US Stocks Set For Mixed Open, Cryptos Slip As Bitcoin ETF Decision Day Arrives: Analyst Says S&P 500 Was 'Due For A Break' After Red-Hot 2023 Finish
The market mood may continue to be lackluster, with index futures indicating a mixed opening on Wednesday. The potential approval of a spot Bitcoin (CRYPTO: BTC) exchange-traded fund is the major event traders are likely anticipating, and a green light from the SEC could spark a rally in both crypto and crypto-linked stocks. However, traders might opt to remain on the sidelines ahead of Thursday’s inflation data, seeking confirmation of the downward trajectory in prices. Pre-announcements may flow in, impacting both individual stocks and entire sectors.
Cues From Tuesday's Trading:
U.S. stocks mostly closed lower on Tuesday as traders opted to stay on the sidelines in anticipation of the week’s inflation data. The upward bounce in bond yields also exerted downward pressure on equities. The Dow Industrials remained below the unchanged line for the entire session, and the S&P 500 also traded mostly in the red, although it finished off the session lows.
The tech-heavy Nasdaq Composite Index, despite a weak start, reduced its losses throughout the morning, staying mostly above the flat line in the afternoon before ending slightly higher.
Energy, real estate, utility, material, and financial stocks came under selling pressure on Tuesday.
US Index Performance On Tuesday
| Index | Performance (+/-) | Value |
| Nasdaq Composite | +0.09% | 14,857.71 |
| S&P 500 Index | -0.15% | 4,756.50 |
| Dow Industrials | -0.42% | 37,525.16 |
| Russell 2000 | -1.05% | 1,968.04 |
Analyst Color:
Carson Group’s Ryan Detrick said in a recent note that he remains bullish and expects stock prices to grind higher in 2024. The analyst, however, sees potential for some weakness in early 2023. “This weakness during a normally bullish time of the year has our attention, but after a 9-week win streak closing out 2023 (the longest since 2004), the S&P 500 was likely due for a break,” the analyst said.
“The massive breadth thrusts we saw late last year, a healthy economic backdrop, and the pivot to a more dovish Fed still have us in the camp that better times are coming,” he added.
Futures Today
Futures Performance On Wednesday
| Futures | Performance (+/-) |
| Nasdaq 100 | +0.19% |
| S&P 500 | -0.01% |
| Dow | -0.08% |
| R2K | -0.07% |
In premarket trading on Wednesday, the SPDR S&P 500 ETF Trust (NYSE:SPY) rose 0.05% to $474.13 and the Invesco QQQ ETF (NASDAQ:QQQ) gained 0.23% to $406.67, according to Benzinga Pro data.
Upcoming Economic Data:
The Commerce Department is scheduled to release the wholesale inventories report for November at 10 a.m. ET. Wholesale inventories may have declined 0.2% month-over-month in November following a steeper 0.4% drop in October.
The Energy Information Administration will release its weekly petroleum status report at 10:30 a.m. ET.
The Treasury is scheduled to auction ten-year notes at 1 p.m. ET.
New York Fed President John Williams is due to speak at 3:15 p.m. ET.
See also: Best Futures Trading Software
Stocks In Focus:
- Tesla, Inc. (NASDAQ:TSLA) rose modestly in premarket trading following the launch of the company’s new Model 3 EV in North America.
- Nvidia Corp. (NASDAQ:NVDA) continued to move higher, capitalizing on its upward momentum.
- Intuitive Surgical, Inc. (NASDAQ:ISRG) climbed over 5% in reaction to its positive preannouncement.
- Coinbase Global, Inc. (NASDAQ:COIN) moved down over 2% amid the lingering uncertainty about spot Bitcoin ETF approval.
- Juniper Networks, Inc. (NYSE:JNPR) added to its Tuesday’s gains after Hewlett Packard Enterprise Company (NYSE:HPE) confirmed rumors and announced a deal to buy the former.
- KB Home (NYSE:KBH) is scheduled to report its quarterly results after the market close.
Commodities, Bonds, Other Global Equity Markets:
Crude oil futures rose 0.19% to $72.38 in early European session on Wednesday following Tuesday’s 2%+ climb.
The benchmark 10-year Treasury note fell 0.019 percentage points to 3.998% on Wednesday.
Major Asian markets ended mostly lower as the lackluster lead from Wall Street overnight and worries concerning China’s economic weakness kept sentiment in the region subdued. The Japanese market, however, bucked the downtrend and posted noteworthy gains.
European stocks traded lower by late-morning trading.
In the currency market, the U.S. dollar weakened against most major currencies, although firming up against the yen and the Canadian dollar.
Major cryptocurrencies, including Bitcoin, experienced a retreat following a fake news post suggesting regulatory approval for a spot Bitcoin ETF had been granted. Bitcoin traded around the $35,600 level and may encounter volatility in Wednesday’s session.
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