Day Traders Diary

12/31/20

The major averages wrapped up this volatile and unprecedented year in positive territory with the S&P 500 closing at all-time highs.  The Dow closed up 196 points higher, or 0.7%, at 30,606. The S&P 500 climbed 0.6% to 3.756 while the Nasdaq Composite advanced 18 points or 0.14% at 12,888.

The major averages surged in the last two hours of trading with Intel up 2.2% leading the Dow higher. Financials and utilities advanced more than 1% each to lift the S&P 500.

Thursday's moves came after the release of a better-than-expected reading on U.S. weekly jobless claims. The number of first-time unemployment-benefits filers totaled 787,000 for the week ending Dec. 26, the Labor Department said Thursday. Economists polled by Dow Jones were expecting a print of 828,000.

2020′s was an unprecedented year with equities falling sharply in February and March as the Covid-19 pandemic spread outside of China and forced countries into lockdowns that grinded economic activity to a halt. The S&P 500 suffered its most rapid 30% drawdown on record.

But after bottoming out in late March, and amid massive action by the Federal Reserve to shore up the credit markets, stocks rebounded dramatically and have ripped off a series of record highs before the end of year. The latest moves into record territory came amid the rollout of several Covid-19 vaccines and a new economic relief package from Congress.

The tech-heavy Nasdaq Composite gained 43.6% this year, posting its best one-year performance since 2009. The S&P 500 closed 2020 with a 16.3% gain. The Dow rose 7.3% in 2020.

The S&P 500 closed up or down at least 1% in 110 of this year's 253 trading days, compared to just 38 days in 2019. Those 110 daily swings include two rallies of more than 9% in March as well as a 12% drop in the same month.

Consumer discretionary, meanwhile, jumped 32.1% this year, boosted by more people shopping online. Amazon shares skyrocketed 76.3% in 2020, while Etsy quadrupled in value. The shift to online spending drove demand for cloud services and computer equipment.

Recapping the moves in the Treasury market, the 2-yr yield decreased one basis point to 0.12%  or -145 bps in 2020 while the 10-yr yield decreased one basis point to 0.92% or -100 bps in 2020. The U.S. Dollar Index increased 0.3% to 89.93. WTI crude futures decreased 0.3%, or $0.12, to $48.27/bbl, down 21.5% in 2020.

Here's to be a better and safer 2021.