* All three major U.S. stock indexes down sharply
* All major S&P sectors red; financials fare worst
* European indexes close down 1.6%
* Crude, dollar, gold gain; bitcoin down >4%
* U.S. 10-yr note yield ~1.46%
June 18 - 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
WORK FROM WHERE? CLUES FROM NEW YORK (1320 EST/1720 GMT)
The shift to working from home during COVID-19 was one of the biggest pandemic-inflicted changes. As lockdowns are lifted, it remains to be seen how permanent these changes to work will be.
Surveys of firms across New York and northern New Jersey conducted by the New York Federal Reserve could provide some insight into how businesses plan to navigate the post-pandemic landscape.
"Once the pandemic is fully behind us, service firms expect double the amount of remote work than before the pandemic ... while manufacturers expect the amount of remote work to return to where it was before the pandemic," NY Fed researchers wrote in a note
To calculate the amount of remote work done for each firm, researchers multiplied the share of workers working remotely by the average percentage of time they worked.
A "hybrid" model, where workers split their week between home and the office, seems to be the winner of the work-from-home experiment -- at least for service jobs.
On average, NY Fed surveys found regional service firms expect about a quarter of their staff to work remotely for around three days per week. This would bring the average of work done remotely to 16%, double its pre-pandemic share.
Interestingly, national surveys indicate a divergence between the hours employees want to work from home and what employers plan to allow.
The researchers also noted some evidence that remote working numbers could be higher in New York City, especially in Manhattan.
A shift away from office work could have interesting implications for real estate investment trust (REITs), particularly those focused on New York properties.
So far, shares of trusts such as New York City REIT , SL Green Realty Corp , and Empire State Realty Trust
have posted gains of between 27% and 61% year-to-date.
(Lisa Mattackal)
*****
U.S. CHIP STOCKS TUMBLE IN END TO A POOR WEEK (1226 EDT/1626 GMT)
U.S. chip stocks are tumbling on Friday, ending the week worse than where they began in a stark difference to a surge on Monday that briefly elevated the Philadelphia Semiconductor Index to a seven week high.
The SOX was down over 2% at mid-day, and it's now on track to lose more than 1% for the week.
Along with other growth stocks, chips have been out of favor for much of the past two months, but they have regained some ground in recent weeks, along with the Nasdaq .
Even after this week's poor showing, the SOX is still up 13% in 2021, marginally better than the S&P 500's 11% rise.
Weighing more than any other stock on the chip index, Intel
dropped 3.2% after Jefferies cut its price target on the company, with analyst Mark Lipacis saying in a client note that he expects greater competition from rivals Advanced Micro Devices and ARM.
Advanced Micro and Nvidia were the only two SOX components in positive territory, with Nvidia jumping 3.3% after BofA Global Research raised its price target on the graphics chipmaker, describing the company in a client note as a "One-stop-shop for AI processing."
(Noel Randewich)
*****
BULLARD BUMMER PUTS WALL STREET ON TRACK FOR WEEKLY LOSS (1205 EDT/1605 GMT)
U.S. stock indexes were sharply lower but up from session lows by the session's mid-day mark Friday amid a sell-off prompted by the one-two punch of Wednesday's more hawkish than expected Fed statement and comments by St. Louis Fed president Bullard that suggested the central bank is preparing take a more proactive approach to current inflationary pressures.
Those concerns also prompted long-dated U.S. Treasury yields to drop and the yield curve to flatten.
That, in turn, caused interest rate-sensitive financials
to suffer the biggest percentage loss among the 11 major S&P sectors, all of which were red.
Today's sell-off puts all three major U.S. stock indexes on track to post losses from last Friday's close, at the conclusion of a week that had been muted and range-bound.
Here is your mid-day snapshot:
(Stephen Culp)
*****
BULLS AND BEARS CHASE INVESTORS FROM THE FENCE (1015 EDT/1415 GMT)
An uptick in bullish short-term outlook among individual investors helped pull neutral sentiment, or expectations that stock prices will be essentially flat over the next six months, back from recent highs.
The American Association of Individual Investors' (AAII) most recent sentiment survey showed bullish sentiment increasing by 0.9 percentage points to 41.1%, with optimism remaining well above its 38% historical average, where it's been for 26 of the most recent 31 weeks.
At the same time, the bears also rebounded from what the AAII calls "an unusually low level," jumping 5.5 percentage points to 26.2%. But even with that increase, near-term pessimism remains below its 30.5% historical average, where it's been for 19 straight weeks.
Together, the bulls and bears pulled neutral sentiment down from its highest reading since January, shedding 6.4 percentage points to 32.7%.
With these changes, the bull-bear spread fell to +14.9 from +19.5 last week:
This week, the question AAII asked its survey respondents how the passage of an infrastructure bill might affect their outlook for the stock market.
Two out of five participants said it would positively shape their outlook, while 10% said it could be a positive "if paid for in an effective manner and spent on the right things," AAII's note says.
Those who said an infrastructure bill would have minimal to no impact, and those who believe the inflationary effects would be a net negative, came in at 19% and 16%, respectively.
(Stephen Culp)
*****
EUROPE: FURTHER ROOM TO RUN? (1015 EDT/1415 GMT)
With European equities heading into their worst day in around one month, last falling almost 1.5%, one may start to doubt about whether the region's stocks have further room to run from current record high levels.
But BofA remains upbeat and sees near-term upside driven by cyclical outperformance.
"Our macro projections are consistent with a further 5% upside for European equities by Q3, as the boost from accelerating growth is partly offset by the drag from higher real bond yields," strategists at the U.S. bank say.
"Strong growth and rising bond yields should also drive further double-digit outperformance for financials, cyclicals versus defensives and value versus growth over the coming months," they add.
Regarding downside risks, BofA points to three key ones: an earlier peak in the cycle, delayed reopening because of the Delta variant and a bond tantrum.
In the chart you can see the pan-European STOXX 600 equity benchmark set for its worst day since May 19.
(Danilo Masoni)
*****
A 2021 RARITY -- S&P 500 BEATING BOTH ITS BRETHREN (0943 EDT/1343 GMT)
Nearly halfway through the year and something unusual is shaping up in the market: the S&P 500 is beating both its rival U.S. indexes.
As of Thursday's close, the S&P had gained 12.4%, just outstripping the 10.5% gain for the Dow Jones Industrial Average
and the 9.9% gain for the Nasdaq Composite .
While the S&P is widely used as the benchmark for the overall stock market, it has not beaten both of those other signature stock indexes in a year since 2005. That year, the S&P's 3% gain was enough to top the Nasdaq (+1.4%) and the Dow (-0.6%).
Sector composition could be one factor behind the S&P's relative success in 2021.
For example, energy and real estate were logging the biggest year-to-date gains among the S&P's 11 sectors. Those sectors have a combined 5.5% weight in the S&P versus only 2.1% in the Dow and 1.47% in Nasdaq, per Refinitiv data.
Meanwhile, the relatively sluggish year for tech and other growth stocks have kept the Nasdaq in check, after it surged 43.6% and 35.2% the prior two years.
(Lewis Krauskopf)
*****
U.S. STOCK FUTURES TURN RED AFTER BULLARD BOMB (0833 EDT/1233 GMT)
U.S. equities futures headed south early Friday after James Bullard, president of the St. Louis Federal Reserve, revealed he was among the seven Fed officials who see rate hikes in the cards next year, citing hotter-than-expected inflation.
Those remarks follow the U.S. Federal Reserve's hawkish shift at the conclusion of its two-day monetary policy meeting on Wednesday, which Fed Chair Jerome Powell referred to as the "talking about talking about" meeting, hinting that the central bank could tighten its dovish policy sooner that many market participants anticipated.
Bullard's comments also sent the CBOE Volatility index
to its highest level in nearly a month.
As of Thursday's close, the S&P 500 and the Dow
were on course to post weekly losses after a run of underwhelming economic data, and dearth of obvious market moving catalysts, which have kept markets muted and range-bound.
Today is also quadruple witching day, when stock futures/options and index futures/options expire, which can result in heightened volatility, particularly on a summer Friday that has recently been named a federal holiday to honor Juneteenth.
Here's your premarket snapsnot:
(Stephen Culp)
*****
FOR LIVE MARKET POSTS PRIOR TO 0900 EDT/1300 GMT, PLEASE CLICK HERE:
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ premarket snapshot S&P 500 vs Dow, Nasdaq in 2021 STOXX Investor sentiment Midday update
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>