Equity Market Insight from Nasdaq MID - December 18, 2017

Monday, December 18, 2017, 11:45 AM, EST

  • NASDAQ Composite +0.55% Dow +0.7% S&P 500 +0.50% Russell 2000 +1.2% S&P MID 400 +1.1%
  • NASDAQ Advancers: 1653 Decliners: 632
  • Today’s Volume (100 day avg) -6%

US stocks are gaining this morning on the heels of an agreement amongst Republicans to shape the tax bill. European equities jumped higher as well, as companies with heavy exposure to the US appear to be seeing the most upside. The bank sector is the top performing group and one of the top benefactors of tax reform. More than 85% of the S&P 500 is in the green which is once again moving to an all-time high.

  • The tax reform bill is expected to pass this week in both the House and Senate, which will then be signed by President Trump. This is the first major tax overhaul in 30 years and has provided a strong tailwind for equities, particularly the Dow Jones Industrials Index. Since 12/8, the blue-chip index has experienced 4 triple digit daily gains and appears to have the 25k milestone in its sight. It is also having its best trading since 1995.
  • Merger & Acquisition activity is strong coming into year-end. YTD, announced, proposed or completed M&A deals have totaled $5.3 trillion globally which is up 12.4% from 2016 with nearly $2.4 trillion in North America alone. Current deals announce this Monday included include Snyders-Lance (NASDAQ: LNCE) agreeing to be acquired by Campbell Soup (CPB) for $50 a shares in a cash. Also in the snack space was Hershey(HSY) announcing a $12 cash bid for Amplify Snack Brands (BETR) who has only been a public company for a little over 2 years. Pinnacle Entertainment(NASDAQ: PNK) agreeing to be acquired by Penn National Gaming(NASDAQ: PENN) in a stock and cash deal valued at $2.8 billion, to name a few.

Technical Take:

With just two weeks left in 2017, the S&P 500 index gapped higher on today’s open to fresh all-time highs. Today’s 0.6% gain has lifted its YTD return to 20.3%. This is only the second time this decade the SPX has gained 20% or more. Underlying breadth is strong with 75% of the members trading above their 50-day simple moving average (sma) and 80% trading above the 200-day sma. In addition the S&P 500 equal weight index is up 16.9% YTD which lags the cap-weighted SPX by just 310bps. This confirms that while the largest members are outperforming, the average member is having a very strong year. With all the milestones and records reached in 2017, the S&P 500 is having its 2nd best month here in December and it is now just eight points away from 2,700. Whether it’s the “Trump Bump”, the global recovery, stable dollar at weak levels, easy credit, etc, stocks are having a banner year.

Please see Nasdaq Revitalize page, where we make recommendations about improvements to the capital markets to promote growth, innovation, job formation and wealth creation. We welcome your feedback on our proposals to reduce burdens on companies with proxy reform, short sale disclosure, and tax, litigation & disclosure reform.

Nasdaq's Market Intelligence Desk (MID) Team includes:

Michael Sokoll, CFA is a Senior Managing Director 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.

Jeffrey LaRocque is a Director on the Market Intelligence Desk (MID) at Nasdaq, covering U.S. equities with over 10 years of experience having learned market structure while working on institutional trading desks and as a stock surveillance analyst. Jeff's diverse professional knowledge includes IPOs, Technical Analysis and Options Trading.

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.

Annie O'Callaghan is Director on the Market Intelligence Desk (MID) at Nasdaq. Annie has worked for NASDAQ in a variety of roles including support of Nasdaq C-level management in client retention and customer service. Annie also served as a Sales Director in Nasdaq’s Transactions Services business. Prior to joining Nasdaq, Annie worked at AX Trading, managing accounts for its Alternative Trading System and served on Credit Suisse's trading desk as an Electronic & Algorithmic Sales Trading Analyst.

Brian Joyce, CMT has 16 years of trading desk experience. Prior to joining Nasdaq Brian executed equity orders and provided trading ideas to institutional clients. He also contributed technical analysis to a fundamental research offering. Brian focuses on helping Nasdaq’s Financial, Healthcare and Airline companies among others understand the trading in their stock. Brian is a Chartered Market Technician.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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