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LIVE MARKETS U.S.-2020 Megatrends: It has paid to have your head in the clouds

Wed 15th January, 2020 3:47pm
* U.S. stocks up early; market awaits Phase-1 trade deal details * Utilities lead gains among sectors; energy, financials lag * Dollar, oil dip; U.S. 10-year yield ~1.79% Jan 15 - Welcome to the home for real-time coverage of U.S. equity markets brought to you by Reuters stocks reporters and anchored today by Caroline Valetkevitch. Reach her on Messenger to share your thoughts on market moves: 2020 MEGATRENDS: IT HAS PAID TO HAVE YOUR HEAD IN THE CLOUDS (1026 EST/1526 GMT) Although it's early in the new year, ETFs that can capitalize on 2020 megatrends are showing some clear winners and losers compared to the overall market.*:nL4N29F34B*:nL1N28Q0NJ Indeed, with more attention being focused on emerging megatrends, investors may be honing in on some niche themes within the market including cloud computing, 5G wireless*:nL4N29J2WE, self-driving cars/electric vehicles, internet-of-things (IoT) and quantum computing*:nCNWfSY7Va. Additionally, robotics, cannabis and sustainable agriculture can be considered other emerging megatrends. So far in 2020, pot stocks and cloud computing have been the go-to groups. The ETFMG Alternative Harvest ETF MJ.P (cannabis) has been volatile, initially falling more than 5%, but quickly reversing and now posting a 7.4% gain, beating the S&P 500's .SPX 1.9% rise by more than 500 basis points. MJ is closely followed by the First Trust Cloud Computing ETF SKYY.O with a 6.9% gain. Next in line is the Defiance Quantum ETF QTUM.P (quantum computing) (+3.5%) and then the ROBO Global Robotics and Automation Index ETF ROBO.P (+2.9%). The iShares Self-Driving EV and Tech ETF IDRV.P (+2.3%) and the Defiance Next Gen Connectivity ETF FIVG.P (+2%) round out those megatrend ETFs, beating the S&P 500 early in the new year. The underperformers so far include: The Global X Internet of Things ETF SNSR.O (1.2%) and the Defiance Next Gen Food & Agriculture ETF DIET.P (+0.6%) (Beyond Meat BYND.O is a small holding). Here is a YTD relative performance chart of these ETFs rebased to 1.00 using the S&P 500 .SPX as the base (above the gray line are outperformers, below are underperformers): (Terence Gabriel) ***** STOCKS UP EARLY AS TRADE DEAL AWAITED (1000 EST/1500 GMT) Major indexes are gaining in early trading on Wednesday, with the Dow and S&P 500 reversing slight losses at the opening. Investors await the release of details of the initial U.S.-China trade deal. Financials .SPSY were lower and among the big biggest drags, with shares of Goldman Sachs GS.N down 0.4% after disappointing results. Health care .SPXHC , up 0.8%, led the S&P 500 higher. (Caroline Valetkevitch) ***** TRADERS GO FOR THE FAST MONEY (0908 EST/1408 GMT) U.S. stock index futures are roughly flat on Wednesday ahead of the release of U.S.-China Phase-1 trade deal details. .N Indeed, given the recent push to fresh record highs, traders wonder if it's just been a case of "buy the rumor, sell the news." In any event, traders have been taking advantage of a lot of quick rallies in beaten down names. One trader said, "Whether it’s a Tilray, SmileDirect or Beyond Meat, there's been a lot of fast money swing trading going on."*:nL4N2971NW*:nL4N29K2RA*:nL1N29K0E7 Nevertheless, there is a sense that the market is extended and due for a selloff. Although, one trader remarked, "It seems as if the new selloff is sideways action. We are digesting the rallies well and holding onto a majority of gains." As for X-factors, Iran remains a focus, despite the recent calming of tensions. Traders remain on guard for rumors or events that could trigger volatility, or indeed, a fast-market retreat that could easily turn into a sustained decline. Regarding impeachment, the general consensus on one floor seems to be that it's a non factor. However, the traders are taking note of the rise of Bernie Sanders in the polls, and they believe that has the potential to really rattle things.*:nL1N29F1BH*:nL1N29K06A In terms of market sectors, tech has been grabbing the spotlight, but traders are liking financials. As one trader puts it: "They are just starting to break out on the charts on a longer-term basis. They’ve gotten a bit over extended over the near term, but may present a good buying opportunity on a dip." (Terence Gabriel) ***** <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ US stocks morning snapshot rebase01152019 ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>


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