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U.S. equity indexes slightly red: Nasdaq down most, off
~0.3%
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Real estate weakest S&P 500 sector; energy up most
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Euro STOXX 600 index up ~0.2%
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Dollar slips; gold rises, crude up ~2%; bitcoin falls >5%
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U.S. 10-Year Treasury yield rises to ~3.50%
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WALL STREET'S MAJOR AVERAGES TURN RED (1010 EST/1410 GMT) Wall Street's major averages are now slightly red early on Monday, taking a breather after Friday's strong rally following the more solid than expected April jobs report.
Of note, the beleaguered bank sector's initial efforts at a comeback are faltering with the S&P 500 banks index last up less than 0.5%, while the KBW regional bank index is falling more than 1%. Offering some encouragement was a ~17% gain in shares of PacWest Bancorp after the lender sharply cut its quarterly dividend to shore up its finances. Still the stock is down more than 70% from its early March levels. Still, even after Friday's rally, a report by BTIG's chief market technician Jonathan Krinsky pointed to market breadth concerns and "some of the most extreme breadth divergences we have seen in some time." He notes that the S&P 500, on Friday, closed above its 200-DMA for the 34th consecutive day.
It is unusual to have <50% of SPX names above the 200-DMA after the index has been above its long-term moving average for this long. Since 1990, Krinsky notes 29 times the SPX went above its 200-DMA at least 34 days with the average percentage of components above the 200-DMA at 69%. This compares with the current 47% level, which is the third weakest reading.
Here is your snapshot from just after 1000 EDT:
(Sinéad Carew)
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S&P 500 INDEX: RESPECTING ITS LEVELS (0900 EDT/1300 GMT) The S&P 500 index ended a four-day losing streak on Friday. The benchmark index snapped higher on Friday after having tested its late-April trough and a trend line from its record high:
Indeed, the SPX hit a low on Thursday of 4,048.28, which was only a little more than one point below its 4,049.35 April 26 low, and less than one point under the broken resistance line from its record high, which was around 4,049 at the time. With a near-2% rally on Friday the S&P 500 ended at 4,136.25. On Monday, with e-mini S&P 500 futures up around 5 points in premarket trade, the SPX is poised to push high higher in early trade.
Weekly cloud resistance resides at 4,155. Additional hurdles
come in at the April 18 and May 1 highs at 4,169.48 and
4,186.92.
The 4,195.44-4,203.04 area remains a major barrier. This
zone includes the February 2 peak, the 23.6% Fibonacci
retracement of the March 2020-January 2022 advance at 4,198.70,
the 100-week moving average, which ended Friday at 4,202, and
the August 26, 2022 Fed-chair Powell Jackson Hole speech high.
Since reversing to the downside with Powell's speech that
day, the SPX has been unable to reclaim this level.
In the event of weakness, besides the late-April-early-May
lows, the broken resistance line which is now acting as support,
comes in at around 4,045 on Monday. The 50-day moving average
ended Friday just shy of 4,042.
(Terence Gabriel)
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FOR MONDAY'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)
