Day Traders Diary

3/31/20

The major averages pulled back to end one of the worst months and quarters in history. The Dow Jones Industrial Average closed down 410 points or 1.8%, at 21,917. The S&P 500 dropped 1.6% to 2,584. The Nasdaq Composite fell nearly 1% to 7,700.

The Dow and S&P 500 had their worst first-quarter performances ever, losing 23.2 and 20%, respectively. The Dow also had its worst overall quarter since 1987 while the S&P 500 had its biggest quarterly loss since 2008. For the month, the Dow and S&P 500 fell 13.7% and 12.5%, respectively. It was their worst one-month declines since 2008. The S&P 500 and Dow also recorded moves of at least 1% in 21 of the 22 trading days this month.

As bad as things were, it could've been worse. The Dow has rallied more than 17% since reaching a low on March 23 while the S&P 500 has gained 15.5% since then. Part of those gains came on Monday, when the Dow jumped nearly 700 points after President Donald Trump extended the timeline for social distancing guidelines to April 30, which many believe will reduce economic damage in the long run.

Goldman Sachs predicts the economy will go through an unprecedented plunge in the second quarter, but the recovery could be the fastest in history.

President Trump is hoping to create a $2 trillion infrastructure bill which would be the fourth part of a stimulus plan. White House officials are looking into a $600 billion relief bill for mortgage markets, the travel industry, and state governments.

Separately, the Fed established a repurchase agreement facility as an alternative source for foreign central banks to temporarily exchange their U.S. Treasury securities for U.S. dollars. This was simply the latest "whatever it takes" action by the Fed to support financial markets.

U.S. Treasuries had a relatively quiet day, ultimately closing mixed and little changed. The 2-yr yield declined one basis point to 0.20%, while the 10-yr yield increased three basis points to 0.70%. The U.S. Dollar Index declined 0.2% to 98.99. WTI crude increased 1.5% to $20.52/bbl, although it was up more than 8% in the session.