Day Traders Diary

9/27/21

The major averages closed mixed as Treasury yields rose and traders braced for the final week of a volatile September. The S&P 500 slipped 12 points or 0.28% to 4,443 while the Nasdaq Composite shed 77 points or 0.52% to close at 14,969. The Dow Jones Industrial Average rose 71 points to 34,869 as energy stocks and bank shares pushed higher.

The divergence for the major averages came as Treasury yields rose. The 10-year Treasury yield increased on economic optimism and inflation fears, briefly topping 1.5% on Monday. That's the highest since June and up from 1.30% at the end of August.

The economic recovery trade was also supported by stronger-than-expected reading for durable goods orders on Monday.

Major tech stocks including Alphabet, Apple and Nvidia were lower in Monday's session, weighing on the S&P 500 and Nasdaq. Tech stocks are seen as sensitive to rising yields because increased debt costs can hinder their growth and higher rates can make their future cash flows appear less valuable.

But stocks linked to the economic comeback increased as tech shares fell with U.S. Covid cases continuing to roll over.

U.S. cases averaged about 120,000 per day over the last week, according to data compiled by Johns Hopkins University, down from a 7-day average of more than 166,000 cases at the peak of this latest wave in early September. Pfizer CEO Albert Bourla said on Sunday that he thought the U.S. could return to normal "within a year" though annual vaccinations might be needed.

Carnival Corp rose 3.7% and United Airlines added 0.6%. Shares of Boeing jumped 1.3%.

The rise in yields appeared to boost financial stocks on Monday, with the KBW Bank Index climbing 2.9%. Shares of Goldman Sachs and JPMorgan Chase rose more than 2%, making them some of the best performers in the Dow.

Another bright spot for the market was energy, with stocks like Exxon Mobil and Occidental Petroleum climbing as WTI crude continued its September run, topping $75 a barrel. Natural gas prices also rose on Monday as investors monitored concerns of an energy shortage in Europe.

All comments contained herein are for informational purposes only, and should not be considered as a solicitation to buy or sell any security. The firm does not guarantee the accuracy or completeness of the information or make any warranties regarding results from it's usage.