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Main U.S. indexes little changed; chips stocks show
strength
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Cons disc weakest S&P 500 sector; real estate leads
gainers
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Euro STOXX 600 index ~flat
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Dollar ~flat; crude, bitcoin lower; gold up
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U.S. 10-Year Treasury yield falls to ~3.93%
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U.S. STOCKS TRY TO FIND FOOTING AS POWELL DAY 2 KICKS OFF (1015 EST/1515 GMT) The main U.S. stock indexes are little changed early on Wednesday after a sharp selloff in the previous session, with investors digesting more comments from Fed Chair Powell, as well as job openings data. Powell is testifying in front of the House Financial Services Committee. Meanwhile, February ADP national employment data, out at 0815 EST, was above estimates, as was January Jolts job openings released at 1000 EST. JOLTS came in at 10.824 million vs a 10.5 million estimate. Nevertheless, the U.S. 10-Year Treasury yield is falling to around 3.93%. Action below 3.9630% puts its six-week streak of higher closes in jeopardy. The S&P 500 index , now around 3,992, is trading shy of its 50-day moving average (DMA), which is now resistance at about 3,998. On the downside, the 100- and 200-DMAs are packed tightly in the 3,939-3,941 area. Here is a snapshot of where markets stood around 1015 EST:
(Terence Gabriel)
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FTSE: CAN IT REACH NEW HIGHS? (0941 EST/1441 GMT) There are not many equity indices hovering near record levels. Among these is the FTSE 100 , which is less than a couple of points below its latest peak hit in February. Question is: has the London benchmark the potential to climb even further?
Caroline Simmons, strategist at UBS Global Wealth Management, is upbeat and her argument is based on the deep valuation discount the FTSE carries relative to global peers. "The UK has a structural discount due to its lower growth-sector exposure," Simmons writes in a note this week. "But so long as growth and inflation are on the rise, equity markets generally gain over time. For now, the UK is outperforming the US equity market, and we expect it to continue to do so," she adds. Her target for the FTSE - which trades at a 20% discount to its own historical valuation and at a 30% discount to global equities - is 8,300 points by December 2023. That's a 4.7% upside from current levels. On top of that there is also a 4% dividend yield, which is enough for UBS to keep the FTSE among its most preferred equity regions in its asset class selection.
(Danilo Masoni)
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VC FUNDING DWINDLES IN FEBRUARY (0915 EST/1415 GMT)
Funding for venture-backed companies globally fell 43%
month-over-month to $18 billion in February 2023, Crunchbase
data showed as recession fears hurt investment appetite.
It's the first time global monthly funding has dropped below $20 billion since February 2020, data showed.
Funding last month tumbled 63% from $48.8 billion a year earlier with late-stage funding down the most, by 73%, while early-stage funding declining 52% year-over-year, Crunchbase said. January saw a boost from $10 billion raised by OpenAI, the startup behind ChatGPT. Corporate fundraising, from early stage venture capital to private equity, fell sharply in 2022 as rising interest rates, inflation and concern over the global economy heightened investor caution.
(Medha Singh)
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DOW INDUSTRIALS: TRADERS WATCH The RANGE (0900 EST/1400 GMT) The Dow Jones Industrial Average was the weakest of the main U.S. indexes on Tuesday, sliding 1.72% after Fed Chair Powell's hawkish testimony in front of the Senate banking committee.
Powell is scheduled for a repeat performance Wednesday in front of the House banking committee. Ahead of this, and in the wake of February ADP national employment which came in above estimates, e-mini Dow futures are just above flat.
Meanwhile, on the charts, the DJI, which closed at 32,856.46 on Tuesday, has ended each of the last 11 sessions inside the range defined by its 50- and 200-day moving averages (DMA):
The 50-DMA, which ended at 33,530 on Tuesday, is resistance, while the 200-DMA, which finished at 32,379, is support.
The DJI last closed below its 200-DMA on Nov. 9. Subsequently, the moving average successfully contained weakness in mid-December and again in early March. Therefore, traders will be focused on how the DJI behaves in the event it is tested again. A close back above the 50-DMA would look constructive, but the blue-chip average would then have to deal with the resistance line from its January 2022 record high which now resides around 34,000.
(Terence Gabriel)
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FOR WEDNESDAY'S LIVE MARKETS POSTS PRIOR TO 0900 EST/1400 GMT - CLICK HERE <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ DJI03082023 earlytrade03082023 ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Terence Gabriel is a Reuters market analyst. The views expressed are his own)
