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Leigh Baldwin & Co.

112 Albany Street, Cazenovia, NY 13035 | Phone: (315) 655-2964 Toll Free: 1-800-659-8044

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Day Traders Diary

10/18/19

The major averages finished sharply lower weighed down by steep losses in Boeing, Johnson & Johnson and the tech sector. The Dow Jones finished down 255 points, or 0.95% to close at 26,770. Boeing dropped 6.8% — its biggest one-day drop since February 2016 on news that company instant messages suggest the aerospace giant misled regulators over the safety systems of the 737 Max. Dow component, Johnson & Johnson slid 6.2% after the company recalled some baby powder upon finding traces of asbestos. Meanwhile, S&P 500 pulled back 0.4% to end the day at 2,986 while the Nasdaq Composite slid 0.8% to 8,089.

Friday's losses wiped out the Dow's gains for the week. The index closed down 0.2% week to date. The S&P 500 and Nasdaq posted solid gains for the week despite Friday's decline. The S&P 500 rose 0.5% week to date while the Nasdaq gained 0.4% thanks to enthusiasm around the first batch of corporate earnings.

In corporate news, Netflix dropped more than 6% following earnings two days ago. Tech in general performed poorly. Facebook slid 2.2% while Amazon fell 1.6%. Alphabet shares pulled back 0.4%. Coca-Cola rose nearly 2% near all time highs following earnings and encouraging guidance.American Express lost 2% despite beating earnings estimates, but the financials sector rose 0.2%. The defensive-oriented real estate, utilities and consumer staples sectors all finished higher.

Separately, Fed Vice Chair Clarida said monetary policy is not on a preset course and decisions will be made "meeting by meeting." Data from today, and this week, likely boosted expectations for a rate cut at the October FOMC meeting. The probability for a 25-basis points cut rose to 89.3% on Friday versus 67.3% one week ago, according to the CME FedWatch Tool.

U.S. Treasuries ended the session on a higher note. The 2-yr yield declined four basis points to 1.57%, and the 10-yr yield declined one basis point to 1.75%. The U.S. Dollar Index declined 0.4% to 97.27. WTI crude declined 0.2%, or $0.13, to $53.76/bbl.

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