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DJI edges up, S&P 500 dips, Nasdaq falls nearly 1%
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U.S. Mar ISM N-Mfg PMI 51.2 vs 54.5 estimate
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Euro STOXX 600 index off ~0.2%
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Dollar edges up; gold rises; crude, bitcoin decline
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U.S. 10-Year Treasury yield falls to ~3.27%
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U.S. STOCKS TRIP OVER MORE WEAK DATA (1008 EDT/1408 GMT) Wall Street's main indexes are mixed early on Wednesday after weaker-than-expected private payrolls data for March deepened worries that the rapid interest rate hikes by the Federal Reserve may tip the U.S. economy into a recession. Then at 1000 EDT, the U.S. March ISM Non-Manufacturing PMI came in at 51.2 which was below the 54.5 estimate. The prior reading was 55.1.
According to the CME's FedWatch Tool, markets see a 66% chance that the FOMC will sit on its hands at the May 2-3 meeting and leave its target rate unchanged at 4.75%-5.00%. There is a 34% chance of a 25 basis point increase. Meanwhile, the U.S. 10-Year Treasury yield has come under 3.2850%, putting it at a fresh low back to September of last year. Defensive S&P 500 sectors are showing strength, while chips and FANGs are among weaker groups.
With this, growth's four-day win streak vs value is in jeopardy. Of note, despite an early red tide, there appears to be some indecision under the surface. As stands, the number of unchanged NYSE stocks as a percentage of issues traded is 9%, or its highest level since the NYSE switched to decimal trading in January 2001. Here is a snapshot of where markets stood at 1012 EDT:
(Terence Gabriel)
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NASDAQ COMPOSITE: BUMPING UP AGAINST A CEILING? (0900 EDT/1300 GMT) Equity market bulls were heartened last week as the Nasdaq Composite broke out above the weekly resistance line from its November 2021 record high. That said, the IXIC's late-2022 high remains an especially strong ceiling:
In September of last year, the Composite put in a high at 12,270.189. After hitting new lows later in the year, the IXIC then rallied into an early February high at 12,269.555. After stalling less than one point from the September high, the IXIC suffered another pullback into mid-March. With a three-week rally, and last week's thrust above the resistance line, the Composite hit a high of 12,227.932, before ending at 12,221.907. Thus, it ended last week only around 42 points, or 0.3%, from the September high. So far this week, the IXIC's high is 12,224.68 on Tuesday, the IXIC ended at 12,126.327, putting it down about 0.8% this week.
Now, in the wake of the release of below expectations ADP national employment data at 0815 AM EDT, e-mini Nasdaq 100 futures are suggesting a slight Nasdaq 100 index dip at the open. In any event, traders will be focused on whether the Composite can re-group, and ultimately break through the ceiling, potentially clearing the way for further gains.
(Terence Gabriel)
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(Terence Gabriel is a Reuters market analyst. The views
expressed are his own)
