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Main U.S. indexes modestly lower: S&P 500 off ~0.5%
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Feb NAHB housing market index 42 vs 37 estimate
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Euro STOXX 600 index up ~0.3%
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Dollar up; gold, crude fall; bitcoin gains >2%
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U.S. 10-Year Treasury yield edges up to ~3.77%
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U.S. STOCKS RED AFTER RETAIL SALES (1005 EST/1505 GMT)
Wall Street's main stock indexes are lower early on Wednesday after stronger-than-expected retail sales data underscored a resilient U.S. economy, which could offer more room for the Federal Reserve to raise interest rates. All S&P 500 sectors are down with energy taking the biggest hit by far, down more than 2%. Crude futures are off 1%.
Most other sector changes, however, are relatively muted. Utilities are now just below flat. In a note Wednesday morning, Art Hogan, chief market strategist at B Riley Wealth wrote, "We assume that inflation will look better in the second half. Core PCE, the inflation measure the Federal Reserve looks at, could be 3% or a bit lower by the end of the year, which suggests that the Fed will need to be less aggressive."
Hogan added "While we envision more choppiness in markets in
the first quarter, we see markets settling into a slow grind
higher after that."
Here is a snapshot of where markets stood a little over 30
minutes into the trading day:
(Terence Gabriel)
*****
BITCOIN BACK ON TRACK AFTER FALSE BREAK? (0900 EST/1400 GMT)
Recently battered bitcoin is trying to make a quick
come back. And if last week's downside range resolution proves
to be a false break, it may signal another risk-on charge.
From its Feb. 2 high, BTC plunged about 12% into its low on
Monday:
With this, the Nasdaq Composite , which also topped
on Feb. 2, lost more than 5% over its next six trading days.
BTC's recent decline included a sharp slide last Wednesday
to Friday. Just prior to this, bitcoin's daily Bollinger Band
(BB) width, a historical volatility measure, had once again
become especially compressed suggesting a market ripe for much
more spirited action, or indeed, its next trend.
Given BTC's breakdown, BB width popped. However, unlike with
several sharp BTC slides in the spring and summer of last year,
or its explosive advance earlier this year, the measure's rise
proved surprisingly stunted.
A stunted BB width rise occurred in fall 2022 with a BTC
upside breakout. Bitcoin's bigger move then occurred after
reversing back below its 20-day moving average (DMA).
BTC is now rallying back to challenge its 20-DMA at just
over $22,750. Reclaiming and holding above this swing level can
tilt back toward the potential for a further rise in volatility
to instead accompany an upside run.
Such a turn could be good news for stock bulls given that
bitcoin's rolling 50-day correlation with the IXIC is a robust
0.89 (1.00 is a perfect positive correlation).
(Terence Gabriel)
*****
FOR WEDNESDAY'S LIVE MARKETS' POSTS PRIOR TO 0900 EST/1400
GMT - CLICK HERE
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(Terence Gabriel is a Reuters market analyst. The views
expressed are his own)
