Market Intelligence

Equity Market Insight from Nasdaq MID -- September 26, 2016

Monday, September 26, 2016, 10:53 AM, EST

  • NASDAQ Composite -0.6% Dow -0.7% S&P 500 -0.5% Russell 2000 -0.5%
  • NASDAQ Advancers: 611 / Decliners: 1512
  • Today’s Volume: -10.5%

US Stocks fell following Europe as Deutsche Bank was down sharply on speculation it will need to raise additional capital. The Euro Stoxx 50 Index fell 1.6% in early US trading while the FTSE, DAX and CAC 40 were all down by similar amounts heading into the regular session here. Meanwhile the European STOXX 600 Banks Index has declined 2.5%. US stocks are coming off its largest weekly gain since mid-July, as the Nasdaq Index touched an all-time high on Thursday. Only the Energy and Materials sectors (see oil comment below) are in the green today, with the other nine trading lower.

  • S&P 500 earnings are seen contracting for sixth straight quarter -WSJ - the longest slump since the data started being tracked in 2008; as recently as 3 weeks ago, analysts estimated earnings growth would return to positive territory by Q3. Analysts are now predicting a 2.3% decline in 3Q year over year. Much of the earnings negativity comes from the energy sector and revenue growth is set to return in the S&P 500 for the first time since the end of 2014. Low interest rates are supporting the markets of course, but earnings growth will need to take over at some point.
  • All eyes are on the debate tonight with reports that as many as 100 million people could tune in. Some of this super-bowl sized audience will tune in for the “entertainment” value but as many as 1/3 of these potential voters many not have fully decided which way to go. This has the market a little skittish. A Clinton victory has been largely factored in by the market, which can generally judge the policymaking that will come from a Hillary victory. A Trump win (Vegas odds makers give him a 28% chance) could introduce more uncertainty, which the markets generally do not like.
  • Fact of the day: Over the last 40 years (since 1976), the poll leader after the first Presidential debate won the election every time. (per Deutsche Bank)
  • Reports that Saudi Arabia might be willing to curb output is supporting oil prices, with Crude back above $45 this morning.
  • In merger news, The operator of the CBOE will buy Bats Global Markets Inc. for about $3.2 billion, the latest move in a wave of consolidation in the exchange market. Specialty chemical company Lanxess said Sunday it is buying Chemtura in a deal with an enterprise value of around $2.7 billion and Salesforce.com’s CEO Marc Benioff is considering a bid for Twitter, which would marry his enterprise software giant with the social media company.

Technical Take:

Living up to its seasonal tendencies, both the SPX and Dow Jones Industrial Average are on pace for their worst monthly performance since January. Last week the SPX rebounded to fill the 2,177 gap created back on 9/9 when the large cap index broke its streak of narrow trading ranges and declined 2%. As is often the case with gaps, 2,177 has so far proven to be firm resistance as the index has declined as much as 28 points over the following two sessions. The 50-day moving average, now 2,066, is flattening out and is at risk of rolling over. 50 trading days ago is mid-July when the index was oscillating in a tight range around 2,170. Failure to reach new highs soon will result in a declining moving average which could weigh on the underlying index. The rising trend line from the June lows is the first key support line, followed by the September lows at ~2,120.

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emptyNasdaq'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.