Wall Street extends Friday's declines early

Reuters

Wall Street extends Friday's declines early

2023年2月6日，下午1:38GMT

<html xmlns="http://www.w3.org/1999/xhtml"><head><title>LIVE MARKETS-Wall Street extends Friday's declines early</title></head><body>

Main U.S. indexes decline early: Nasdaq off >1%

All S&P 500 sectors red: comm svcs weakest group

Euro STOXX 600 index off ~1%

Dollar rise; gold edges up; crude, bitcoin dip

U.S. 10-Year Treasury yield rises to ~3.62%

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WALL STREET EXTENDS FRIDAY'S DECLINES EARLY (1030 EST/1530 GMT)

Major U.S. stock indexes are lower in early trading on Monday, with the benchmark S&P 500 .SPX dragged down the most by tech-focused shares including Microsoft MSFT.O, Alphabet GOOGL.O and Amazon.com AMZN.O.

All 11 S&P 500 .SPX sectors are down early.

The benchmark 10-year U.S. Treasury yield US10YT=RR hit four-week highs Monday, with investors still digesting a blowout employment number Friday that sparked concern about more aggressive action from the Federal Reserve.

Also, fourth-quarter earnings reports so far have mostly failed to ease worries about how higher rates are affecting demand for U.S. companies.

Here is the early market snapshot:

(Caroline Valetkevitch)

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EUROZONE BANKS: SELLSIDE LEAST BULLISH IN A YEAR (0940 EST/1440 GMT)

The latest BofA survey last month has shown that European banks are back in favour with global investors looking to position for high interest rates, but the sector's multi-month outperformance begs the question of what upside is left.

One way to answer that is to look at sellside views.

Median price targets for the top six euro zone lenders -- BNP, Santander, ING, Intesa, BBVA and Nordea -- imply an upside of between 6% and 19%. That's still a good number but in most cases it is the lowest rate in around a year. Is this a sign that easy gains are behind us?

The Euro STOXX Banks index .SX7E is up more than 50% from its July 2022 lows and is trading near its highest since May 2019 relative to the broader Euro STOXX .STOXXE index.

(Danilo Masoni)

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TECH DOWNSIZING, MORE LIKE RIGHT-SIZING (0915 EST/1415 GMT)

Data last week hinted at a robust labor market with plentiful job openings, but layoffs across Big Tech and major Wall Street firms have sparked concerns about an economic slowdown.

"You don't have a recession when you have 500,000 jobs and the lowest unemployment rate in more than 50 years," U.S. Treasury Secretary Janet Yellen told ABC's Good Morning America program.

Analysts at Goldman Sachs echoed a similar refrain in their note, adding that they believe the companies conducting layoffs are not representative of the broader economy and many of the recent layoff announcements do not necessarily signal weaker demand.

Companies that are laying off have three things in common, according to Goldman Sachs - they are likely to be in the tech sector, they've hired aggressively during the pandemic and they've have seen sharp drops in their share prices.

Tech companies laid off more than 150,000 workers in 2022 amid a rapidly fading pandemic-led demand boom, according to tracking site Layoffs.fyi.

"Some of these companies have conducted layoffs to right-size their workforce after over-extrapolating pandemic-related trends that ultimately proved more fleeting than expected, such as the preference for goods over services or spending more time online," the analysts added.

"Some were more an effort to improve company valuations by responding to investor demands to shrink workforces that were perceived to have grown too large and expensive, rather than a signal that the demand outlook had worsened."

Not every layoff translates into a lasting increase in unemployment because most workers find new jobs, Goldman Sachs said, adding that the job finding rate in recent months among unemployed individuals has been high by historical standards.

(Bansari Mayur Kamdar)

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S&P 500 INDEX: REST OR RELAPSE? (0900 EST/1400 GMT)

The S&P 500 index .SPX has backed away from some significant resistance hurdles. It now remains to be seen if a setback will prove to be just a pause in what is a new bull-phase, or if weakness will soon re-intensify, leading to a resumption of the prevailing bear trend:

Last week, the SPX hit a high of 4,195.44, rallying as much as 20% off its October 13 intraday low. With this recovery, the benchmark index recouped as much as 84% of its August-October down-leg, and as much as 53% of all its bear-market losses on a intraday basis.

However, the benchmark index failed to overwhelm the 4,198.70-4,203.04 area. This zone includes the 23.6% Fibonacci retracement of the March 2020-January 2022 advance, now acting as resistance, and the August 26 high, which was established the day of the market's vicious downside reversal stoked by Fed Chair Powell's especially hawkish speech at the Jackson Hole Symposium.

The late-August reversal left an unfilled gap to 4,218.70 on the charts.

With e-mini S&P 500 futures EScv1 suggesting the SPX, which ended at 4,136.48 on Friday, is poised to fall around 30 points early in Monday's session, a support shelf defined by September-to-January highs in the 4,119.28-4,094.21 area can come under fire.

Traders will be watching to see how the SPX behaves around this zone. The January 30 low was at 4,015.55, and the support line from the October low is now around 3,925.

Meanwhile, last Thursday, the SPX saw a golden cross, suggesting the potential that bulls are arresting control of the primary trend.

(Terence Gabriel)

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FOR MONDAY'S LIVE MARKETS' POSTS PRIOR TO 0900 EST/1400 GMT - CLICK HERE

SPX02062023https://tmsnrt.rs/3HFJS1s

Sellside less bullish on euro zone bankshttps://tmsnrt.rs/3I14enq

Early US snapshothttps://tmsnrt.rs/3YwuQ5b

(Terence Gabriel is a Reuters market analyst. The views expressed are his own)

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