Day Traders Diary

3/30/21

The major averages fell on Tuesday as major technology shares came under pressure again after the 10-year Treasury yield touched its highest level since January 2020. The Dow Jones Industrial Average dipped 104 points, slipping from a record closing high. Apple and Microsoft were biggest losers in the 30-stock Dow, falling more than 1% each. The S&P 500 traded down 12 points or 0.32% led by losses in utilities and technology. The Nasdaq Composite slipped 14 points or 0.11%. The tech-heavy benchmark was down more than 1% at one point.

The 10-year Treasury yield climbed 6 basis points to top 1.77% earlier Tuesday, the highest level in 14 months as vaccine rollouts and expected infrastructure spending boosted expectations of a broad economic recovery and rising inflation. The benchmark rate last traded flat at 1.73%.

Investors digested a reading on consumer confidence that far exceeded expectations. The Conference Board's Consumer Confidence Index surged in March to 109.7, its highest reading in a year. Economists polled by Dow Jones expected the index to rise to 96.8 from 90.4 in February.

Classic reopening plays rallied after the data release. American Airlines jumped 4%, while United Airline popped more than 3%. Carnival, Norwegian Cruise Line and Royal Caribbean all traded at least 3% higher.

The market experienced heightened volatility this week amid the continued fallout after a hedge fund was forced to liquidate its position in several media stocks.

ViacomCBS and Discovery both rebounded after registering heavy losses last week prompted by Archegos Capital Management selling large blocks of stocks late last week. Discovery jumped 9%, while ViacomCBS traded 5% higher.

Wells Fargo jumped more than 3% after the bank said it didn't experience losses related to closing out its exposure to Archegos.

Other bank stocks also staged a comeback. Goldman Sachs climbed 2.2%. JPMorgan and Bank of America rose more than 1% each.

Credit Suisse and Nomura posted heavy losses this week after warning of "significant" hits to first-quarter results following the hedge fund's selling.

Despite the recent volatility, the Dow and S&P 500 are firmly higher for the month, gaining 7.2% and 4.2%, respectively.

President Joe Biden is expected to provide details about his infrastructure plan when he travels to Pittsburgh on Wednesday. The spending package could cost north of $3 trillion.

Evercore envisions the pace of gains slowing, however, with equities already pricing in a reacceleration of growth.

Wild swings could hit the market later this week when pension funds and other big investors conduct their quarter-end rebalancing. The recent jump in bond yields could set up money managers for big moves in their portfolios.