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Equities Roundup, Scaling Back From 1Y Highs

US STOCKS
  • Stocks trading weaker at midday, moderate unwinds after SPX and Nasdaq indexes climbed to the best levels since mid-April 2022, DJIA best levels since late November 2022 last Friday.
  • Drifting off midmorning session lows, S&P E-Mini future are currently down 28 points (-0.63%) at 4425.75, DJIA down 281.33 points (-0.82%) at 34016.35, Nasdaq down 65.7 points (-0.5%) at 13623.86.
  • Trading desks cited various reasons for selling included less than expected cut to five-year China rate (10bp vs. 15bp) weighed on financial shares overnight. In Europe, usually stable chemical/materials stocks underperformed.
  • Laggers: Energy and Materials sectors underperformed, the former as crude prices traded weaker (WTI -1.78 to 70.00) with Devon energy -4.2%, APA -4.0% and Marathon -3.7%. Materials weighed by containers and packaging stocks, Ball COrp -3.35% while Westrock trades -2.7%.
  • Leading gainers: Consumer Discretionary sector shares traded flat to mildly higher, auto stocks outperforming (Tesla +1.8%). Health Care and Consumer Staples sectors followed, food, beverage and tobacco stocks outperforming.
  • For a technical perspective, despite today's dip, a bull theme in S&P E-minis remains intact. Last week’s gains confirmed a resumption of the uptrend, marking an extension of the bull cycle that started in October 2022. The focus is on 4494.20, the top of a bull channel drawn from the Oct 2022 low (cont). Initial support is at 4381.75, the Jun 13 low. A firmer support lies at 4332.90, the 20-day EMA. Pullbacks are considered corrective.

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