Day Traders Diary

3/30/22

The major averages ended a winning streak for the market, as investors monitored developments in Ukraine and the bond market. The S&P 500 fell 29 points or 0.6%. The Nasdaq Composite lost 65 points or 1.2% while the Dow Jones Industrial Average dropped 65 points, or 0.2%. The Dow and S&P 500 each snapped a four-day streak of gains.

Crude prices, which have soared since the war in Ukraine began, climbed more than 3% to top $107 per barrel on Wednesday. Germany warned of potential rationing of natural gas due to disputes with Russia, and U.S. crude stockpiles fell.

The energy market swings appeared to drive action in equities on Wednesday. Oil stocks moved higher, with Valero rising more than 4% and Phillips 66 gaining about 3%.

Liz Ann Sonders, chief investment strategist at Charles Schwab, said the higher oil prices could be a bearish signal for the overall market even while it boosts energy stocks.

Several retail stocks were under pressure on Wednesday after disappointing quarterly reports, including Five Below losing 6% and Chewy sliding more than 17%. RH fell 12% after the company's fourth-quarter revenue came in short of expectations. On the positive side, apparel stock Lululemon jumped 10% after issuing upbeat guidance and announcing a share buyback program.

Semiconductor stocks were another weak spot for the market, with Marvell Technology falling 3% and Nvidia shedding more than 2%. Micron fell over 3% despite a stronger-than-expected earnings report.

Elsewhere, shares of Apple, which have risen for 11 consecutive sessions, were down less than 1%. Shares of Procter & Gamble dipped 1.3% following a downgrade from JP Morgan.

Investors also kept an eye on the bond market as the U.S. 5-year and 30-year Treasury yields inverted Monday for the first time since 2016 and the spread between the 2-year and the 10-year rate came close to inverting on Tuesday. Yield curve inversions are seen by some traders and economists as a recession indicator.

On Wednesday, the spread between the 2-year and 10-year held near 3 basis points, but regional bank stocks were under pressures. Shares of Zions Bancorp fell more than 4%, and Bank of New York Mellon shed 2.2%.

Wall Street is coming off strong two week stretch, with the S&P 500 up roughly 10% since mid-March.

However, many investment professionals are reluctant to call for the all-clear on a market rebound.

Wednesday was also a busy day of economic data. The ADP payrolls report said private firms added 455,000 jobs in March. Economists surveyed by Dow Jones were expected 450,000.

The release came ahead of the March jobs report from the Labor Department, due out Friday.

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