Developments in the Middle East and Friday’s mini-sell-off in tech giant stocks on Wall Street are once again changing the landscape, putting short sellers back in the driver’s seat.
Trump’s negative stance on the potential lifting of U.S. sanctions foreshadowed what was to come. Strikes from both sides—Iran and Israel—and a new upheaval in the futures markets.
Brent at $96.36 and WTI at $93.50, with the VIX/CBOE jumping above 20 to 21.51 points—higher than the first risk-taking alert threshold.
Today’s session is critical for the New York market, with short and long positions locked in a “battle” from the start. Noteworthy is the divergence between S&P 500 and Nasdaq futures, with the former trading at a premium. Volatility and risk in trading/intraday are expected to be the main features of the day, with DAX30 futures down 0.89% at 09:30.
In this environment, the stance of traders—both domestic and foreign—will depend largely on the opening of European markets, with the EuroStoxx Banks index serving as a bellwether for the bank-heavy Euronext Athens.
The DTR stood at 2,654.39 points, down 2.79% for the week (across four sessions), but rebounding 1.1% on Friday.
With buyers returning to 3 of the 4 systemic stocks (National Bank, Eurobank, Alpha Bank) and those of Cyprus and Optima Bank, it is most likely that lower support levels will be tested. The nearest support zone is in the 2,630–2,620 range; depending on the fluctuation of the EuroStoxx Banks index, this is the margin for defensive moves by long positions in the initial phase (during the first half-hour).
Turnover on Friday was €240 million, with €120 million concentrated in National Bank, PPC, Eurobank, and Piraeus Bank. The "battle" will center on banks, PPC, and 2-3 leading blue chips, with the dramatic rebound in oil prices potentially acting as a counterbalance to HelleniQ Energy and Motor Oil.
EuroStoxx Oil & Gas futures are at 603.73 points, trading at a premium following Friday’s discount, amid broad volatility.
HelleniQ Energy shares are at €10.30, Motor Oil at €39.94, with futures trending upward.
Motor Oil is set to issue a European bond (in Dublin); announcements will be made before the market opens.
With the mini sell-off on Wall Street causing concern—and due to the upcoming IPO for SpaceX—shorts have an advantage they will seek to exploit, starting today.
Additionally, European markets are pricing in the ECB’s imminent interest rate hike, with economists warning of the potential risk of repeating the mistake of 2011.
Between...Scylla and...Charybdis, to put it bluntly.