Day Traders Diary

3/29/21

The major averages closed mixed amid weakness in bank stocks caught in the downdraft of Friday's margin call, as investors assessed the ripple effect from the forced block trades. The Dow Jones Industrial Average erased a 160-point loss and turned higher, closing up 98 points or 0.3% at 33,171. The S&P 500 finished down 3 points after falling as much as 0.8% earlier. The Nasdaq Composite slipped 79 points or 0.6%.

Shares of ViacomCBS and Discovery swung between losses and gains after intense selling pressure last week. The two companies were believed to be hit by forced liquidation of positions held by the multibillion dollar family office Archegos Capital Management, a source familiar with the situation told CNBC.

Discovery gained about 2%, while ViacomCBS dropped more than 5%. The two companies had lost 27% apiece during Friday's selloff.

Elsewhere, Boeing was up 3% on news that Southwest Airlines had added 100 orders for the airliner's 737 Max jet. The first 30 jets are scheduled for delivery in 2022.

Credit Suisse shares tumbled 13% as the bank warned it would face a "significant" hit to its first-quarter results due to the bank having to exit hedge fund positions related to the forced selling. Nomura also warned that it could get hit, sending its shares down nearly 15%.

Bank stocks weighed on the Dow industrials, with Goldman Sachs down more than 3% and JPMorgan Chase off 1.4%. The weakness came as government bond yields edged lower to start the week.

Though the market was taking a hit from the Archegos stumble, the situation is unlikely to have lasting impacts on the broader market, according to Bespoke Investment Group.

On Friday, all three major benchmarks rallied to their session highs into the close with the blue-chip Dow closing about 450 points higher. The S&P 500 eventually climbed 1.7% to hit a record closing high. The Nasdaq Composite wiped out a 0.8% loss and ended Friday 1.2% higher.

Traders are bracing for heightened volatility during this holiday-shortened week with quarter-end rebalancing among pension funds and other big investors. The recent swift advance in bond yields could set up money managers for big adjustments in their portfolios.

The Dow and the S&P 500 have risen 6.9% and 4.3%, respectively, so far in March. The tech-heavy Nasdaq, however, has dipped 0.4% this month as some investors jumped high-flying technology names amid rising yields.