Equity Market Insight from Nasdaq MID - November 28, 2017

Tuesday, November 28, 2017, 10:43 AM, EST

  • NASDAQ Composite +015% Dow +0.35% S&P 500 +0.32% Russell 2000 +0.48 % S&P MID 400 +0.35%
  • NASDAQ Advancers: 1367 Decliners: 1013
  • Today's Volume (100 day avg) -14%

The markets seems ready to shake off the turkey induced slumber that seemed to hang over yesterday's trading. The Dow and S&P are marking new records in a generally quiet session. With the exceptions of REITs all sectors are in the green with Energy (+0.63%) and Telecom (+0.60) leading gains. The dollar is a little higher, treasuries stronger, gold off 0.2% and crude oil down slightly. The calendar today is full of Fed Speak, economic data and some public posturing by congress members on their intentions regarding the tax bill that should come to a vote later this week.

  • The senate will be holding a hearing on the appointment of Mr. Powell for Fed Chair that has the potential to provide some headline flow but most likely we should be able to conclude that there will be solid continuity in this transition at the top on the FOMC.
  • Crude oil trades lower for a second day ahead of OPEC's meeting on Thursday . It is expected the cartel will extend production cuts by 9 months but Russia is a key holdout thus far. WTI crude hit a multi-year high on Friday and some analysts think that if the production deal is extended as expected, it might become a 'sell on the news' event. In the meantime inventory data is due tomorrow and is expected to show a modest drawdown along with small increases in gasoline and distillates.
  • U.S. wholesale inventories widened in October as inventories fell. The Commerce Department said that merchandise-trade deficit fell more than projected to $68.3 billion from an expected 64.9 billion which is the widest gap in over 2 years. With exports decreasing and imports increasing, economists could prompt economists to lower their Q4'17 US GDP numbers.
  • The November Consumer Confidence Index reading was released this morning showing an unexpected increase to 129.5 (vs. consensus 124.0) from October's revised reading of 126.2 (from 125.9). The November reading marks the fifth consecutive month of gains and the highest level in 17 years.
  • M&A continues to be in the spotlight this Tuesday, with Buffalo Wild Wings (NASDAQ: BWLD) agreed to a sale to Arby's Restaurant Group, Inc. which is majority owned by affiliates of Roark Capital Group (Roark), an Atlanta based private equity firm that focuses on investing in franchised and multi-unit businesses in the restaurant, retail and other consumer sectors for $157 a shares in cash for a total valuation of $2.9 billion. M&A has been very active YTD with over $4.9 trillion of announced or proposed deals globally and $2.2 trillion of those taking place in North America.

Technical Take:

As the US markets head into the final month of the calendar year, the major indices are poised to post double digit percentage gains. Despite the strong performance this year by US equities, they still lag the robust gains for emerging markets. The iShares MSCI Emerging Market ETF is currently up 36% YTD and if current trends continue will outpace the S&P 500 by the largest margin since 2009. Investors appear to be attracted to the increasing optimism for global growth, a weakening US Dollar and supportive commodity prices. Morgan Stanley reaffirmed its positive stance on Emerging Markets and stated "The end of the bull market for EM is not yet in sight, despite the recent wobbles."

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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.