Regional banks recover

BY Janne Muta

|6 7, 2023

Major US indices gained modestly yesterday with S&P 500 (0.33%) and Nasdaq Composite (0.36%) reaching fresh closing highs for the year. Financial stocks led the market, with regional banks recovering from a previous selloff. The rally this year has been driven primarily by mega-cap technology stocks, resulting in a strong performance for the S&P 500. Information technology, communication services, and consumer discretionary sectors have been particularly contributing to the rally recently.

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Small-cap stocks have lagged behind since March but showed now some signs of life. Russell 2000 gained 2.68% as the index broke out of a base formation. If the rally lasts it supports the bullish market sentiment. All in all, investors were cautious ahead of the Federal Reserve’s upcoming meeting and the release of the May consumer-price index.

The DJ (0.07%) and NAS (0.12%) both increased marginally while DAX (0.56%) and FTSE (0.72%) moved higher a bit more decisively. USOIL (-0.67%) declined as Chinese data pressured the market. Gold (0.08%) remained practically unchanged. China’s trade data for May, showing a larger-than-expected drop in exports, could lead to speculation of policy stimulus measures from Beijing.

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DJ is trading in a range in the 2h chart. A decisive break above the New York cash session high would open the way to 33 850 while a break below yesterday’s low would probably move the market to 33 230.

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DAX is bullish above 15 909 (yesterday’s low). Above the level, look for a move to 16 200 while below the level the market could move to 15 800.

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AUDNZD is bullish above 1.0963. Above the level, the market is likely to move to 1.1060 while below the level we might see the market testing 1.0916 support again.

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GBPNZD is trading at a major support level (2.0404). If the market breaks decisively above 2.0507 it probably trades to 2.0610. Below 2.0404, look for a move to 2.0297.

The Next Main Risk Events

  • CAD BOC Rate Statement
  • CAD Overnight Rate
  • CHF SNB Chairman Jordan Speaks
  • USD Unemployment Claims
  • CNY New Loans
  • CAD Employment Change
  • CAD Unemployment Rate

For more information and details see the TIOmarkets economic calendar.

Trade Safe!

Janne Muta
Chief Market Analyst

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Janne Muta

Janne Muta holds an M.Sc in finance and has over 20 years experience in analysing and trading the financial markets.

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