*Main U.S. equity flutter near unchanged, Nasdaq slightly lower
*Comm svcs weakest S&P 500 sector; real estate leads gainers
*Euro STOXX 600 index ~flat
*Dollar up; gold, crude, bitcoin decline
*U.S. 10-Year Treasury yield rises to ~3.56%
Welcome to the home for real-time coverage of markets brought to
you by Reuters reporters. You can share your thoughts with us atTURN THAT FROWN UPSIDE-DOWNISH: EMPIRE STATE, NAHB (1049 EDT/1449 GMT)
Data released on Monday suggested the economic skies are a
tad less cloudy this month.
Factory activity in the Northeast bounced back to expansion this month.
The New York Fed's Empire State index delivered a big upside surprise in April, landing at 10.8, having spent
the previous four months in contraction (an Empire State number
above zero signifies monthly expansion).Analysts expected a reading of -18.
The turnaround was driven by robust bounce-back in new orders - to 25.1 from March's -21.7 print.
The index, which aggregates results from a survey sent to 200 manufacturing executives in New York State at the first of
the month, also showed a cool-down in the inflation-related
prices paid element, while the employment number remained in
contraction.The manufacturing sector - accounting for about 11% of the U.S. economy - has been contending with higher input costs, a
demand shift from goods to services and a worker shortage.But the sector's most formidable current bogeyman is tighter credit conditions - as the Fed continues to tighten the screws
and regional banks confront a liquidity crunch."On the face of it, this report suggests that the re-opening rebound in China’s manufacturing sector is providing a
significant boost to activity in the U.S., offsetting any drag
from tighter credit conditions," writes Kieran Clancy, senior
U.S. economist at Pantheon Macroeconomics."(But) capital spending is the lifeblood of U.S. manufacturing activity, and it is set to take an enormous hit as
credit conditions tighten," Clancy adds.On Thursday, the Philly Fed will round out the Atlantic region manufacturing picture:
Separately, the mood in the home construction market is a bit less gloomy in April, according to the National Association
of Home Builders (NAHB).While NAHB's Housing Market index inched up to 45 from 44 - consensus saw it staying put - it marks its ninth
straight month below 50, the line of demarcation between
pessimism and optimism.Even so, the report also shows its fourth consecutive monthly improvement.
"Currently, one-third of housing inventory is new construction, compared to historical norms of a little more than
10%," says Robert Dietz, NAHB's chief economist, who also notes
that "there is not significant evidence thus far" that tighter
lending conditions amid regional banking turmoil are hitting
builders and developers."Builders note that additional declines in mortgage rates, to below 6%, will price-in further demand for housing," adds
NAHB chair Alicia Huey.Indeed, traffic of would-be buyers, encouraged by recent down-tick in mortgage rates, appears to be on its way to
recovery.Later in the week, housing starts/building permits, mortgage demand and existing home sales data will give housing market
geeks more to chew on.U.S. STOCKS STEP GINGERLY IN EARLY TRADE (1015 EDT/1415 GMT) The main U.S. indexes are all roughly flat in early
trade on Monday as investors await more bank earnings and views
from Federal Reserve policymakers that could shape expectations
around when the central bank would pause its monetary policy
tightening.A majority of S&P 500 are in positive territory, with real estate posting the biggest rise.
Communication services is down more than 1.5%, making it the only one of the 11 sectors with an absolute change
of more than 1%.
Here is an early trade snapshot:
(Terence Gabriel)
*****
WEDBUSH BELIEVES INDIA IS APPLE'S NEXT MARKET TO CONQUER
(0925 EDT/1325 GMT)
Wedbush believes Apple Inc's move to open its
first retail store in India kicks off an aggressive push that
could ramp up annual India revenue to $20 billion by 2025.This compares with Apple's revenues from the country touching $6 billion in the year through March 2023.
"Apple, with price points across the board, plan to take a page out of their historically successful China strategy in
penetrating India over the coming years and unseating
traditional competitors," says Wedbush analyst Dan Ives.Apple is looking at India from both a production and a retail expansion point of view over the coming years - a
strategic "poker move," says Ives.Market share gains are on the horizon as it opens in major cities and attempts to attract more Indian consumers into the
Apple ecosystem.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
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.
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