Market Intelligence

Equity Market Insights: January 2, 2018

Tuesday, January 2, 2018, 11:05 AM, EST

  • NASDAQ Composite +1.22% Dow +0.25% S&P 500 +0.64% Russell 2000 +0.89%
  • NASDAQ Advancers: 1803 Decliners: 626
  • Today’s Volume (100 day avg) -0.96%

On the first trading day of 2018, US stocks are making gains this morning, finding strength from Retailers (+0.7%) and Media (+0.65%) stocks. Crude Oil opens the year above the $60/ level, continuing its rally we witnessed during the 4th quarter (~+17%). There’s nothing on the Economic Calendar today, while the US Dollar Index appears to be falling towards its September lows.

  • The U.S. Treasury will sell an unprecedented $160 billion of T-bills in 4 separate auctions today. The Treasury plans to sell $48 billion of 3-month bills, $42 billion of 6-month bills, $50 billion of 4-week bills and $20 billion of 52-week bills.
  • Retailers enjoyed a merrier Christmas thank expected as higher consumer confidence and lower unemployment help fuel a successful shopping season. According the WSJ, “It started with a bang in the week leading up to Black Friday,” said Sarah Quinlan, a senior vice president of marketing insights at Mastercard. She added that retailers benefited this year from Christmas Day falling on a Monday, giving shoppers a full weekend to scoop up last-minute purchases. Dec. 23 ranked next to Black Friday in terms of spending, according to Mastercard.”
  • According to the Eurasia Group’s annual outlook , the firm believes the current geopolitical challenges has set the stage for a “Big unexpected crisis”, similar to the 2008 “financial meltdown.” Eurasia’s President Ian Bremmer noted on a Bloomberg interview, “We see a much greater fragmentation of the global marketplace because government are becoming more interventionist.”
  • The tax bill signed at the end of 2018 , might encourage profit-taking, as investors now search for the next catalyst to drive equites higher.

Technical Take:

The broad commodity complex is picking up right where it left off in 2017 with the Bloomberg Commodities Index (BCOM) up 0.5% in the early going of today’s session. The BCOM Index spent much of 2017 consolidating “sideways” after a healthy 11.4% gain in 2016, its first positive year since 2010. Entering December the BCOM Index was down more than 2% on the year, but things quickly changed as the commodities index went on a streak of daily gains over 14 of the final 15 sessions in 2107. This brought the year’s performance back into the green for a modest annual gain of 0.8%. This remarkable run has pushed the daily RSI to an “overbought” 73 reading and comes as the index is now testing a major resistance line connecting the highs from 2016 and 2017. This suggests the asset class could enter a period of consolidation in the not too distant future. The technical setup over the intermediate to longer term remains bullish with the inverse head & shoulder pattern, formed from March through October 217, still in play. Thus some near term profit taking should be expected, but further out the commodity asset class could see a major breakout above its multi-year resistance line.

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.

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