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Main U.S. indexes mixed, little changed
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Utilities weakest S&P 500 sector; comm svcs leads gainers
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Euro STOXX 600 index up ~0.1%
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Dollar slips; gold edges up, crude up ~1%; bitcoin up
>3.5%
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U.S. 10-Year Treasury yield rises to ~3.50%
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U.S. STOCKS TENTATIVE IN EARLY TRADE (0945 EDT/1345 GMT) U.S. stock indexes are little changed early on Monday. That said, there is optimism over the potential for a deal to raise the U.S. debt limit, though investors may remain cautious as they await comments from Federal Reserve policymakers through the week. President Joe Biden said over the weekend he expects to meet with congressional leaders on Tuesday and remained optimistic about agreeing on a deal to raise the nation's $31.4 trillion borrowing limit. Investors will also be tracking speeches by a host of Federal Reserve officials this week, including Chair Jerome Powell on Friday, for clues on potential rate cuts this year. A majority of S&P 500 sectors are lower, though most changes are modest. Value is outpacing growth in early trade. Growth has outperformed value in nine of the past 10 sessions.
Here is an early trade snapshot:
(Terence Gabriel)
*****
S&P 500 INDEX: OUTLOOK STILL CLOUDY (0900 EDT/1300 GMT)
The S&P 500 index is virtually flat over the past six
weeks, up just 0.3% since late March.
Indeed, the SPX continues to struggle just shy of some major
chart barriers. And last week's 0.3% dip provided little clarity
for traders as they remain focused on one big billowy cloud on
the horizon.
The SPX hit a high last week of 4,154.28 before ending
Friday at 4,124.08. Thus, the benchmark index continues to flirt
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 only ended back above it once, on a weekly closing basis.
Rallies failed in early-June of last year, again in mid-August
and mid-December, as well as in early-February of this year.
The SPX managed to end above the upper edge of the cloud on
April 28. However, since then it has fallen two-straight weeks.
Thus, the 4,155 level remains a key 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 100-week moving
average, which ended Friday at 4,200.75, and the Fed-Chair
Powell August-26 Jackson Hole speech high at 4,203.04, 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 suggest that its advance is only strengthening.
Among nearby support levels are the rising 50-day moving
average, which ended Friday at about 4,058, and last week's low
at 4,048.28.
(Terence Gabriel)
*****
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)
