Day Traders Diary

8/5/24

The major averages tumbled following a sharp sell off on Friday as worries of a recession following the latest economic numbers concerning investors. The Dow dropped 1,033 points, or 2.6%, to end at 38,703. The S&P 500 fell 160 points or 3% while the Nasdaq Composite lost 576 points or 3.43%.

Our markets weren't the only markets to sell off. The Japan's stock market posted its worst drop since Wall Street's Black Monday in 1987, contributing to fears of global turmoil in the markets.

Fears of a U.S. recession were the main culprit for the global market meltdown after Friday's disappointing July jobs report. Investors are also concerned that the Federal Reserve is behind in cutting interest rates to bolster an economic slowdown, with the central bank choosing instead to keep rates at the highest in two decades last week.

With the equity markets down, the bond markets are perking up. The 10-year Treasury yield fell on Monday as investors' concerns on the economic outlook rose amid a global stock market-selloff. The yield on the 10-year Treasury fell 3 basis points to 3.765%, its lowest level since June 2023. The 2-year Treasury yield was marginally higher at 3.875%.

Mortgage rates are also coming down. The 30-year fixed-rate mortgage fell to 6.125% earlier today or 0.250 percentage points lower than on Friday. The 15-year fixed-rate mortgage is 5.490%, which is 0.135 percentage points lower than on Friday.