EQUITIES: Prices Bottom Out on Report Bessent May Moderate Tariff Approach
Another phase of selling pressure had put US futures through to fresh session lows at the London close, with the entry into bear market territory for the NASDAQ-100 potentially triggering further weakness - however the Tweet from Chuck Gasparino citing sources in reporting that Bessent is "trying to moderate" the President's hardline on trade is containing indices here.
- The softer-growth outlook playing out via oil prices is dragging the energy sector first and foremost, putting the energy sector at the bottom of the S&P500. Major explorers, most notably ExxonMobil and Chevron, are the hardest hit, pinned by both the softer oil price as well as an expected demand hit for their refined products.
- Tech names are similarly weak, presumably due to the exposure and risks surrounding large firms and anti-competition probes and digital services taxes that could be part of the EU's countermeasures against the US. As a result, Meta Platforms (-6%) is sharply underperforming.
- As noted above, the equivalent bear market level for the S&P 500 is 4,919.00, and Dow Jones at 36,043.50.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
US TSYS: Post-ISM Services React
- Treasury futures scale off recent session highs after higher than expected ISM Services data, Factory & Durable Goods Orders look in-line.
- The Jun'25 10Y contract trades -4 at 111-04 after vs. 111-15 high, still well inside technicals: resistance above at 112-01/02 (High Mar 4 / 1.382 proj of Jan 13-Feb 7-12 swing), support below at 110-23/110-00 (Low Feb 28 / High Feb 7).
- Curves still steeper - but off highs: 2s10s +3.281 at 28.239, 5s30s +3.084 at 52.139.
BOE: Bailey also sees two sided risks; doesn't see second round impacts for now
- "I'm rather more in the case two, with sort of balance on either side than poly Megan [Greene] Is. But, you know, that's reasonable. People can take those views quite reasonably."
- "I'm very much, as Alan said, you know, two sided risks here and I sort of two sided risks have increased so that bears out Alan's point about uncertainty."
- "Is this going to have second round effects or not? Now my view is, at the moment, I would say less likely, and that's a sort of contextual point, really, that set against a weakening pattern of the economy, probably less likely. However, since some of it is in energy and food, those are the two things that, when you ask people what shapes their perceptions of inflation, those two things, because we all consume them most frequently, they do have quite a big impact, so we have to watch that. And secondly, of course, you know, you've got the sort of the hangover effect from the last shock, with people saying inflation is going up again, is it? So we have to watch that carefully"
EURJPY TECHS: Has Pierced Resistance At The 50-Day EMA
- RES 4: 162.70 High Jan 28
- RES 3: 161.80 High Jan 30
- RES 2: 161.19 High Feb 13 and a bull trigger
- RES 1: 160.18 Intraday high
- PRICE: 160.12 @ 15:01 GMT Mar 5
- SUP 1: 157.98 20-day EMA
- SUP 2: 155.60 Low Mar 4
- SUP 3: 154.80 Low Feb 28 and a bear trigger
- SUP 4: 154.42 Low Aug 5 ‘24 and key medium-term support
This week’s strong rally in EURJPY undermines a recent bearish threat and instead highlights a possible reversal. The cross has again traded higher, today, and pierced resistance at the 50-day EMA, at 159.52. A clear break of the EMA would strengthen a bull theme and expose the key resistance at 161.19, the Feb 13 high. Initial support to watch is 157.98, the 20-day EMA. Key support has been defined at 154.80, the Feb 28 low.
