Day Traders Diary

10/11/21

The volatility continues as the major averages pulled back after rallying sharply after the open. Investors took profits during the day due in part to surging oil prices, economic worries and major third-quarter earnings results coming out over the coming weeks.

The Dow Jones Industrial Average shed 250 points, or 0.7%. The blue-chip average was up more than 200 points at its intraday high. The S&P 500 ticked down 30 points or 0.7%. The Nasdaq Composite traded down 93 points or 0.6%.

The U.S. bond market was closed Monday for Columbus Day.

U.S. oil benchmark WTI crude oil topped $82 a barrel at its session highs before trading around $80 Monday. The surging prices added to looming concerns about inflation.

Energy stocks gained for most of the session as oil prices jumped, but also rolled over with the broader market into the close.

Meanwhile, Goldman on Monday cut its U.S. economic growth forecast. The firm lowered its 2022 growth estimate to 4% from 4.4% and took its 2021 estimate down a tick to 5.6% from 5.7%. The firm cited the expiration of fiscal support from Congress and a slower-than-expected recovery in consumer spending, specifically services.

This week, major banks will kick off their third-quarter earnings reports. JPMorgan posts results Wednesday, with Goldman Sachs, Bank of America, Morgan Stanley, Wells Fargo and Citigroup following later in the week. Delta Airlines and Walgreens Boots Alliance reports are also on deck.

Investors will be looking for insights into supply chain challenges, particularly going into the holiday shopping season.

Analysts estimate an earnings growth rate of 27.6% for the S&P 500 in the third quarter, which would be the third-highest growth rate since 2010.

After a 4.8% loss in September, the S&P 500 is up more than 1% for the month of October and sits more than 3% from its record.

 

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.