Day Traders Diary

4/7/21

The major averages closed virtually unchanged as the S&P 500 eked out a record close up 6 points as minutes from the Federal Reserve's last meeting showed the central bank's commitment to accommodative policy in order to support a full economic recovery. The Dow Jones Industrial Average rose 16 points or 0.05%. The Nasdaq closed down 9 points or 0.07%.

Fed officials indicated at their last meeting that the pace of asset purchases will stay the same for some time while the central bank pursues its economic goals.

The policymakers expected the economy to rebound substantially in 2021 amid the historic economic reopening, and they believe stronger-than-average growth in the following years will continue to facilitate the labor-market recovery.

Shares of reopening plays airlines and cruise lines led the gains, continuing their recent run. Carnival climbed 3.6%, while Royal Caribbean and Norwegian Cruise Line gained more than 2% each. Shares of United Airlines rose about 1%.

Bond yields continued to retreat from recent highs. The 10-year Treasury yield dipped to 1.65%, its lowest level since March 26. Rising yields had spooked investors recently, sparking a rotation out of growth and into value-oriented areas of the market.

JPMorgan Chase CEO Jamie Dimon was optimistic about the U.S. economic comeback from the pandemic in his widely read annual letter released on Wednesday.

"I have little doubt that with excess savings, new stimulus savings, huge deficit spending, more QE, a new potential infrastructure bill, a successful vaccine and euphoria around the end of the pandemic, the U.S. economy will likely boom," Dimon said in the letter. "This boom could easily run into 2023 because all the spending could extend well into 2023."

President Joe Biden recently unveiled details of his $2 trillion infrastructure plan that includes a corporate tax rate hike to 28%. He said Wednesday that he is willing to negotiate on the proposed tax increase.

Strong economic data — including March's jobs report that handily beat expectations — has fueled stocks' ascent in recent sessions. All three major averages are coming off their fourth straight quarter of gains as the economic recovery from Covid-19 accelerates.