Friday, September 21, 2018, 10:36 AM, EST
- NASDAQ Composite -0.14% Dow +0.18% S&P 500 +0.15% Russell 2000 -0.09%
- NASDAQ Advancers: 974 Decliners: 1248
- Today's Volume (First Hour) +38.6%
The market rally extended overseas as Asian and European markets trade higher and China is the stand out with the Shanghai Composite up 2.5% overnight. Markets in the US opened higher for a third session, although the Nasdaq and R2K indices have drifted slightly into the red on profit-taking. It is expected to be a busy session for traders - today is the quarterly quad-witching expiration for options and futures contracts, rebalance of the S&P indexes. Also, the new S&P Communications Sector launches at the close in what is the largest sector shift since 1999. Yesterday was the only day this week with market volumes a little above average, and today's volume should be higher still. Otherwise there is little new in the headlines or on the trade front. Most sectors are higher with Energy the clear leader with a near 1% advance, but Financials are off 0.4% after three daily gains. Treasury yields are slight higher this morning ahead of next week's FOMC meeting. Both the dollar and Chinese yuan are slightly higher, gold is off 0.5% and WTI crude is 1.8% higher.
- Prime Minister Theresa May says U.K. and E.U. "are at an impasse" in Brexit talks, says staying in the Single Market would make "mockery" of referendum. The British Pound dropped below $1.31. The UK is set to leave the EU in March, deal or no deal.
- Oil prices are rising this morning ahead of an OPEC meeting with another large exporters Sunday in Algeria that will discuss how to allocate higher supply to offset the shortage of Iranian supplies. This meeting however is unlikely to change production policy already in place. Both Saudi Arabia and Russia boosted production ay about 600k bpd in June, but at the same time output from Iran and Venezuela is in decline.
Technical Take: Commodities Rallying along with China
The Shanghai Composite is amongst the top performing global indices today with a gain of 2.5%. In the early August MID BLOG we first highlighted the major support level the SHCOMP was then approaching. Six weeks later we noted in last week's MID BLOG how the SHCOMP Index was still holding above this support major and was poised to narrow the performance gap with the US. This week the SHCOMP gained 4.3%, its best weekly performance in two and half years (March 2016). If this is the early stages of a Asian rebound, commodities are likely to perform well with it. The Bloomberg Commodity Index (BCOM) gained 2.5% for its best weekly gain since January. The below weekly period chart shows it bouncing off clearly defined support in place for most of the last two years. The reflation trade appears to be back in vogue and looks to have some legs.
Click the image for larger view
Nasdaq's Market Intelligence Desk (MID) Team includes:
Charles Brown is Associate Vice President on The Market Intelligence Desk with over 20 years of equity capital markets experience. Charlie has extensive knowledge of equity trading on both floor and screen based marketplaces. Charlie assists with the management of The Market Intelligence Desk and works with Nasdaq listed companies providing them with insightful objective trading analysis.
Steven Brown is a Managing Director on the Market Intelligence Desk (MID) at Nasdaq with over twenty years of experience in equities. With a focus on client retention he currently covers the Financial, Energy and Media sectors.
Christopher Dearborn is a Managing Director on the Market Intelligence Desk (MID) at Nasdaq. Chris has over two decades of equity market experience including floor and screen based trading, corporate access, IPOs and asset allocation. Chris is responsible for providing timely, accurate and objective market and trading-related information to Nasdaq-listed companies.
Brian Joyce, CMT is a Managing Director on the Market Intelligence Desk (MID) at Nasdaq. Before joining Nasdaq Brian spent 16 years as an institutional trader executing equity and options orders for both the buy side and sell side. He also provided trading ideas and wrote technical analysis commentary for an institutional research offering. Brian focuses on helping Nasdaq's Financial, Healthcare and Transportation companies, among others, understand the trading in their stock. Brian is a Chartered Market Technician (CMT).
Michael Sokoll, CFA is Associate Vice President on the Market Intelligence Desk (MID) at Nasdaq with over 25 years of equity market experience. In this role, he manages a team of professionals responsible for providing NASDAQ-listed companies with real-time trading analysis and objective market information.