US EARLY MORNING: US equity futures are around flat ahead of Powell, weekly claims

US PRE-MARKETS: US equity futures are up slightly, bond yields are a little wider, but not too far off neutral; the Dollar Index is seeing slight gains, while oil is seeing some stability after Wednesday’s slide, with Brent prices back above USD 80/BBL. Today’s focus will be on a heavy slate of central bank speak. Fed Chair Powell will take part in a panel discussion (19:00GMT/14:00EST), while 2024 voters Bostic and Barkin will also speak. Traders will also be watching out for comments from the ECB President Lagarde, who is due to speak after the European close. Data-wise, weekly initial jobless claims data is due before the open, while EMFX traders expect Banxico to keep rates unchanged at 11.25% today. Our full interactive calendar can be accessed here, a pdf version can be downloaded here.

EQUITY POSITIONING: Strategists at UBS said that last week's rally challenged the downward momentum in equities which started at the end of July. "What stands out this week is that tech has been able to extend the rally and is even eyeing the summer highs while small caps/cyclicals have given back some of their gains already." The bank notes that it is not just mega-cap tech rallying, but also profitless tech/high growth Software as a service names, which have benefited from strong earnings from Datadog (DDOG). "This price action implies that investors are not willing to simply buy everything," UBS says, and "as for most of the year, they would rather stick with higher quality stocks and reward positive earnings stories." UBS argues, therefore, that for small caps and cyclicals to catch up, earnings and economic data would need to accelerate rather than slow down, and the 54% of retail and 35% of consumer discretionary companies reporting between now and December 8th will set the tone. "For now, it seems too early to play for a sustained low quality squeeze, especially as the positioning setup favours SPX/NDX over RTY in the near-term,"; the bank cites eight CTA buy triggers across SPX/NDX within 2% of spot versus zero in RTY, lower realised volatility means risk control buying, which is skewed towards buying SPX, while corporate buybacks are also more heavily concentrated in SPX/NDX. "All in all, SPX/NDX appear to be at the cusp of a positive shift in momentum, but RTY, on the other hand, has a long way to go."

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09 Nov 2023 - 09:30- EquitiesResearch Sheet- Source: Newsquawk

USDNVDA.USNVDASteel ManufacturingEntertainmentPresidentUBS AGFederal ReserveEli Lilly & CoMorgan StanleyEIHDF.USLLY.USEADSY.USRHHBY.USMGM.USAZN.USTSLA.USCART.USMT.USDIS.USAMC.USDTEGY.USMS.USSFTBY.USTTWO.USAPP.USFICO.USFLT.USChinaUnited StatesEURElecsys CorpFDALLYMerck & Co Inc9888.HKFLTOilBrentCentral BankECBInitial Jobless ClaimsEquitiesSoftwareDDOGS&P 500 IndexWalt Disney Co/TheDISDeutsche Telekom AGTECHBaidu IncAI FPSoftBank CorpSony CorpTTWOFICOTSLAInflation888 Holdings PLCMGMSouth KoreaArcelorMittalMTCTVAMSAstraZeneca PLCCore CorpUnited KingdomJPYEU SessionAsian SessionHighlightedResearch SheetDataAZNGBPCNYJapan

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