- Wall Street indices open lower
- US100 drops below lower limit of market geometry
- US housing market and industrial production data surprise positively
- GitLab jumps on M&A rumours
- US chip stocks drop as US threatens to increase restrictions
Wall Street indices launched today's trading lower - S&P 500 opened around 1% lower, Dow Jones dropped 0.1%, Nasdaq plunged 1.6% at session launch and small-cap Russell opened with an around-0.5% bearish price gap.
Tech sector is being pressured by media reports suggesting United States may decide on a harsher restrictions on companies that are providing semiconductor technology to China.
US macro releases today turned out to be better-than-expected. First, US building permits and housing starts data for June came in above market expectations showing 3.4% and 3.0% MoM increases, respectively. Later, US industrial production reading for June showed a 0.6% MoM increase, while markets expected just 0.3% MoM increase. Capacity utilization ticked higher from 78.7 to 78.8% in June (exp. 78.4%). However, those releases barely had any impact on USD or US index futures.
Source: xStation5
Recovery attempt at Nasdaq-100 futures (US100) has been halted by the 23.6% retracement of the upward impulse launched in late-June 2024. Taking a look at US100 chart at H1 interval, we can see that the index failed to break above 20,700 pts area three times before turning lower and breaking below 38.2% retracement in the 20,500 pts area. Declines accelerated afterwards and the index also slumped below the support zone ranging around 50% retracement, and additionally marked with the lower limit of the local market geometry. In theory, this suggests changing of the short-term trend to bearish and may hint that deeper declines are looming. Should we see the index pull back further, the near-term support levels to watch are marked with 61.8% retracement in the 20,200 pts area and 78.6% retracement in the 20,000 pts area.
Company News
US semiconductor companies are trading lower today. Bloomberg reported that United States has warned its allies that it considers placing the most severe trade restrictions on companies that continue to provide access to advanced semiconductor technology to China, like for example Dutch ASML or Japan's Tokyo Electron. Nvidia (NVDA.US), AMD (AMD.US), Broadcom (AVGO.US) as well as a number of other US chip companies launched today's trading lower on those news.
GitLab (GTLB.US) rallies today amid reports on potential sale. Reuters reported that the company has drawn interest from peers, including Datadog (DDOG.US). However, neither GitLab, nor Datadog responded to requests for comment from Reuters.
VF Corporation (VFC.US) gains over 6% today. Move higher was triggered by an announcement that EssilorLuxottica (EL.FP), Italian-French eyewear company, will put Supreme brand from VF for $1.5 billion in cash. Analysts note that the acquisition comes as a surprise and was not expected given Supreme's small visibility in eyewear. Transaction is expected to close by the end of the year.
Analysts' actions
- Valero Energy (VLO.US) upgraded to 'outperform' at Mizuho Securities. Price target set at $175.00
GitLab (GTLB.US) launched today's trading with an over-10% bullish price gap. However, bulls seem to struggle with breaking above 200-session moving average (purple line) and part of early gains was erased. Source: xStation5
