U.S. stocks mixed, but FANGs still sharp

Dollar dips; gold, crude rise

  

April 13 - 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

U.S. STOCKS MIXED, BUT FANGS STILL SHARP (1000 EDT/1400 GMT)

Major U.S. indexes are mixed in early trade Tuesday after data showed consumer prices increased by the most in more than 8-1/2 years in March, while Johnson & Johnson slipped as federal health agencies recommended pausing the use of its COVID-19 vaccine.

With this, more economically sensitive S&P sectors, as well as travel stocks, such as airlines are among the losers, while tech and some stay-at-home plays outperform. 

Meanwhile, FANGs are continuing their winning ways. The NYSE FANG+TM Index is on track for a 12th straight higher daily close. The NYFANG has never closed up 12 days in a row, but has an 11-day win streak through Monday, as well as into its February-16 top.

Here is where markets stand in early trade:

(Terence Gabriel)

*****

DOW FUTURES: IT MAY BE A MATTER OF MOMENTUM (0900 EDT/1300 GMT)

CBT E-Mini Dow Jones Futures, which hit fresh record highs in premarket trade, have reversed to the downside. That said, with a drop of only around 0.2%, losses are relatively modest.

In any event, there are weekly momentum issues which may ultimately leave the futures vulnerable to more extensive weakness:

Last Friday, the weekly RSI closed at its most overbought reading since January 2020, and right at the resistance line from its early 2018 high.

Additionally, since late 2018, the two most severe declines in the futures were preceded by a weekly momentum divergence. Indeed, RSI non-confirmation occurred ahead of the more than 20% slide into the December 2018 low, and the near 40% collapse into the March 2020 trough.

Therefore, an RSI break of the support line from its March 2020 low may coincide with a period of increasing downside pressure. Conversely, if the RSI can breakout above the resistance line, there may be room for extended gains.

However, in event of further gains, the futures could still be vulnerable to a sudden swoon given that the RSI could quickly reach severely overbought levels.

(Terence Gabriel)

*****

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

More From Equities