US STOCKS: Late Equities Roundup: Chip Makers, Insurance Providers Lagging
Jan-10 19:28
- After recovering slightly from midday lows, stocks are receding again late Friday, no real changes to underlying drivers IT and Financial sectors continued to underperform.
- Currently, the DJIA trades down 566.66 points (-1.33%) at 42065.08, S&P E-Minis down 70.75 points (-1.19%) at 5887.75, Nasdaq down 248.9 points (-1.3%) at 19229.91.
- Semiconductor and hardware makers weighed on the tech sector after the exiting Biden administration looked to tamp down on high end chips used for AI applications sold to China. Leading laggers included ON Semiconductor -6.12% , Advanced Micro Devices -4.64% while Oracle, Intel, Nvidia, AMAT and Broadcom traded -4.5-2.5%.
- Insurance and services shares weighed on the Financials sector, partially driven by expected losses tied to the California wildfires: Allstate -6.07%, Global Payments -5.51%, Cincinnati Fncl Services -5.21% and Travelers -4.11%.
- On the positive side, the Energy sector continued to outperform with oil and gas stocks supported by a rally in crude (WTI +2.62 at 76.54): Devon +2.87%, Coterra +2.50%, EOG +2.35 and Valero +1.89%.
- Reminder, the next round of quarterly earnings kicks off mid-January with Blackrock, Bank of NY Melon, Wells Fargo, JP Morgan, Goldman Sachs, Citigroup, US Bancorp, M&T Bank and PNC all reporting between January 13-16.
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US DATA: 12-Month Rolling Budget Deficit At Highest Since Jul 2023
Dec-11 19:26
November's budget balance was in deficit by $356.5B, about $10B more than expected and a jump from $314B in October.
- This brings the 12-month rolling deficit to $2.08T, the highest since Jul 2023. That is closer to 7% than 6% of 2025 (calendar year) projected GDP.
- Treasury doesn't provide analysis of the figures in the report. But through the first two months of the fiscal year, the total deficit is tracking $624B, one-third of the $1.88T full-year estimate (based on the OMB's July estimates- though of course while most months will register deficits, tax dates including April's will help offset the widening trend).
- The incoming Trump administration hopes to make room for tax cuts in part through paring inefficiencies/spending, but as the graphic provided by the Treasury underlines, most spending is on non-discretionary items (of $1.25T of total outlays so far in FY2025, $900B was spent on Social Security, Medicare, National Defense, and Net Interest).
- Once again, net interest payments were a key factor, totaling $79.4B - similar to the past several months but with rates rising (and considering the ballooning size of the debt pile), the 12-month rolling total has hit fresh all-time high of $893B.
EURGBP TECHS: Southbound
Dec-11 19:00
- RES 4: 0.8448 High Oct 31 and reversal trigger
- RES 3: 08376 High Nov 19 and a bull trigger
- RES 2: 0.8337 50-day EMA
- RES 1: 0.8306 20-day EMA
- PRICE: 0.8229 @ 15:42 GMT Dec 11
- SUP 1: 0.8225 Low Dec 11
- SUP 2: 0.8203 Low Mar 7 2022 and a major support
- SUP 3: 0.8200 Round number support
- SUP 4: 0.8188 1.00 proj of the Oct 31 - Nov 11 - 19 price swing
A fourth consecutive session of lower lows and lower highs for EUR/GBP to pile pressure on support, with 0.8203 the level to watch - the Mar 7 ‘22 low and the lowest point of a multi-year range. A break through support here would work against the RSI and could tip the price into technically oversold territory for the first time since September. This week's break lower has cancelled a recent bullish signal - an engulfing candle on Nov 12 - as rate differentials and aggressive ECB pricing dictate play.
MNI: US NOV TREASURY BUDGET -$366.8B
Dec-11 19:00
- MNI: US NOV TREASURY BUDGET -$366.8B
