Day Traders Diary



The S&P 500 gained 0.6% on a subdued Monday, as investors remained cautious ahead the U.S. congressional midterms elections on Tuesday. Technology stocks largely underperformed, but a strong showing from financial companies helped offset tech losses.

Meanwhile, the tech-sensitive Nasdaq Composite lost 0.4%, though finished well off its session lows, the Dow Jones Industrial Average gained 0.8%, and the Russell 2000 was unchanged.

The S&P 500 opened flat but ticked higher throughout the day, especially in the last couple hours of trading. Nevertheless, weakness from the consumer discretionary (-0.2%), information technology (-0.2%), and communication services (-0.3%) sectors kept gains in check.

Apple (AAPL 201.59, -5.89, -2.8%) resumed its post-earnings Friday decline after a report from Japan's Nikkei Asian Review corroborated fears over the company reaching peak iPhone sales. The newspaper indicated that Apple decided to cancel a production increase in its newest low-end iPhone XR; however, the Nikkei also said that demand for the older generation iPhone 8 and iPhone 8 Plus has been higher than expected.

Also, U.S. President Trump said in an interview with Axios that his administration is looking into antitrust violations by Facebook (FB 148.68, -1.67, -1.1%), Alphabet (GOOG 1040.49, -17.70, -1.7%), and Amazon (AMZN 1627.80, -37.73, -2.3%). Likewise, Facebook and Alphabet weighed on the communication sector, while Amazon dragged on the consumer discretionary sector. Of note, a WSJ report stated that Amazon has decided to split its second headquarters into two locations, as its sources stated the decision was rooted in allowing the company to recruit enough tech talent.

Conversely, leadership from the financials sector (+1.4%) helped underpin Monday's advance. Heavily-weighted Berkshire Hathaway (BRK.B 216.24, +9.67) climbed 4.7% after the conglomerate holding company nearly doubled its Q3 operating earnings to $6.88 billion from $3.44 billion in the same quarter last year. 

Other top-performing sectors on Monday were real estate (+1.7%), energy (+1.6%), utilities (+1.4%), and consumer staples (+1.2%). 

Elsewhere, U.S. energy and financial sanctions on Iran were officially reimposed at midnight, though the U.S. issued temporary waivers to eight countries on Monday. The waivers are meant to provide the countries time to seek alternatives to Iranian oil and help prevent oil prices from de-stabilizing. WTI crude fell 1.0% to $63.12/bbl.

In China, President Xi reiterated his plans to continue to open China's markets to the world in a keynote speech at the China International Import Expo in Shanghai.

Reviewing Monday's only piece of economic data, the ISM Non-Manufacturing Index for October:

  • The ISM Non-Manufacturing Index for October checked in at 60.3% ( consensus 58.8%). That was down slightly from 61.6% in September, which was the highest reading for the composite index since its inception in 2008.
    • The key takeaway from the report is that business activity in the non-manufacturing sector is still strong, as the October deceleration can be interpreted at this juncture as a natural slowing following some solid acceleration since July when the index registered 55.7%.

Looking ahead, investors will receive the JOLTS - Job Openings report on Tuesday.

  • Nasdaq Composite +6.2% YTD
  • Dow Jones Industrial Average +3.0% YTD
  • S&P 500 +2.4% YTD
  • Russell 2000 +0.8% YTD
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