Day Traders Diary
The major averages are set to rally led by tech stocks after bond yields declined following encouraging comments from billionaire, David Tepper. The Dow Jones Industrial Average is set to rally 70 points or 0.24%. The S&P 500 is up 35 points or 0.9% while the Nasdaq is jumping 284 points or 2.3%. Tesla shares popped 5% in premarket trading, while Apple, Amazon, Microsoft, Netflix and Alphabet all gained at least 2%.
Technology shares are set to rebound from sharp losses as bond yields stabilized. The 10-year Treasury yield fell more than 6 basis points to 1.52%. It traded as high as 1.62% on Monday.
On Monday, the Dow rallied more than 300 points on investor optimism about the economic comeback from the pandemic. Yet tech shares didn't participate on Monday, with the Nasdaq Composite shedding 2% as a rapid rise in rates caused investors to rotate out of pricey tech shares. The tech benchmark closed more than 10% below its Feb.12 closing high, falling into correction territory.
High-growth names have been pressured lately as rising rates make their future profits less valuable today, compressing the stocks' lofty valuations. Hedge fund manager David Tepper said on Monday the recent sharp rise in rates is likely over and it's hard to be bearish on stocks right now. Tepper noted names like Amazon were starting to look attractive.
Over the weekend, the Senate passed a $1.9 trillion economic relief and stimulus bill, which is set to include another round of stimulus checks. President Joe Biden is expected to sign the bill into law by March 14.
The stimulus news prompted investors to rotate into reopening plays and cyclical stocks to bet on a sharp economic rebound. Banks, airlines, cruise lines and retailers led the gains on Monday.
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