Main U.S, indexes gain: Nasdaq out front
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Tech leads S&P 500 sector gainers; staples weakest group
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Euro STOXX 600 index up ~0.7%
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Dollar down; gold, crude, bitcoin gain
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U.S. 10-Year Treasury yield edges up to ~3.58%
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U.S. STOCKS TRY TO KEEP THE MOMENTUM GOING (0949 EST/1449 GMT)
Wall Street's main indexes are higher early on Monday on optimism around China reopening its borders, while signs of a cooling labor market boosted bets of a slower pace of interest rate hikes by the Federal Reserve.
The Nasdaq is out front, rising more than 1%. Chip and FANG indexes are also up more than 1%. Growth is outperforming value.
Meanwhile, the S&P 500 index, at around 3,925, is back over its 50-day moving average, which is now around 3,906. Traders will be watching to see if the benchmark index can sustain its early strength into the close. The 200-DMA is now around 3,994.
This, after the SPX kicked off the first week of the 2023 with a rise of more than 1.4%.
With last week's rise, Jay Woods, chief market strategist at DriveWealth, is pointing out a fun fact: "If the market keeps up this pace the S&P 500 will be up 111% for the year."
Here is a snapshot of where markets stood around 15 minutes into Monday's session:
BRAZIL RIOTS HIT MARKETS, POLITICAL SCARS MAY LAST EVEN LONGER (0915 EST/1415 GMT)
Over the weekend, supporters of Brazil's former President Jair Bolsonaro stormed the capital, launching the worst attack on Brasilia since the country's return to democracy in the 1980s.
Brazil's currency weakened over 1% against the dollar, while U.S.-listed Brazilian stocks slipped in premarket trading.
Even though the riots are anticipated to hit trading sentiment for the day, analysts believe that markets could view it as a one-off event, just as Brazil starts to establish control over the situation.
"As day-to-day government work resumes, attention should go back to the macro issues that have been top of mind and, slowly but surely gaining importance," economists at JPMorgan said in a research note.
President Luiz Inacio Lula da Silva, Bolsonaro's leftist rival who took office on Jan. 1 after a narrow October election win, promised to bring those responsible for the violence to justice.
But there were still concerns about how else Lula might react to the political unrest.
"The risk from an economic perspective is that this threat to his presidency prompts Lula to embrace the more left-wing parts of his agenda, rather than seek compromise with his political opponents," said William Jackson, chief emerging markets economist at Capital Economics.
JPMorgan economists also highlighted that the political impact could be more prolonged, while watching out for whether these protests will pop up again.
So far, the protests were centered in Brasilia, with market watchers hoping they don't spread to other states or cause a ripple effect on Brazil's road network.
Brazil depends heavily on its road network and trucking industry for transporting goods.
Going forward, JPM notes three main events to focus on - the replacement of two central bank directors next month, Lula's new economic plan, and the form and shape of the tax reform bill.
S&P 500 INDEX: 50-DAY HURDLE ABOUT TO FALL? (0900 EST/1400 GMT)
The S&P 500 index ended Friday above its 100-day moving average (DMA) for the first time since December 14.
And with e-mini S&P 500 futures quoted up around 0.5% in premarket trade on Monday, the benchmark index looks poised to leap over another closely watched hurdle in the form of its 50-DMA in the early throes of the session:
The SPX ended Friday at 3,895.08, but with the SPX expected to pop more than 15 points at the open, the benchmark index can leap over its 50-DMA, which should ascend to around 3,905.
Over the past three weeks or so, an SPX support zone in the 3,815.20-3,796.27 area has been proving resilient. The index has only seen one close below this zone. That said, since December 16, the SPX has only managed one close above its 50-DMA, so a range has prevailed.
Meanwhile, the spread between the 50- and 200-day moving averages continues to narrow. On Friday it ended at -91.67 points, or its tightest reading since April 22. The 200-DMA closed Friday around 3,996.
Of note, the 50-DMA crossed below the 200-DMA back on March 14, signaling a "death cross." The 50-DMA has been below the 200-DMA ever since.
Thus, traders will be watching for either more forthright weakness, which could then once again put the 50-DMA in gear with the 200-DMA to the downside, or whether the index can firm enough to see the spread between these moving averages narrow even further, setting up the potential then for a "golden cross."
A golden cross occurred on the DJI on December 14.
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