Equity Market Insight from Nasdaq MID - December 19, 2017

Tuesday, December 19, 2017, 11:45 AM, EST

  • NASDAQ Composite -0.37% Dow -0.16% S&P 500 -0.10% Russell 2000 -0.04% S&P MID 400 -0.05%
  • NASDAQ Advancers: 1073 Decliners: 1142
  • Today's Volume (100 day avg) -6%

US stocks are unable to hold onto yesterday's surge higher, while the Tax overhaul appears to be moving forward and a vote to pass the bill by the house/senate will likely happen within the next couple of days. For only the 2 nd time in the past nine sessions, the Dow is lower and failing to move above 25k. Utility stocks are down again this morning, off by 0.76%, with the S&P 500 Utilities Index on pace for its worst 2-day performance (1.9%) since mid-September.

  • Minneapolis Fed President Neel Kashkari opposed the most recent rate hike. He believes as stagnant inflation is falling short of the target that would justify rate increases and hawkish commentary from the committee. He highlights a flattening yield curve as an indicator that inflation expectations are below target. Also, Dallas Fed President, Robert Kaplan, made cautious comments of further rate increases while the US Debt to GDP is unsustainable.
  • After a sharp decline in early December, the Bloomberg Commodity Index has seen five consecutive days of upside, helped by strong advances in Copper and Gold. Oil is little changed in December, after three consecutive months of >4% MoM gains. Traders are expecting to see US inventories fall for the 5 th straight week in tomorrow's EIA report, as oil producing countries continue to curb production. Evercore ISI has raised its forecast for 2018, and 2019 by $5, to $65 and $70, respectively.

Technical Take:

Treasury rates are spiking higher today, particularly on the long end of the curve where the 10-yr Yield is up 5bps to 2.45%. The 2.40% - 2.43% zone has bene a key resistance level for the last nine months going back to the middle of March. There was one session in mid-October where the long yield closed above this zone but it was a one hit wonder that failed to hold. This time could be different as the yield has been holding a clearly defined support line in place for eight weeks. This rising support is now converging closely towards the resistance zone indicating a resolution of the current consolidation, up or down, should be soon. In addition last month saw a "golden cross" where the 50-day sma crossed above the 200-day sma, historically seen as a bullish signal.

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.

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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