Day Traders Diary

3/1/23

The major averages started the month of March with a whimper with the Dow Jones rising just 5 points while the S&P 500 is down 18 points or 0.47% while the Nasdaq dropped 76 points or 0.66%. Traders are struggling to recover their footing following a losing month while bond yields continued their climb.

The moves came as bond yields extended their February gains, with the benchmark 10-year yield briefly topping 4% for the first time since November. The 1-year Treasury yield rose above 5%.

Minneapolis Federal Reserve President Neel Kashkari said Wednesday that he's "open to the possibility" of a larger interest rate increase at this month's policy meeting, "whether it's 25 or 50 basis points," but hasn't made up his mind yet.

"We are currently in the chop period between central banks winding down interest rate increase cycles and seeing what impact those increases will have on the real economy," said William Northey, senior investment director at U.S. Bank Wealth Management. "Performance for the first two months of the year was primarily influenced by marginal changes in expectations for the appropriate path of monetary policy in 2023."

"We anticipate a better environment for bonds but expect ongoing, two-sided volatility for global equities and U.S. equities as market gauges consumer health and corporate activity," he added.

Stock market sentiment initially got a boost after the release of much stronger-than-expected data out of China. The country's National Bureau of Statistics said its official manufacturing PMI rose to 52.6 in February — a high not seen since April 2012.

The moves come after Wall Street closed out a losing February for stocks on Tuesday. February's slide dragged the Dow into negative territory for the year, while the other two indexes are still holding onto their gains.