LIVE MARKETS Bull, bear, and fence-sitter camps all about equal

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  • Major U.S. indexes red; banks index up nearly 1%
  • Tech weakest major S&P sector; energy leads gainers
  • Euro STOXX 600 index falls ~0.6%
  • Dollar, crude, bitcoin down; gold ~flat
  • U.S. 10-Year Treasury yield rises to ~1.77%

Jan 7 - Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at markets.research@thomsonreuters.com

BULL, BEAR, AND FENCE-SITTER CAMPS ALL ABOUT EQUAL (1036 EST/1536 GMT)

The percentages of individual investors expecting stocks to be flat or down over the next six months both rebounded in the latest American Association of Individual Investors Sentiment Survey (AAII). With this, bulls reined in their horns a bit. As a result, around one-third of investors call each of the bullish, bearish, and neutral camps home.

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AAII reported that bearish sentiment, or expectations that stock prices will fall over the next six months, increased 2.8 percentage points to 33.3%. Pessimism extended its streak of being at or above its historical average of 30.5% to seven consecutive weeks.

Neutral sentiment, or expectations that stock prices will stay essentially unchanged over the next six months, moved up by 2.1 percentage points to 33.9%. Neutral sentiment is above its historical average of 31.5% for the fifth consecutive week.

Bullish sentiment, or expectations that stock prices will rise over the next six months, fell by 4.9 percentage points to 32.8%. Optimism remains below its historical average of 38.0% for the seventh consecutive week.

AAII noted that all three indicators are within their typical historical ranges, and that most of the responses to this week’s survey were recorded prior to Wednesday's sharp market decline.

With these changes, the bull-bear spread fell to -0.5 from +7.2 last week read more :

AAII01072022C

(Terence Gabriel)

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U.S. STOCKS TRY TO FIND FOOTING (1015 EST/1515 GMT)

U.S. stocks are churning early Friday after data pointed to weaker-than-expected job growth, while a rise in wages fueled concerns about higher inflation.

That said, after moving around the flat line so far, the major indexes have now fallen into the red again.

Traders remain focused on whether the Nasdaq (.IXIC) can continue to hold its December lows read more :

IXIC01072021

Meanwhile, value (.IVX) is once again outperforming growth (.IGX). However, both FANGs (.NYFANG) and banks (.SPXBK) are on the plus-side. Chip stocks (.SOX) are weak.

Here is where markets stand in early trade:

earlytrade01072021

(Terence Gabriel)

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U.S. STOCKS POISED FOR MODEST OPENING DIP AFTER PAYROLLS (0900 EST/1400 GMT)

U.S. equity index futures are modestly red in the wake of a softer-than-expected December non-farm payrolls print. The headline jobs number came in at 199k vs a 400k estimate. That said, wage data was hotter than expected:

NFP01072021SB

Regarding the numbers, Gennadiy Goldberg, interest rate strategist at TD Securities said, “It’s a bit of a mixed bag really. The headline numbers are quite a bit lower than anticipated, but a lot of the measures of labor market tightness, including wages and the unemployment rate, do suggest that we may be closer to full employment than was previously expected."

Goldberg added "I think overall this shouldn’t really detract the Fed from looking to tighten rates early. I think this should keep them quite hawkish, even though this most likely will be a temporary COVID induced disruption and we’ll probably see more of this in the next few months as well."

U.S. stock futures are red, with the Nasdaq 100 off the most at around 0.3%. Financials (XLF.P), and energy (.XLE.P) are quoted up in premarket, while tech (XLK.P) is lower.

The U.S. 10-Year Treasury yield is attempting to rise for a sixth-straight day, which is something it hasn't done since January 2021. It's high so far today of 1.7710%, is just shy of its March 2021 peak at 1.7760%.

Here is your premarket snapshot:

premarket01072021

(Terence Gabriel, Karen Brettell)

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FOR FRIDAY'S LIVE MARKETS' POSTS PRIOR TO 0900 EST/1400 GMT - CLICK HERE: read more

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Terence Gabriel is a Reuters market analyst. The views expressed are his own

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