US STOCKS: Mega Caps Weigh, Banks Look Set To Miss Out On Record Streak
- S&P 500 futures have seen a further step lower and have reversed more than half of the week’s increase that had at one point been a 2% intraweek climb on at the time hopes of pared back tariff plans.
- At 5767 (-1.0%), it has pulled back from yesterday’s high/first resistance at 5837.25 but remains some way above support 5650.75 (Mar 18 low). Further support is then seen at a bear trigger of 5559.75 (Mar 13 low).
- Nvidia (-5.6%) is a major downward driver here, back close to session lows seen after the FT reported China is raising restrictions on chips. Bloomberg's write-up: "According to the FT, the government is encouraging Chinese groups to build data centers with chips that meet tighter energy requirements not satisfied by Nvidia's technology. Its H20 chip, a processor originally designed to satisfy US export controls put in place on China, would not be permissible under the new rules."
- It’s not the only “Magnificent Seven” member under pressure today though, with Tesla (-5.2%) plus worthy mentions for Alphabet (-1.9%), Meta (-2.0%) and Amazon (-1.4%).
- This backdrop unsurprisingly sees IT (-2.3%), communication services (-1.6%) and consumer discretionary (-1.5%) as clear losers for the day, whilst consumer staples (+1.1%), energy (+0.7%) and utilities (+0.5%) gain.
- Note that looking at the broader KBW banking index, it has currently dipped to -0.4% on the day but were it to recover back into the green come the close it would notch up a ninth consecutive gain for a record going back to 2006.
- E-mini comparison: Nasdaq 100 -1.7%, S&P 500 -1.0%, Russell 2000 -1.0% and Dow Jones -0.2%.
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US: Trump says Talks with Russia Proceeding "very well"
Trump's early summary of his meeting with Macron and suggests talks with Putin are proceeding "very well":
- Russia-Ukraine War [...] would have never started if I was President
- I emphasized the importance of the vital “Critical Minerals and Rare-Earths Deal” between the United States and Ukraine, which we hope will be signed very soon!
At the same time, I am in serious discussions with President Vladimir Putin of Russia concerning the ending of the War, and also major Economic Development transactions which will take place between the United States and Russia. Talks are proceeding very well!
GERMANY: Election Analyst Views Round-Up
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The German federal election on 23 February delivered an outcome that was widely expected, insofar as the conservative Christian Democratic Union (CDU) and centre-left Social Democrats (SPD) have emerged in a position to form a majority coalition, but also presents notable uncertainty. This largely centres on whether reforms to the constitutional debt brake will be possible given the ‘blocking minority’ held by the far-right Alternative for Germany (AfD) and far-left Die Linke (The Left). In this report we have selected key views and comments from various sell-side analysts covering the election and its implications for German politics and economic policy-making over the coming weeks and months.
ITALY AUCTION PREVIEW: On offer this week
MEF has announced it will be looking to sell the following at its auction this Thusday, February 27:
- E3.25-3.75bln of the new 2.95% Jul-30 BTP (ISIN tba, in line with our expectations)
- E2.5-3.0bln of the 3.65% Aug-35 BTP (ISIN: IT0005631590)
- E2.5-2.75bln of the 1.10% Apr-33 CCTeu (ISIN: IT0005620460)
