Market Intelligence

Equity Market Insight from Nasdaq MID - January 24, 2017

Tuesday, January 24, 2017, 12:31 PM, EST

  • NASDAQ Composite +0.3% Dow +0.3% S&P 500 +0.25% Russell 2000 +0.45%
  • NASDAQ Advancers: 1206 / Decliners: 923
  • Today’s Volume (100day avg): -6%

Corporate results are in focus this morning, while President Trump continues meeting with officials to support his “America First” motto. Material stocks are the best performing group, with the S&P Material Index higher 2%. The US Dollar Index (DXY) has fallen below 100 for the first time since early December. Oil prices are climbing on optimism that OPEC nations are complying with their output agreement.

  • Freeport (technical breakout), Mosaic (upgraded by Cowen), LyondellBasell and DuPont (earnings) are all surging higher this morning, helping the Materials sector outpace the broader markets. Homebuilders are also seeing nice gains (SPDR S&P Homebuilders +2%), led higher by DR Horton (earnings), and driving bullish sentiment for the rest of the peer group; LEN +5.2%, WLH +4.9%, TPH +4.5%.
  • On the economic front, US Existing Home Sales fell slightly (-2.6%) in December, but the yearly figure was at its highest level (5.45 million) since 2006. January’s Manufacturing PMI rose to 55.1 from 54.3 in December, as any reading above 50 suggests expansion.

Technical Take:

Existing home sales for the month of December came in slightly below expectations, however for full year 2016 sales were their strongest since 2006. December’s miss could actually be attributed to limited housing inventory which hit its lowest level since 1999. Accordingly the iShares homebuilder etf (ticker ITB) is up more than 3% today to $28.79. After robust gains of 78% and 17% in 2012 and 2013, the ITB has slowed down meaningfully over the ensuing three years with annual gains of 4%, 5% and 1% from 2014 to 2016. More recently in Q4’16 where many sectors and industries saw phenomenal gains following the US election, the ITB declined 0.25%. In January 2017 however the ITB is off to its best start in four years with a MTD gain of 4.55%. Today’s gains leave the ITB within 4% of a two-year resistance at the $29.50 - $30 range. A breakout above this resistance to multi-year highs would not only be bullish for homebuilding stocks, which would be emerging from a large, multi-year base, but may also signal new home construction is set to rise which would be a big positive for GDP.

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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