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Main U.S. indexes red, but off lows
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U.S. March S&P Global Flash mnfg and svcs PMIs > estimates
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Euro STOXX 600 index down ~1.5%
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Dollar rallies; gold slips; crude, bitcoin lower
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U.S. 10-Year Treasury yield dips to ~3.37%
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U.S. STOCKS FALL WITH BANKS ON THE BACK FOOT (1001 EDT/1401 GMT) Wall Street's main indexes are lower on Friday as concerns over the banking sector's health sapped the appetite for financial stocks. Indeed, sharp losses in European bank stocks cast a pall over premarket trading, which has carried over into the regular U.S. trading hours. U.S. shares of Deutsche Bank are off more than 6% after the bank's credit default swaps rose to a four-year high. With this, U.S. bank indexes are once again under pressure. The KBW regional bank index is seeing fresh lows back to December 2020, while the S&P 500 banks index has hit its lowest levels since November 2020. Of note, however, the main U.S. indexes have come up off their very early session lows. Here is a snapshot of where markets stood a little more than 30 minutes into the trading day:
(Terence Gabriel)
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U.S. 10-YEAR TREASURY YIELD HITS A 6-MONTH LOW (0900
EDT/1300 GMT)
U.S. equity index futures are lower on Friday as lingering
concerns over the banking sector's health steered investors away
from financial stocks despite reassurances from authorities.
With this, the U.S. 10-Year Treasury yield has
fallen to a six-month low:
The yield hit a low of 3.2850%, taking out its 3.3210% January trough.
If it ends Friday below 3.3970%, it will score a third-straight weekly loss. And if it ends below roughly 3.50%, it will register its second-straight weekly close below its 40-week moving average. Meanwhile, the yield is on pace for its first quarterly decline since December 2021. Once again, the yield's fortunes turned sour after another significant weekly winning streak came to an end. After spiking to as high as 4.0910% in early March, the yield ended a six-week run of gains. Of note, since the yield's March 2020 record-low, once concluded, pronounced weekly winning streaks have marked some significant highs. This was the case with an eight-week win streak which ended on March 19, 2021, a seven-week run of gains that ended on Oct. 8, 2021, and a 12-week win streak that ended on Oct. 21, 2022. In any event, the yield is now flirting with the support line from December 2021, which now resides around 3.30% on a weekly basis. Ending below this line can suggest potential for a much deeper decline.
Weekly Gann Lines will offer the next support around 3.09% and 2.93% next week. The August 2022 trough was at 2.5160%. The yield will now need to hold the weekly support line, and then reclaim resistance in the 3.46%-3.56% area to suggest pressure is coming off the downside.
(Terence Gabriel)
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(Terence Gabriel is a Reuters market analyst. The views
expressed are his own)
