*
U.S. equity index futures modestly red: S&P 500 off ~0.5%
*
Euro STOXX 600 index up ~0.8%
*
Dollar ~flat; gold edges up; bitcoin slips; crude up >1%
*
U.S. 10-Year Treasury yield edges down to ~3.66%
Welcome to the home for real-time coverage of markets brought to
you by Reuters reporters. You can share your thoughts with us at
SEMIS RALLY STILL HAS LEGS, SG SAYS BET ON ASIAN OPTIONS
(0900 EST/1400 GMT)
Semiconductor stocks have rallied sharply this year after a
rough 2022 and Societe Generale (SG), in a note, argues that
there is potential for more upside even as fears of a U.S.
recession continue to haunt investor psychology.
The MSCI's world semiconductor index has bounced 25% since the start of 2023, after falling 37% last year. "If this is indeed a new semiconductor cycle, we should have a long run ahead of us," said Jitesh Kumar, derivatives strategist at Societe Generale.
Easing of U.S. financial conditions (FCs) has been one of the drivers of semi performance, Kumar added, with tighter credit spreads, a weaker dollar and lower equity volatility all contributing to the mix. Semiconductor stocks which are positively correlated with inflation have also benefited from China's credit expansion.
"We believe positioning for some upside exposure via options makes for a sensible strategy given the potential for outsized returns in case a recession is delayed (as we expect)," he said. Asian indexes like the Korea SE Kospi 200 index and the Taiwan Stock Exchange Weighted Index offer better value for upside optionality compared to the Philadelphia SE Semiconductor Index , Kumar said.
Options liquidity also favors Korean markets, he added.
(Bansari Mayur Kamdar)
*****
NASDAQ COMPOSITE: SIX IN THE MIX? (0845 EST/1345 GMT)
The Nasdaq Composite is attempting to rise for a
sixth-straight week. With this, however, it faces a number of
significant resistance hurdles:
The IXIC last rose six-straight weeks in January 2020. The
Composite last gained for seven-straight weeks in November 2019.
The Composite closed Tuesday at 12,113.786, putting nearly
1% above last Friday's finish at 12,006.955.
Despite building bullish internal momentum, the tech-heavy
index does have a number of resistance hurdles to overcome.
Last week the IXIC stalled within decimals of its
mid-September high at 12,270.189. The Composite hit 12,269.555
before backing away.
If the IXIC can overwhelm this barrier it will then face the
38.2% Fibonacci retracement of the March 2020-November 2021
advance which can now act as resistance at 12,552. The
resistance line from the November 2021 record high now comes in
around 12,575 on a weekly basis.
Of note, last week, the Composite did manage its first
weekly finish back above its descending 55-week moving average
(WMA), a Fibonacci-based moving average, since mid-January of
last year. That moving average is now support around 11,965.
However, given its weekly win streak, the IXIC may be
getting stretched to the upside.
More solid support may reside around the 50% retracement of
the March 2020-November 2021 advance at 11,421. The 40- and
200-WMAs are currently packed in tight zone around 11,465 to
11,410.
(Terence Gabriel)
*****
FOR WEDNESDAY'S LIVE MARKETS' POSTS PRIOR TO 0845 EST/1345
GMT - CLICK HERE
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
IXIC02082023 ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
(Terence Gabriel is a Reuters market analyst. The views
expressed are his own)
