Day Traders Diary

1/28/21

The major averages are mixed following a sharp sell-off yesterday, the biggest decline in months. The Dow Jones Industrial Average is set to rise 150 points or 0.53%. The S&P 500 is up 13 points or 0.35% while the Nasdaq is lower by 31 points or 0.24%.

Apple turned in its largest revenue on record at $111.4 billion in its fiscal first-quarter earnings report for fiscal 2021. Sales for every product category rose by double-digit percentage points. Shares of the tech giant, however, dipped 2% in premarket trading.

Tesla dropped about 5% in premarket trading after the electric car maker posted worse-than-expected earnings for the latest quarter. The company also said it expects annual average delivery growth of 50% going forward.

Shares of American Airlines surged more than 40% in premarket trading Thursday after the carrier posted better-than-feared quarterly results. The company, the most-shorted U.S. airline, saw it shares keep ripping higher as hedge funds and other short sellers rushed to buy shares to cut their losses.

Wall Street suffered steep losses on Wednesday, with the S&P 500 and the Dow posting their worst day since October, as the speculative buying frenzy in heavily shorted stocks kept investors on edge. Some fear that hedge funds being squeezed could be forced to reduce their equity holdings to raise cash.

Trading volume exploded amid the retail buying spree in the previous session with 23.7 billion shares changing hands, marking the heaviest trading day since at least 2007. On Wednesday, U.S. equity option volumes hit a record 24.5 billion shares and 57.1 million contracts, according to Piper Sandler.

GameStop was higher again in premarket trading, reversing earlier losses and soaring another 40% as the mania continues. AMC Entertainment was flat.

On the data front, gross domestic product increased at a 4.0% pace in the fourth quarter, slightly below the 4.3% expectation from economists surveyed by Dow Jones.

The number of first-time filers for unemployment benefits rose less than expected last week. Jobless claims totaled 847,000 for the week ended Jan. 23, the Labor Department reported Thursday. Economists polled by Dow Jones had expected first-time claims to total 875,000.

U.S. Treasuries trade near their flat lines. The 2-yr yield is flat at 0.12%, and the 10-yr yield is flat at 1.01%. The U.S. Dollar Index is up 0.1% to 90.75. WTI crude futures are down 0.3% to $52.68/bbl.

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