*
U.S. equity index futures red: Nasdaq down most at ~0.5%
*
Sectors: tech is only gainer, comms services biggest loser
*
Euro STOXX 600 index up ~0.6%
*
Dollar up; gold down; bitcoin falls; crude up
*
U.S. 10-Year Treasury yield edges up to ~3.68%
Welcome to the home for real-time coverage of markets brought to
you by Reuters reporters. You can share your thoughts with us at
WALL STREET IS RED WITH EYES ON FED, EARNINGS (1017 EST/1517
GMT)
Wall Street's major indexes opened in the red on Wednesday
but pared losses in the first half hour of trading as investors
took some profits after Tuesday's rally and worried about
earnings while they were encouraged by a less hawkish tone from
Federal Reserve chair Jerome Powell on Wednesday.
Also in the mix was investor excitement over Tuesday's product announcement from Microsoft , which was last up 2%, helping the technology sector along with moves in U.S. Treasury yields and the dollar.
"Stocks are off their lows because Treasury yields have come down a bit and the dollar weakened on expectations the Fed will not be as hawkish as people feared before," said Gene Goldman, chief investment officer at Cetera Investment Management in El Segundo, CA. Goldman also described fourth quarter earnings reports so far as "kind of lackluster at best" and said estimates for 2023 need to be revised further down due to "rising interest rates and still stubborn inflation which will lead to a decline in profit margins and weaker sales volumes." Chipotle Mexican Grill late on Tuesday reported quarterly comparable sales and profit that missed expectations as customers pulled back on expensive delivery orders and traffic stalled in December. The stock was last down 3%. Here is a snapshot of the market from 1008 GMT:
(Sinéad Carew)
*****
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 Wall Street red ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
(Terence Gabriel is a Reuters market analyst. The views
expressed are his own)
