Monday, July 18, 2016, 12:31 PM, EST
- Dow +0.02% S&P 500 +0.2% NASDAQ Composite +0.5% Russell 2000 +0.2%
- NASDAQ Advancers: 1151/Decliners: 1070
- Today’s Volume: -15%
Market Update
For the 3rd consecutive week, US equities posted weekly gains more than 1%, as the DOW and S&P 500 now hovering at all-time highs. Traders will be watching the 1st round of large-cap companies to report results, with 91 of the S&P 500 slated to release earnings this week, while chatter from the Republican National Committee will also likely grab some headlines. Info Tech (+0.75%) and Consumer Discretionary (+0.5%) are the best performing sector, while Energy stocks (-0.5%) are weighing on equities.
- Earnings season picks up this week and traders will shift their attention back to corporate results from economic and global events. To date, 39 of the S&P 500 members have reported with an earnings surprise beat of 3.94%. With nearly 100 of the S&P 500 members reporting this week, the WSJ reported that “(Many) of the biggest U.S. companies will report results this week, giving a clearer picture of what is expected to be the fourth straight quarter of declining profits. Based on analysts' forecasts for companies in the S&P 500 index, Thomson Reuters predicts adjusted earnings per share for the second quarter will be down 4.7% from a year earlier, following a 5% drop in the first quarter. Revenue, meanwhile, is expected to slip 0.8%, marking the sixth straight quarter of declines…” Will this be enough to drive market higher or cut short this impressive market rally? Earnings Calendar; Netflix (Today PM), Microsoft (Tuesday PM), Intel (Wed PM), Ebay (Wed PM), QUALCOMM (Wed PM) and Starbucks (Thursday PM).
- The semiconductor space is getting a boost today (SOX Index +1.6%), after ARM Holdings announced they will be acquired for $32 billon by Softbank and marking the first transaction since the UK’s decision to leave the EU. 28 of the 30 Philly Semi constituents are higher today, as chip investors are attempting to peg the next company to be acquired.
- Turkey’s failed coup attempt is not really impacting stocks today. As noted above, the US market is marginally higher, while the MSCI Emerging Markets Index is also slightly in the green.
Technical Take:
In a “risk-off” move immediately following the late-June Brexit results, the US dollar basket rose sharply above a five month downtrend line. It has since spent the ensuing three weeks holding those gains and consolidating along its 200-day simple moving average (sma). A convincing move above this resistance could lead to a resumption of the uptrend which began in early May when the USD made its 52-week low. It will be interesting to see how the broader equity markets react if the US dollar sees an upside breakout. In particular commodities tend to have a negative correlation to a strengthening USD.
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.
