Main U.S. indexes dip into red; FANGs show strength
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Utilities weakest S&P 500 sector; energy leads gainers
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Euro STOXX 600 index edges up ~0.1%
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Dollar ~flat; gold, crude, bitcoin gain
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U.S. 10-Year Treasury yield rises to ~3.74%
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'BUFFER-FREE' DEALS FOR CYBERSECURITY FIRMS - WEDBUSH (0945 EST/1445 GMT)
The tech-heavy Nasdaq Composite Index hasn't had the best year, with the index falling 29% so far in 2022. But for cybersecurity firms, things could start looking brighter soon.
Wedbush notes that after robust earnings from Palo Alto , investor sentiment has seen a positive shift sector-wide, with deal pipelines, M&A potential and the massive shift to clouds still underway as the sectors heads into 2023.
Analysts at the brokerage said that while there is 'clear' uncertainty in a 'cloudy' macroeconomic situation, cybersecurity spending is gaining more of the 'budget dollars', with companies including Palo Alto, Zscaler Inc and Fortinet Inc having grabbed deals in a competitive environment.
Areas of identity threat detection, privileged access management (PAM), endpoint security all seem to be the hot cakes in the otherwise icy tech world, with key IT decision makers moving towards digital transformation and digital protection becoming the highest priority, according to the analysts.
Wedbush said that while Europe is seeing more deals slip away, the demand in the U.S is more than enough to offset the potential headwinds, with the brokerage anticipating the companies to get ahead of their targets in Q4 by 3%-4%.
The Global X Cybersecurity ETF, which contains some of the major cybersecurity companies, including Palo Alto, Checkpoint Software Technologies, Fortinet, Zscaler, and Tenable Holdings, has declined 27.7% year-to-date, slightly outperforming the tech-heavy Nasdaq.
CRUDE OIL: WILL TRADER JOE GET HIS $70 FILL? (0900 EST/1400 GMT)
On Monday, NYMEX crude oil futures hit a low of $73.60. With this, the futures fell to their lowest level since December of last year, and were down nearly 44% from their post-Russian invasion of Ukraine intraday spike high of $130.50 in early March.
Thus, they neared the level that President Joe Biden announced that the U.S. would look to replenish its Strategic Petroleum Reserve (SPR), buying back oil it sold for $100 at a price around $70.
Biden had drawn on the SPR in order to gain more stability in gas prices, although he said it was not a politically motivated move ahead of the U.S. November elections.
In any event, as reported on Nov. 23, U.S. crude oil stocks in the Strategic Petroleum Reserve hit their lowest level since March 1984.
Crude was pressured on Monday amid economic growth concerns exacerbated by strict COVID-19 curbs and protests in China, the world's biggest crude importer.
However, after hitting $73.60, crude reversed to the upside on talk of an OPEC+ production cut. On Tuesday, the futures are up nearly 2% at around $78.70.
Meanwhile, on Friday, crude futures closed at a level that was 1.18x the value of their 200-week moving average. With the bounce so far this week, the 200-week disparity is ticking up to 1.21x:
The disparity double-topped in early March and mid-June at 1.98x. Of note, since 1990, and prior to 2022, there were seven 200-WMA disparity peaks, 1.38x or higher. In six of those instances, crude ultimately retreated below its 200-WMA (sub-1.00 disparity). It was only subsequent to the 2005 peak, that crude bottomed in early 2007 at 1.04x the 200-week MA. Not quite 1.00, but pretty close.
Crude could, of course, mark time and churn, allowing the moving average to ultimately catch up (the 200-WMA is currently rising ~10-15 cents per week), or it could simply continue to rally.
That said, it now faces a number of nearby resistance hurdles including $81.65 and $87.25, ahead of the $93.75-$97.66 area.
It may remain an open question whether crude hits President Biden's buy level. However, traders remain focused on whether the 200-WMA, which now sits just shy of $65.00, will continue to work its magic as a powerful magnet.
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