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Main U.S. indexes edge red ahead of Fed 2 PM EDT
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Real estate weakest S&P 500 sector; tech leads gainers
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Euro STOXX 600 index up ~0.3%
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Dollar ~flat; gold up slightly, crude dips; bitcoin gains
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U.S. 10-Year Treasury yield ~flat at ~3.61%
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SITTING TIGHT (1001 EDT/1401 GMT)
Major U.S. averages are holding close to the unchanged
mark in the early stages of trading on Wednesday, after notching
their first back-to-back winning sessions since March 2-3, as
investors gird for the Fed policy announcement and subsequent
press conference from Chair Jerome Powell.
Expectations for a 25 basis point hike from the central bank stand at about 85%, with a roughly 15% chance of no hike, according to CME's
Fedwatch Tool. The market had been steadily climbing toward anticipating a 50 basis point hike before concerns about regional banks as well as the broader banking sector dampened expectations for a more aggressive Fed, with expectations rapidly changing with the ebb and flow of bank concerns.
The 11 S&P sectors are skewed mostly negative, with only three in positive territory, led by technology , while real estate is the primarily laggard with a decline of more than 1.5%.
The S&P 500 is also sitting just below its 50-day moving average just shy of 4,015, a resistance level it has not climbed above since March 9.
Below is your market snapshot:
(Chuck Mikolajczak)
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SWISS FRANC KEEPS SAFE-HAVEN STATUS (0932 EDT/1332 GMT) The turmoil in the Swiss banking sector, which culminated in a regulator-orchestrated Credit Suisse takeover deal by UBS this weekend, has raised some speculation the Swiss franc would lose its safe-haven status.
Analysts at Barclays said this is very unlikely.
"CHF 'safe haven' de-classification requires radical shifts in Switzerland's balance sheet via 'safe asset' outflows. This is unlikely in the near term and doubtful in the long term."
They added that an expected 50 basis point rate hike by the Swiss National Bank on Thursday and further FX interventions should allow recent resilience to extend. The Swiss franc is up around 2% this month against the dollar.
(Joice Alves)
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EUROPEAN PROPERTY: EQUITY RAISES COMING? (0926 EDT/1326 GMT) As markets look to have found some footing after banking stress caused wild gyrations this month, pressure on European real estate stocks shows no sign of abating with tightening financial conditions looking set to weigh further. The STOXX Europe 600 real estate index is down more 3.3% to its lowest level in five months, while battered banks are extending their bounce, helping the broader STOXX 600 equity benchmark edge slightly higher. So what is the outlook for European property? Morgan Stanley is downbeat and flags rising risks that executives at real estate companies in continental Europe may have to tap shareholders to beef up their finances. "We think risks are rising that companies will have to issue equity," write MS analysts led by Bart Gysens. "The continental universe is dominated by stocks for which yields screen too low, rents could be vulnerable, or a combination, and more often than not financed with too much debt, evidenced by myriad balance sheet repair initiatives," they say "EPS generation is under attack from an inevitable rise in debt costs, while upward pressure on asset yields drives deleveraging, which erodes EPS further," they add. Eleven of the top twelve STOXX losers are real estate stocks. Germany's Aroundtown is the biggest decliner, last down 9.2%.
(Danilo Masoni)
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S&P 500 INDEX: TRADERS LOOK TO BE FED SOME CLARITY (0900 EST/1300 GMT) Going into the conclusion of the a much anticipated FOMC meeting with the release of the latest policy statement at 2:00 PM EDT Wednesday, followed by Fed-Chair Powell's press conference at 2:30 PM EDT, e-mini S&P 500 futures are edging red. Meanwhile, traders are keenly focused on S&P 500 index chart levels:
The SPX ended Tuesday higher for a second-straight session, closing at 4,002.87. That said, with an intraday high of 4,009.08, the benchmark index stalled just a little more than 3 points from its rising 50-day moving average (DMA), which ended at 4,012.61.
The 50-DMA should ascend to just shy of 4,015 on Wednesday, which will roughly coincide with the March 9 high at 4,017.81. The short-term trendline from the February 2 high, which should be around 4,047, and the March 6 high, which was at 4,078.49. Additional resistance is at the line from the January 2022 record high, which is now around 4,120. The February 2 high was at 4,195.44 and the 23.6% Fibonacci retracement of the March 2020-Janaury 2022 advance is at 4,198.70.
On the downside, Tuesday's opening gap requires a fall to
3,956.62 for a fill, and the 200-DMA should be around 3,934. The
38.2% Fibonacci retracement of the March 2020-January 2022
advance is at 3,815.20. The May 2022 and March 2023 troughs were
at 3,810.32 and 3,808.86.
It now remains to be seen if the results of Wednesday's Fed
events provide enough impetus to ultimately resolve the S&P
500's multi-month trading range essentially defined by the 23.6%
and 38.2% Fibonacci retracements of the March 2020-January 2022
advance.
(Terence Gabriel)
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FOR WEDNESDAY'S LIVE MARKETS POSTS PRIOR TO 0900 EDT/1300 GMT - CLICK HERE
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(Terence Gabriel is a Reuters market analyst. The views
expressed are his own)
