Market Intelligence

Equity Market Insight from Nasdaq MID -- September 30, 2016

Friday, September 30, 2016, 11:40 AM, EST

  • NASDAQ Composite +0.82% Dow +1.08% S&P 500 +0.91% Russell 2000 +0.55%
  • NASDAQ Advancers: 1617 / Decliners: 551
  • Today’s Volume: +1.1%

US markets are modestly higher on light volumes while European markets move off their earlier lows. Concerns over the viability of Deutsche Bank hit the markets yesterday afternoon, but today there is some speculation that the DoJ could accept a lower settlement. Recall the DoJ initially sought as much as $14 billion in a mortgage-backed securities suit. Most sectors are higher this morning with financials (+1.0%) in the top position. Rate sensitive REITs (-0.1%) and utilities (-0.5%) are the only sectors seeing red. The dollar is flat while gold and treasuries are slightly weaker.

  • Consumer Confidence rose for the 1st time since June, according University of Michigan Sentiment Index released this morning. Sentiment came in at 91.2 vs polled expectations of 90.00. The expectations index rose to 82.7 vs 78.7 estimates. However, the current economic conditions index fell to 104.2 from 107.0 last month. This last component is the lowest reading since October of last year and can be seen as a negative for consumer spending. According to the report, “Confidence edged upward in late September due to gains among higher income households, while the Sentiment Index among households with incomes under $75,000 has remained at exactly the same level for the third consecutive month.”
  • August Personal Income rose 0.2% as expected but that’s down from July’s 0.4% and the weakest read since February. Personal Spending also declined, coming in at 0.0% versus an expected 0.1%. “It was a soft month for consumer spending following a strong one, and it’s not anything to get worried about,” said Tom Simons, economist at Jefferies LLC in New York.
  • Beginning tomorrow Yuan joins the Dollar, Euro, Pound and Yen to become an official global reserve currency in the IMF’s Special Drawing Rights. The Yuan is the world’s fifth most used currency, and some think inclusion with SDR could push China toward adopting more market-oriented economic policies. Bloomberg News noted that China accounts for more than 10% of world trade but less than 2% of global payments are in Yuan.
  • Nasdaq welcomes enterprise cloud provider Nutanux, which launched its IPO today. NTNX priced nearly 15 million shares at $16 and raised $238 million. The stock opened with a 65% gain.

Technical Take:

One security investors should continue to keep on the forefront is the USDJPY currency pair. Often considered a barometer of risk sentiment, the pair has been in a declining price channel throughout all of 2016, but recently in the entire 3rd quarter it has been consolidating in a descending triangle pattern of lower highs and horizontal support around the 100 level. Over the last four weeks price action has been coiling as the declining support converges closely towards the horizontal resistance with little room left to the apex of the triangle. Setups like this often resolve with meaningful breakouts, up or down, as price has nowhere else to go, resulting in a transition from consolidation to trend. A breakdown below support would be consistent with the 2016 declining price channel, and could bode poorly for investor sentiment and overall risk assets.

For an expanded view of this chart, please scroll to the bottom of this article and click on the chart to view in modal.

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.

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