US STOCKS: Midday Equity Roundup: Cautious Optimism at Bay
- Stocks are trading near steady (SPX eminis) to mixed late Wednesday morning, the Dow trading higher after trading weaker since Monday - sentiment cautiously buoyed ahead US/China trade talks expected in Geneva over the weekend - not to mention event risk ahead of today's FOMC announcement at 1400ET.
- Trade negotiations have been less than transparent since the "Liberation Day" tariff announcement on April 2 followed by a 90 day pause a week later. Despite Treasury Sec Bessent stating the US is negotiating with "17 major trading partners" Tuesday, nothing substantive has been announced.
- Currently, the DJIA trades up 220.6 points (0.54%) at 41051.33, S&P E-Minis up 6.5 points (0.12%) at 5632.5, Nasdaq down 52.4 points (-0.3%) at 17638.13.
- Consumer Services and Information Technology sectors underperformed in the first half, interactive media and entertainment shares weighing on the former. Notably, Alphabet trades -6.45% on the back of Apple's Cue, who talks up that they're exploring adding an AI search function to their native browser - and may select Perplexity or Anthropic as options for the product.
- Laggers in the IT sector included Arista Networks -6.71%, Super Micro Computer -6.07%, Crowdstrike Holdings -4.01% and Apple -2.37%.
- On the positive side, Financial and Consumer Discretionary sectors outperformed in the first half, leading gainers in the former included banks and services: Franklin Resources +1.94%, State Street +1.92%, Invesco +1.83% and Assurant +1.81%. Meanwhile, Discretionary stocks included broadline retailers: Best Buy Co +2.83%, Deckers Outdoor +2.31%, Tapestry +2.17%.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
FRANCE: Bayrou Gov't Vulnerable To RN Backlash After Le Pen Barred From Running
As noted earlier (see 'FRANCE: RN Contemplating Censure Against Bayrou Gov't, Marginal Widening In OATs', 1214BST) the court decision barring Marine Le Pen from running for office for the next five years could pose immediate risks to political stability should the far-right Rassemblement National (National Rally, RN) look to actively oppose the minority gov't of PM Francois Bayrou in protest against the sentence. The Bayrou gov't relies on the left-wing New Popular Front (NFP) alliance and the RN not wanting to vote together in a confidence motion, as without support from both wings of the political spectrum, the required majority in the National Assembly cannot be achieved.
- As such, in each instance of censure votes being brought against Bayrou, the measure has only been able to gain the support of one or the other. The last time that the two sides voted together was on the censure motion that deposed the short-lived gov't of PM Michel Barnier in Dec 2024.
- On 15 April, Bayrou is set to unveil "the general framework" of the options open to the gov't regarding the 2026 budget. It remains to be seen what issue, whether budgetary or pensions related, could provide the spark that sees the RN back an NFP censure motion. In any case, President Emmanuel Macron would be in a difficult position, trying to put together a gov't that could fall apart either immediately or within months given that new legislative elections will be possible from July onwards.
GBP: GBP/USD Extends Weakness, Opening Lower Phase in the Pair
GBP/USD plumbs a new session low as the WMR fix window concludes, with the price remaining weak on the seemingly clean break below both the 200-dma of 1.2813 and the 50-dma of 1.2732 today.
- 1.2654 is the key level to watch on sustained weakness. This level marks the 50% retracement for the recovery off 1.2100 and the YTD low - but we'd likely need a sustained phase of dollar strength for the next leg here - although we do note that the case for GBP underperformance through tariff volatility - which is continuing to play out here.
- Today's spot weakness means the pair has drifted through the most sizeable optionality interest for tomorrow's cut ($1.2785-10(Gbp590mln))
FED: US TSY 13W BILL AUCTION: HIGH 4.175%(ALLOT 70.48%)
- US TSY 13W BILL AUCTION: HIGH 4.175%(ALLOT 70.48%)
- US TSY 13W BILL AUCTION: DEALERS TAKE 29.33% OF COMPETITIVES
- US TSY 13W BILL AUCTION: DIRECTS TAKE 4.57% OF COMPETITIVES
- US TSY 13W BILL AUCTION: INDIRECTS TAKE 66.10% OF COMPETITIVES
- US TSY 13W BILL AUCTION: BID/CVR 2.82
