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Major U.S. equity index futures mixed, little changed
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Euro STOXX 600 index ~flat
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Dollar up slightly; gold slips; crude, bitcoin decline
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U.S. 10-Year Treasury yield rises to ~3.57%
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GREENER PASTURES AHEAD FOR EUROPE'S ESG (0904 EDT/1304 GMT) After a rough 2022, it looks like sustainable investing is back in vogue. Environmental, social and governance (ESG) equity funds ended the first quarter of this year with net inflows, even after the March withdrawals sparked by the banking crisis, beating non-ESG equity funds, which lost money.
Citi Research's equity strategy team said there are three main reasons to re-engage with ESG stocks this year -
1. ESG earnings have been resilient to past profit recessions 2. Real rates are stabilizing and ESG is a "growth trade" so subsiding valuation pressures should help these stocks 3. Structural pro-ESG trends like the U.S. Inflation Reduction Act Stocks in Europe that could benefit from these trends, according to Citi, include luxury firms such as Richemont , and Kering and pharmaceutical firms like Novo Nordisk . Citi's list of resilient ESG stocks have gained 14% on average so far this year, outpacing the 10% gain in 2023 by the broader STOXX 600 index . Here's a full list of European ESG stocks, recommended by Citi with resilient EPS: RIC Name
YTD% Eiffage 11.782 Kone B 2.9814 Intertek Group 1.8344 Teleperformance -3.8616 Amadeus It Group 27.1267 Compass Group 8.2138 Whitbread 21.1284 Nestle 4.6722 London Stock Exchange 10.6222 Worldline 8.4588 Danone 20.8816 Prudential 2.0399 Kering 20.0631 Richemont N 22.769 Air Liquide 20.6193 Smith (DS) 1.1527 Publicis Groupe 25.143 WPP 16.435 Lonza Group 30.5231 Novo Nordisk 'B' 23.9232 Inditex 26.1569 Ahold Delhaize 15.7601 DSV 17.5559 EDP Renovaveis 1.0204
(Bansari Mayur Kamdar)
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S&P 500 INDEX: ABOUT TO BE A BREAK IN CLOUDS? (0900 EDT/1300 GMT) The S&P 500 index ended last week flirting some major chart barriers. Thus, bulls may soon learn whether their worries are just like passing clouds, or if instead, another storm may be brewing. The SPX hit a high on Friday of 4,163.19 before closing out the week at 4,137.64. Thus, the benchmark index flirted with the upper edge of the weekly Ichimoku cloud, which resides around 4,155. Ichimoku cloud is technical indicator which displays support and resistance, identifies trends, and measures momentum. Utilizing midpoints of ranges, a number of lines are generated. Two of these lines are used to create cloud boundaries. The entire cloud is shifted forward in time in order to provide a glimpse of future support and resistance:
Once the SPX broke below the cloud in May of last year, it has failed to thrust back above it on a weekly closing basis. Indeed, rallies failed in early-June, mid-August, mid-December, and in early-February of 2023. Thus, the 4,155 level presents an important hurdle. Add in additional resistance at the early-February high at 4,195.44, the 23.6% Fibonacci retracement of the March 2020-January 2022 advance at 4,198.70, the Fed-Chair Powell August-26 Jackson Hole speech high at 4,203.04, and the 100-week moving average, which ended Friday at 4,203.49, and bulls may have their heads in the clouds if they expect the SPX will be able to continue to advance. That said, clearing these barriers will have the potential to add credence to the view that the SPX saw a major low in October, and suggest that its trend inflection is only strengthening.
(Terence Gabriel)
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(Terence Gabriel is a Reuters market analyst. The views
expressed are his own)
