Day Traders Diary

4/2/24

The major averages fell for a second straight day to start the new quarter as commodity prices and bond yields moved higher as Federal Reserve rate cuts get pushed off into the second half of the year. The Dow Jones fell 396 points, or 1%. The S&P 500 fell 37 points or 0.72% while the Nasdaq Composite fell 156 points or 1.8%.

Bonds were a large part of the equity weakness. The rate on the 10-year Treasury yield rose to 4.359%, its highest level since Nov. 28 when it touched 4.4%. The 2 year Treasury is yielding 4.697%.

Interest rates are still reacting to the core personal consumption expenditures price index that came out last Friday which showed a 2.8% annual increase, well above the Fed's 2% inflation target.

In the equity space, health insurers took it on the chin. UnitedHealth Group, Humana and  CVS were all down 6% after the Centers for Medicare & Medicaid Services finalized the 2025 rate announcement for Medicare Advantage and prescription drug coverage which could cause higher payments to seniors later in the year.

Tech is not doing much better. Tesla fell 5% on disappointing first quarter deliveries. All the AI stocks and chip stocks are lower as well.

The S&P 500 is coming off a 10% gain for the first quarter, its best start to a year since 2019.