US OPEN: Risk aversion prevails on Wall Street

• Indices started today's session with declines
• First Republic Bank (FRC.US) shares and financial sector companies are losing ground
• Fanni Mae estimates weaker banks could prove catalyst for US recession
• Activision Blizzard (ATVI.US) gains on lenient stance from UK regulator
• Uranium Energy Corp (UEC.US) under pressure following a report from the company's shorting fund Kerrisdale

The start of today's session on Wall Street brings a drop in indices. The European session was held in a very weak mood due to concerns surrounding Deutsche Bank (DBK.DE), for which credit default swaps rose powerfully. Once again, First Republic Bank (FRC.US) opened the session with declines, its rating being downgraded again yesterday by Moody's. Despite optimistic comments for the economy by Atlanta Fed chief Bostic, who stated that a recession is unlikely and the health of US banks is healthy, the US dollar and major benchmarks came under pressure.

Analysts at Fannie Mae, who see the banking crisis as the catalyst for an economic slowdown, were cautious about the US economy. Durable goods orders came in below market expectations, but PMI indices soured, signalling an increase in business activity in the US. The industrial index came in at 49.3 versus 47 expectations and 47.3 previously, while the services PMI came in at 53.8 versus 50.3 expectations and 50.6 previously. Large swings are taking place in the bond market, sending a potential alarm signal to the market ahead of a higher probability of economic recession.

S&P 500 index categorised by sector and industry. Size indicates market capitalisation. Source: xStation5

On the chart of the US500, we can see a bullish inverted head-and-shoulders formation, but demand may struggle to overcome the SMA200 (red line). A decline towards 3900 points (61.8 Fibo retracement, previous price reactions) could negate the formation and confirm the definitive dominance of the sellers. Source: xStation5

Company news:

Uranium Energy Corp (UEC.US) shares are losing because Kerrisdale Capital took a short position on the company's shares and shared with the market a report that showed the mining company's business in a negative light. On the other hand, however, recent analysts at Sprott, a Canadian fund that operates in the commodities market, spoke positively about the company. The company has the largest portfolio of ISR (in-situ) mines in the US and extensive contacts among politicians and the industry, and is the largest uranium company in the US. With deglobalization on the rise, thanks to its portfolio located in North America, its products may be chosen for, among other reasons, a safer supply chain although fundamental valuation, especially the C/Z ratio, indicates overvaluation.

Uranium Energy Corp (UEC.US) shares, D1 interval. A deeper decline below the 61.8 Fibonacci retracement of the upward wave that began in spring 2020, at $2.72, could herald a retest of the 71.8 level, closer to $2 per share. Source: xStation5

Momentus (MNTS.US) gains 7% as the company shared the initial technical success of the Vigoride-5 space transportation vehicle. Successful testing in Earth orbit promises that the company's next step will be to test the highly anticipated Microwave Electrothermal Thruster (MET).

Activision Blizzard (ATVI.US) is up 6% as the UK regulator dismissed key concerns around the company's acquisition by Microsoft (MSFT.US). The UK Competition and Markets Authority narrowed the scope of its antitrust investigation.