Day Traders Diary

7/17/24

The major averages closed mixed with more rotation out of the tech space this time due to concerns of further restrictions on tech trade with China. The Dow Jones Industrial Average rose 243 points led by UnitedHealth Group. The S&P 500 fell 78 points or 1.2% while the Nasdaq got clobbered down 512 points or 2.7%.

Tech took it on the chin after Bloomberg News reported that the Biden administration is considering tougher trade restrictions if companies continue granting China access to U.S.-made technology. Nvidia fell 6%, Broadcom fell 7% while AMD dropped 10%. All the big cap tech stocks were down a percent or more. Chipmaker, ASML fell 12% on earnings.

Outside the tech space, the markets looked much better. The big banks look good once again. US Bancorp was up 4% on earnings. Charles Schwab fell 6% after dropping 9% yesterday following earnings.

In the healthcare space, UnitedHealth Group was up 4% after jumping 6% yesterday on earnings. Roche Holdings was the diamond today jumping 5% as their promising weight loss pill is showing positive results in early stages of a clinical trial. . Patients have lost 6% of their body weight in four weeks with the same side effects of other weight loss drugs like rival Eli Lilly. Eli stock is down 3% on this news.

The recent rotation in the markets comes as traders get more optimistic on rate cuts that should benefit small and mid-cap stocks. The Russell 2000 is lower today, snapping a five-day win streak. But the small cap-focused index has climbed almost 10% over the last five trading days as the market rally broadened out.