Market Talk – Monday, April 2

Many expected a quiet session for markets today given the Easter holidays, but the reaction to US/China trade tensions over the weekend has ruffled a few US Traders! Having seen the Q1 closing rally last week, we are back to pressure and the tech sector taking the hit yet again. The major contributors to the weakness came from Amazon, Microsoft, Intel etc. which saw the Nasdaq lead the declines lower. At its worst, all core were over 3% lower but towards the close saw a much needed bounced over 1%. The VIX has rallied over 25% and was last seen trading 24.65.

Interesting that even with the major stock declines, the Treasury market has reacted only slightly. 10yr Notes were only 1bp lower and even 2’s were only 2bp lower (higher price). Gold has found buyers (+1.25%) but still remains below recent highs and not yet taken out the Reversal above. US Dollars have based well against all majors recently and remain bid within this stock decline. Obviously, is only the first day of Q2 and so plenty to play for but is where we left Q1 with volatility and light volume hoping to set the lows early for the quarter.