Day Traders Diary

3/19/20

The major averages are lower, but at least they are not down limit as the coronavirus crisis progresses. The Dow Jones Industrial Average is set to open down 400 points. The S&P 500 and Nasdaq are set to open lower as well.

Higher-than-expected jobless claims data also pressured investor sentiment. Last week, 281,000 people filed for unemployment benefits in the U.S., well above a Dow Jones estimate of 220,000.

The Dow dropped 1,338.46 points, or 6.3%, on Wednesday and clinched its first close below 20,000 since February 2017. The Dow was down more than 2,300 points at the lows of the session. The S&P 500 dropped 5.2% to 2,398.10 and closed nearly 30% below a record set last month as both indexes sank further into bear markets.

Last night, the Federal Reserve Board broadened its program of support for the flow of credit to households and businesses by establishing a Money Market Mutual Fund Liquidity Facility. The European Central Bank announced a €750 billion emergency bond-buying program, and the Bank of Japan announced a ¥1.3 trillion special bond-buying operation.

Central banks have been extremely active with stimulus efforts needed to shore up confidence for financial markets, which have been under intense strain given the global shutdowns taking place outside China. Congress, meanwhile, continues to debate the Trump administration's $1 trillion stimulus plan that could restore some confidence for the consumer.

U.S. Treasuries, particularly longer-dated maturities, have regained some buying interest after days of selling interest. The 2-yr yield is down two basis points to 0.52%, and the 10-yr yield is down 15 basis points to 1.12%. The U.S. Dollar Index is up 1.0% to 102.18. WTI crude is up 9.7%, or $1.96, to $22.33/bbl after falling 24% yesterday.