Market Intelligence

Equity Market Insight from Nasdaq MID - September 6, 2016

Tuesday, September 6, 2016, 11:15 AM, EST

  • NASDAQ Composite +0.18 Dow -0.06% S&P 500 -0.05% Russell 2000 -0.28%
  • NASDAQ Advancers: 1121 / Decliners: 1140
  • Today’s Volume: +19%

U.S. stocks opened the holiday-shorted week mixed, as traders returned to their desks and trading volume appears to be back in-line. Last Friday, the street received the monthly Nonfarm Payroll number that missed expectations, and thus lowering the probability that we will see a rate hike this month.

  • Takeover Tuesday: In a few deals announced this morning, Enbridge (ENB) is acquiring Spectra Energy (SE) in a $28 billion stock deal. Also, Danaher (DHR) announced it is buying Cepheid (CPHD) for $53.00 per share in cash and there are also press reports that Bayer (BAYRY) is closing in on a deal to acquire Monsanto (MON).
  • August U.S. ISM Non-manufacturing came in lighter than expected at 51.4 vs consensus of 55.0 and lighter than July 55.5 reading. Business activity, new orders and employment all came in lighter than economists’ forecast.
  • Also released today was the Federal Reserves’ Labor Market Conditions Index, which is released the following business day after the U.S. Jobs report. This index is statistical tool measuring labor market conditions. The LMCI showed a decline of 0.7 index points vs a 1.3 rise in July and is based off of the unemployment rate, private payrolls, JOLTS and wage measures.

Technical Take:

After holding the ~100 support level throughout the month of August, the USDJPY currency pair has rallied back to the top of its 2016 declining price channel where it has resided over the last four sessions. A breakout above the declining channel would not only be a bullish reversal signal for the currency pair which has been in a downtrend throughout all of 2016, but it could also have strong implications for other asset classes. Specifically a rising USDJPY is often associated with a “risk-on” sentiment and rising stock prices. Although the major equity indices have been making fresh highs in Q3, the YTD return for the large cap indices has been modest in the mid-single digit range. Thus an upside breakout above the USDJPY’s declining price channel could provide a meaningful tailwind for equities which have been stuck in low volatile, low range trading funk. Conversely over the last few years gold has proven to have a strong inverse correlation to the USDJPY pair and thus could see significant headwinds if USDJPY reverses higher.

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.