Day Traders Diary

6/6/22

The major averages moved slightly higher on Monday as Wall Street tried to rebound from a losing week and navigated a jump in Treasury yields. The tech-heavy Nasdaq Composite rose 48 points or 0.4%, while the S&P 500 gained 0.3%. The Dow Jones Industrial Average perked up 16 points. The Dow was up more than 300 points earlier in the session, but the market gave up some of its gains as the day progressed and the 10-year Treasury yield pushed above 3%.

Investor sentiment got a boost after Beijing rolled back some Covid-related restrictions. Meanwhile, The Wall Street Journal reported that Chinese regulators are wrapping up their investigations into ride-hailing giant Didi — potentially signaling that the country's crackdown on its tech sector may be coming to an end.

Overseas, stocks rose more than 1% in China and over 2% in Hong Kong. The U.S.-traded shares of Didi jumped more than 30%, while JD.com and Pinduoduo each added more than 6%.

The developments in China could encourage investors about the prospects for the U.S. and European economies as well.

The China news appeared to boost casino stocks, with shares of Wynn Resorts gaining 2.5%. Solar stocks moved higher after the Biden administration moved to suspend tariffs on solar panel products from four countries, with Enphase Energy gaining more than 6%.

Elsewhere, shares of Amazon rose nearly 2% following a 20-for-1 stock split. Amgen and Salesforce each dropped more than 1%, weighing on the Dow.

Investors have been grappling with fears that the central bank could raise interest rates too fast and too much, causing a recession. Recent statements from the policy-setting Fed members indicate that 50 basis point — or a half-percentage-point — rate increases are likely at the June and July meetings.

The 10-year Treasury yield hit its highest level in nearly a month as investors sold bonds. Though the move appeared to knock stocks off their highs, it did not cause a major decline in equities like similar moves did earlier this year.

Investors will be focused on the consumer price index reading for May, which is slated for Friday morning release. The key inflation gauge is expected to be just slightly cooler than April, which could be interpreted by some as a confirmation that inflation has peaked.

The U.S. economy added 390,000 jobs in May, the Labor Department said Friday, which came in better than expected despite fears of an economic slowdown and amid the roaring pace of inflation. Some investors believe the strong hiring data could be clearing the way for the Fed to remain aggressive.

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.