to 0.95%.

Wall Street is coming off a quiet holiday week where the major averages were flat. The S&P 500 fell 0.2% last week as some investors took the chips off into the year-end. The 30-stock Dow eked out a 0.1% gain for the same period.

The major averages kicked off the new week with strong returns for the year. The S&P 500 has gained 15.6% in 2020, while the Dow has climbed 6.6%. The Nasdaq has soared 43.7% this year as investors favored high-growth technology names during the ongoing Covid-19 pandemic.

However, the number of coronavirus cases in the U.S. continues to increase. Over the past week, the U.S. has posted at least 184,000 new infections per day, according to data from Johns Hopkins University.

Dr. Anthony Fauci warned on Sunday that the country could see a surge in new Covid-19 infections after Christmas and New Year's celebrations. Two vaccines by Pfizer and Moderna have begun the distribution process this month. So far over one million people in the U.S. have been vaccinated.

U.S. Treasuries finished near their flat lines after starting the session with modest losses. The 2-yr yield was flat at 0.12%, and the 10-yr yield increased one basis point to 0.93%. The U.S. Dollar Index was little changed at 90.32.