Day Traders Diary

1/8/21

The major averages closed at record highs on Friday to end the first trading week of the year as traders weighed the prospects of new fiscal aid as well as disappointing U.S. jobs data. The Dow Jones Industrial Average ended the day up 56 points, or 0.2%, at 31,097. The S&P 500 rose 0.6% to 3,824 while the Nasdaq Composite popped 1% to 13,201. Both the Dow and S&P 500 posted four-day winning streaks.

Coca-Cola rose 2.2% to lead the Dow higher. The consumer discretionary and real estate sectors each rose more than 1%, lifting the S&P 500. The Nasdaq got a boost from Tesla, which popped 7.8%.

Stocks hit their session lows around 1:40 p.m. ET — with the Dow briefly falling more than 200 points — after Democratic Sen. Joe Manchin told The Washington Post he would "absolutely not" support a round of $2,000 stimulus checks. President-elect Joe Biden had promised to pass a measure for bigger stimulus checks if Democrats secured a Senate majority, which they did earlier this week.

Manchin's office then clarified that Manchin was undecided on any future stimulus proposal and was not outright opposed to an aid check of $2,000 for Americans, CNBC's Kayla Tausche reported. The major averages bounced off their lows on the comments out of Manchin's office.

For the week, the Dow and S&P 500 each gained more than 1%, while the Nasdaq advanced 2.4%. Those weekly gains come despite the turmoil in Washington, where a riot at the Capitol on Wednesday delayed the procedural congressional confirmation of Biden's victory.

Stocks started off the new year with a slump on Monday, but the market churned higher as expectations of more government aid increased with Democrats winning two key Senate races in Georgia, according to NBC News projections.

The U.S. economy lost 140,000 jobs in December, the Labor Department said. Economists polled by Dow Jones expected a gain of 50,000. The unexpected drop in employment came as the recent surge in Covid-19 cases across the country has forced state and local governments to re-take stricter measures to mitigate the outbreak. More than 21.5 million coronavirus cases have now been confirmed in the U.S.

President-elect Biden said he will propose a complete economic package next week that will include a range of issues and said the "price tag will be high."

Longer-dated Treasuries continued to face selling pressure amid expectations for economic growth and possibly inflation. The 10-yr yield increased another three basis points to 1.11%, while the 2-yr yield decreased one basis point to 0.13%. The U.S. Dollar Index increased 0.3% to 90.06. WTI crude futures increased 2.8%, or $1.44, to $52.25/bbl.