* Major U.S. indexes down, but off early lows
* Tech weakest major S&P sector; energy leads gainers
* Euro STOXX 600 index ~flat
* Dollar ~flat; gold, crude rise; Bitcoin down ~4%
* U.S. 10-Year Treasury yield ~1.64%
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PEOPLE SHORTFALL TO FUEL FUTURE INFLATION (1101 EDT/1501
GMT)
While markets worry about inflation as the world recovers
from the COVID-19 pandemic, more price pressures lurk further
out due to a future worker shortage, according to a commentary
on Monday by Christopher Smart, chief global strategist and head
of the Barings Investment Institute.
Smart said a trend of slower population growth could mean
the world will start to run out of new people to fill jobs in
the coming decades.
"Current investor worries about supply shortfalls should
focus instead on the future needs of a planet whose most
precious resource is -- quite literally -- able-bodied people,"
Smart said.
The latest hike in prices, fueled by returning demand, will
trigger fresh supply to cap inflationary pressures and an ample
labor force will adjust to keep wages in check, the commentary
said.
Smart pointed to "persistent price rises" returning in the
future as the supply of workers relative to available work
shrinks.
"Fewer people alone will not necessarily drive up the cost
of hiring them, but fewer working-age people relative to the
overall population may do just that," Smart said.
(Karen Pierog)
*****
MAJOR U.S. INDEXES STUMBLE IN EARLY TRADE (1010 EDT/1410
GMT)
Amid lingering inflation concerns, major U.S. stock
indexes are once again stumbling. This after what may have
simply been a two-day relief rally that saw the S&P 500
retrace about 70% of its recent decline.
With this, tech and tech sub-sectors, such as
semiconductors are leading the market down. Tech is off
more than 1%, while the chip index is sliding more than 2%.
Meanwhile, retailers are set to take the earnings stage
after inflation-sparked market turbulence.
So far, they are one bright spot. The S&P Retailing index
, and the broader SPDR S&P Retail ETF are both
slightly green on the day.
Here is where markets stand in early trade:
(Terence Gabriel)
*****
NASDAQ 100 TRIPLE-Qs: MAYBE BEST TO GO WITH THE FLOW (0900
EDT/1300 GMT)
The Invesco QQQ Trust Series 1, which tracks the
Nasdaq 100, hit its record highs late last month. It has
since trickled down a bit, having lost about 3.5% from its end
of April close.
Meanwhile, although heading toward the summer months, QQQ
volume has been robust this May, with 536 million shares of
turnover so far this month. At the current pace, the triple-Q
volume is on pace to be more than a billion shares this May,
which would be the second highest reading for any month so far
this year.
That said, one measure that incorporates both price and
volume, the Money Flow index (MFI), may be casting some doubt
over the underlying thrust behind the QQQ's recent record highs:
Although, the ETF is less than 4% from its April close, the
MFI has hit a 14-month low. Of note, since 2007, QQQ declines of
varying degree have been preceded by protracted monthly MFI
divergence.
Just in terms of more recent history, despite new QQQ highs
in late 2018 and early 2020, MFI failed to confirm strength, and
in both instances, the ETF ultimately suffered a major sell off.
Potentially adding to the importance of its current level,
the MFI is flirting with a 12-year support line, which has
contained its weakness since late 2018.
Therefore, it may now be make-or-break for the MFI. With a
sharp upturn, the QQQ may get swept up in a strong current,
leading to another multi-month run. However, a support line
break may leave the Triple Qs vulnerable to a much deeper
decline, which could soon become a waterfall.
(Terence Gabriel)
*****
FOR MONDAY'S LIVE MARKETS' POSTS PRIOR TO 0900 EDT/1300 GMT
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(Terence Gabriel is a Reuters market analyst. The views
expressed are his own)