* Major averages mixed; Dow slightly green, Nasdaq weak
* Tech biggest loser among major sectors
* Social media stocks in focus
Sept 5 (Reuters) - Welcome to the home for real-time coverage of U.S. equity markets brought to you by Reuters stocks reporters and anchored today by Terence Gabriel. Reach him on Messenger to share your thoughts on market moves: terence.gabriel.tr.com@reuters.net
OPTIONS MARKET OVERPRICING VOLATILITY AROUND MIDTERM ELECTIONS (0305 PM EDT/1705 GMT)
September has traditionally been a volatile month for U.S. stocks and the options market is pricing in an understandably elevated level of volatility.
Analysts at Macro Risk Advisors (MRA), however, note that the options market is pricing a lot more stock gyrations for the October-November time frame, which will capture the U.S. midterm elections.
For SPDR S&P 500 ETF (NYSE:SPY) SPY.P , forward volatility for Oct-Nov is at 13.13, compared with 10.25 for the Sept-Oct period, MRA derivatives strategist Vinay Viswanathan said in a Wednesday note.
"While the seasonal effect of September is compelling, the Oct-Nov forward volatility appear overpriced relative to Sep-Oct given the historically diminished impact of midterms on both SPY and individual sectors," said Viswanathan.
Viswanathan recommends selling select SPY Oct-Nov put calendars to take advantage of the elevated volatility priced around the midterm elections.
(Saqib Iqbal Ahmed)
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STOCKS MIXED IN AFTERNOON TRADE (0216 PM EDT/1816 GMT)
Stocks remained mixed in afternoon trade with the Dow Jones Industrial Average .DJI clinging to a slight gain. The Nasdaq Composite .IXIC remains on the back foot. weakness in tech/social media shares is the primary drag on Nasdaq. The Solactive Social Media Total Return Index .SOCL remains down over 3 percent on the session.
The DJI, however, is receiving a boost from 3M (NYSE:MMM) MMM.N and Caterpillar (NYSE:CAT) CAT.N despite lingering concerns on trade.
7 of 11 major S&P 500 .SPX sectors are positive on the day. Defensive groups are leading.
Under the surface, however, oil services OIH.P and solars are struggling TAN.P .
(Terence Gabriel)
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S&P 500 INDEX: PEERING INTO THE FUTURES (0103 PM EDT/1703 GMT)
The S&P 500 index .SPX and CME E-Mini S&P 500 Futures EScv1 are both back down to flirt with their January highs.
Closing below these levels, which are now support, can potentially signal a significant reversal is underway on the charts.
On August 24, the SPX overwhelmed resistance at its January peak to close at a new record high. E-Mini Futures confirmed the thrust on August 27, also establishing a new all-time high.
That said, SPX only managed to extend an additional 1.5 percent over 3 trading days into an August 29 top. It has since retreated, as have the Futures.
A pullback could be normal back and fill provided the former resistance, now support, contains weakness.
However, the Futures fell to 2,877.50 earlier in the session. That put them below the former highs (2,887.50 on an intraday basis and 2,883.50 on a closing basis).
They have since bounced, but watch the close. Action in the Futures may portend a similar reversal in the SPX. Its low so far today is 2,876.92. This just ahead of the 2872.87 January 26 high (the SPX closed on its high that day).
(Terence Gabriel)
MAJOR AVERAGES MIXED IN MIDDAY TRADE; DOW INDUSTRIALS TURN POSITIVE (1220 PM EDT/1620 GMT)
The major averages are now mixed in midday trade as the Dow Jones Industrial Average .DJI has turned positive, and the S&P 500 .SPX has bounced off its early session low. CAT.N and 3M MMM.N actually underpinning Dow strength Wednesday amid simmering trade tensions.
Meanwhile, the Nasdaq Composite .IXIC is still off over 1 percent on the day. Nasdaq weighed down by weakness in tech/social media shares.
Tech is the biggest loser among SPX sectors. This with the Solactive Social Media Total Return Index .SOCL showing a loss of more than 3 percent.
That said, 7 of the 11 major SPX groups are higher in midday trade. Defensive sectors are leading with staples, utilities and real estate gaining.
(Terence Gabriel)
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S&P 3,350? SO SEES CREDIT SUISSE BY END OF 2019 (1104 AM EDT/1504 GMT)
Forget 3,000. Credit Suisse (SIX:CSGN) has its eye on the S&P 500 .SPX hitting 3,350 by the end of 2019.
The target, from Chief U.S. Equity Strategist Jonathan Golub, would mean 16 percent upside for the benchmark large-cap index over the next 16 months.
Golub acknowledges that earnings growth in 2019 will slow to 7.7 percent from 2018's tax-cut fueled 21.5 percent. But he says that stocks will get a higher valuation, with forward price-to-earnings ratio on the S&P rising to 18.1 times at the end of 2019 from 17.2 times at year-end 2018.
Golub says in a note that he believes the business cycle is "far more spry than many investors believe."
The majority of investors, he said, will focus on macro risks, such as trade concerns, mid-term elections and rising inflation, and the pace of the economy and corporate profits. But, writes Golub: "We believe the market's path will be determined by something much simpler ... the health and longevity of the business cycle."
(Lewis Krauskopf)
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STOCKS LOWER IN EARLY TRADE; TECH STUMBLES (1025 AM EDT/1425 GMT)
The major averages are lower in early trade with Nasdaq/technology shares bearing the brunt. Nasdaq Composite .IXIC is down more than 1 percent. This while the Dow Jones Industrial Average .DJI is giving back just 0.2 percent.
Sector action is mixed with 6 major S&P 500 .SPX groups lower, while 5 trade higher. Technology is the biggest loser, with social media shares under pressure.
This as executives from Facebook FB.O and Twitter TWTR.N face lawmakers. The Solactive Social Media Total Return Index .SOCL is falling more than 3 percent.
More defensive sectors are showing relative strength. Telecom and staples are gaining.
(Terence Gabriel)
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NASDAQ COMPOSITE: STARTING TO HUFF AND PUFF (0908 AM EDT/1308 GMT)
With CME Nasdaq 100 E-Mini Futures NQcv1 down in premarket trade, the Nasdaq Composite .IXIC can threaten to fall for a second straight day.
Indeed, the Composite's recent run to fresh record highs may have hit a wall. The index has so far topped on August 30 at an intraday high of 8133.30. The rise stalled just shy of a 7+ month resistance line (now at about 8150). (Click on chart below)
The rising 10-DMA of the Nasdaq new high/new low ratio .AD.O is nearing a range that includes its highs of the past year.
Thus, this measure of internal strength may also be near a point of exhaustion, and may threaten to roll over.
IXIC breaking Tuesday's low at 8042.14 can see pressure mount. The next support is at the late July-early August highs at 7933.31/7923.35.
(Terence Gabriel)
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FUTURES LOWER AMID GLOBAL WEAKNESS (0833 AM EDT/1233 GMT)
Futures show premarket losses amid global equity market weakness. Indeed, trade tensions still dominate as the U.S. and Canada resume talks. the Shanghai Composite .SSEC tumbled 1.7 percent overnight, putting support at its 2016 lows at risk again. European stocks remain heavy with the DAX .GDAX flirting with a 9-year support line.
Social media stocks should be in focus today as executives from Facebook .FB.O and Twitter TWTR.N face Congressmen over what they see as a failure to combat foreign efforts to influence U.S. politics. Despite fresh S&P 500 .SPX record highs in late August, the Solactive Social Media Total Return Index .SOCL remains down more than 15 percent from its March peak.
In terms of data, the July U.S. trade deficit was a reported $50.1 billion, slightly shy of the $50.3 billion dollar forecast in a Reuters poll.
Here is your premarket snapshot:
(Terence Gabriel)
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<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Gabriel0905
https://reut.rs/2NS4BSy Premarket09052018
https://reut.rs/2oK0GfM IXIC 0905 2018 B
https://reut.rs/2oJuaKN early0905 2018
https://reut.rs/2wKCAGf Credit Suisse S&P 500 targets
https://tmsnrt.rs/2oJeYx4 Midday0905 2018
https://reut.rs/2oHlMLN ESSP09052018
https://reut.rs/2oHTjFv Afternoon09052018
https://reut.rs/2NQNNeL
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