Market Intelligence

Equity Market Insight from Nasdaq MID - December 27, 2016

Tuesday, December 27, 2016, 12:47 PM, EST

  • NASDAQ Composite +0.73% Dow +0.17% S&P 500 +0.37% Russell 2000 +0.54%
  • NASDAQ Advancers: 1434 / Decliners: 680
  • Today’s Volume (100day avg): +3%

Stocks opened the final week of trading for the year modestly higher with the Nasdaq Composite leading the way with a 0.7% gain. Tech (+0.7%) and Healthcare (+0.6%) are the top sectors while rate sensitive Utilities and Telecom sectors trade lower. Crude oil (+1%), the dollar (+0.1%) and gold (+0.6%) are also trading higher. Dow 20,000 remains elusive for now with the index needing another 31 points to reach that milestone.

  • A report from Goldman highlights increased share buybacks through mid-December compared to 2015. The reports notes the value of buybacks increased about 71% despite a slow start earlier in the year. Expected corporate tax cuts and a tax-repatriation holiday could bring large amounts of cash back into US corporate coffers, and that could bode well for buybacks next year according to the WSJ.
  • Although we still have a few days to go, the old axiom ‘As January Goes, so Goes the Year’ will likely prove incorrect this year. The S&P is up a healthy 11% year-to-date despite losing over 5% back in January. Looking to 2017, the WSJ notes the consensus outlook is ‘the most muted in over a decade.’ A survey of fifteen analysts peg the S&P at 2,356 by the end of 2017, meaning they expect index will only gain 84 points or 3.7% from today’s prices. One factor to consider – the S&P’s 6% post-election rally leaves next year’s outlook rather muted.
  • Consumer confidence rose to its highest levels since August 2001. The Conference Board’s Consumer Confidence Index rose to 113.7 for December, well ahead of expectations. The Board notes that the increase was mostly driven by the Expectations Index in a reflection of post-election optimism.

Technical Take

The Nasdaq Biotech Index is having another solid session gaining as much as 1.2%, following a robust 2.24% gain on Friday, December 23rd. This two-day move has covered nearly the entire 2,770 – 2,890 “Trump Gap” created on the day following the US election back on November 9th. Gaps are notorious for acting as future levels of support and resistance and this has been the case here as the NBI has been range-bound within this band for the entire month of December. Despite the major US equity indices trading near all-time highs, biotechs continue to underperform and the NBI Index remains more than 20% below its 52-week highs. If the NBI can get back above the 2,890 resistance, it could be the start of a new uptrend back towards the November highs at 3,075 followed by the 2016 highs at 3,154. At those levels there will be increasing talk of a large inverse head & shoulder pattern building since early August, however let’s first see the NBI index get through the 2,890 resistance.

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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