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U.S. equity index futures erase losses, now green
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Euro STOXX 600 index up ~0.4%
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Dollar, gold, crude decline; bitcoin up >5%
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U.S. 10-Year Treasury yield rises to ~3.44%
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U.S. STOCK FUTURES "SPRING" OFF PREMARKET LOWS (0900 EDT/1300 GMT) It has been said that history doesn't repeat itself, but it often rhymes.
In this regard, it hasn't been lost on traders that last Thursday's big-bank lifeline to First Republic came 15 years to the day that Bear Stearns was sold to JP Morgan. And in another coincidence, traders also note that the last name of Credit Suisse's chairman is Lehmann. Not exactly Lehman, but pretty darn close. In any event, the shadow of the bear continues to loom large, especially given the recent banking sector turmoil. From its February 2 high to its March 13 low, the S&P 500 index lost about 9%. It has since clawed its way off the low, but ended Friday still down just over 6% from the early-February high. That said, with the arrival of the spring equinox in the Northern Hemisphere this week, traders will be watching closely to see if the veil of darkness lifts, or if a flurry of darker days lies ahead. Proponents of Gann Theory, or methods of technical analysis developed by W.D. Gann, as well as other traders with an astro-focus, may look for either an acceleration of the prevailing trend, or a reversal, around the summer and winter solstices, as well as the fall and spring equinoxes. Just looking back over the past five years or so, a number of major reversals in the S&P 500 have developed around these potential turn dates:
The 2023 spring equinox occurs on Monday, March 20 at 5:24 PM EDT. Thus, it remains to be seen if last Monday's low came under the equinox's orb of influence, and the SPX will continue to recover, or if instead, volatility will only increase and potentially lead to fresh lows, or indeed, a sustained downside slide. Action over the next week or so may provide clarity. So far, the SPX has held the 3,815-3,810 support zone on a closing basis. Last Monday, it fell to 3,808.86 before snapping back. Early on Monday, the futures slid about 1.3% as steps taken by central banks to boost liquidity and a deal to rescue Credit Suisse failed to quell investor worries of severe turbulence in the banking sector. However, the futures have since reversed, and are now in positive territory.
(Terence Gabriel)
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(Terence Gabriel is a Reuters market analyst. The views
expressed are his own)
