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Profit Taking on the Last Day of the Decade

After this record run which saw the S&P 500 gain 28% in 2019 (its best performance since 2013) investors should take some money off the table. Trading volumes are still light indicating that most traders are off enjoying the holiday season.

  • NASDAQ Composite -0.09% Dow -0.15% S&P 500 -0.16% Russell 2000 +0.22%
  • NASDAQ Advancers: 1368 Decliners: 1002
  • WTI Crude: -0.95%   Gold +0.5%  10yr Treasury Yield 1.91%  VIX 15.29 +0.47      
  • Market Volume (vs, Yesterday): -7.68%

Market Movers

  • Trump said today he will sign the U.S.–China phase one trade deal on January 15th
  • Protestors break into U.S. embassy in Iraq
  • Chinese Manufacturing PMI stronger at 50.2 vs consensus of 50.1
  • M/M Redbook retail sales -2.8% vs -3.4% previously reported
  • Y/Y Redbook retail sales +7.8% vs +6.2% previously reported
  • October FHFA Housing Price Index +0.2% vs. consensus of +0.4%
  • October S&P CoreLogic Case-Schiller Home Price Index +2.23% Y/Y & +0.43% M/M
  • U.S. Consumer Confidence for December 126.5 vs. consensus 128.5
  • November revised higher to 126.8 vs 125.5 previously reported
  • Equity markets are open for a full day of trading today
  • Bond markets close early today at 2pm ET

Chris’ Commentary

Happy New Year from the MID. We wish all our clients, readers, family and friends a blessed and healthy 2020.

Profit taking by investors into year’s end has been the theme the last few days and why not? After this record run which saw the S&P 500 gain 28% in 2019 (its best performance since 2013) investors should take some money off the table. Trading volumes are still light indicating that most traders are off enjoying the holiday season. We are here today at Market Site in New York’s Times Square set for a full day of trading.

Today, markets opened flat to mixed. President Trump announced this morning that a U.S.-China trade phase one deal signing ceremony will take place on January 15th at the White House. This follows reports yesterday that Chinese Vice Premier Liu will arrive in Washington this Saturday.

Currently, 6 of the 11 of the S&P 500 sectors are trading higher with Materials and Industrials the best performers while Communications and Healthcare move slightly lower. Crude oil is off about 1%. Gold trades higher while the dollar trades lower. The yield on the 10-yr stands at 1.91%. 

Consumer Confidence, one of the backbones of this year’s impressive market run, unexpectedly declined in December. The Conference Board's Consumer Confidence Index slipped to 126.5 in December (consensus 128.5) from an upwardly revised 126.8 (from 125.5) in November. The key takeaway from the report is that consumer's short-term income prospects dipped, suggesting the expected economic momentum for next year may not materialize. “Consumer confidence declined marginally in December, following a slight improvement in November,” said Lynn Franco, Director of Economic Indicators at The Conference Board. “While consumers’ assessment of current conditions improved, their expectations declined, driven primarily by a softening in their short-term outlook regarding jobs and financial prospects. While the economy hasn’t shown signs of further weakening, there is little to suggest that growth, and in particular consumer spending, will gain momentum in early 2020.”

Sector Recap

MIDCHART1_123119

Brian’s Technical Take

Today is the final trading session for both 2019 and the 2nd decade of the 21st Century. Over both time periods the performance of Nasdaq listed companies has been second to none. 

The Nasdaq 100 and Nasdaq Composite led all major US equity indices in 2019 by a healthy margin with total returns of 39% and 36%. The next best performers were the S&P 500, +31%, and S&P 400 Midcap indices, +26%. The Dow Jones Industrials finished at the back of the pack with a gain of 24.7% YTD. 

Over the last decade the performance of Nasdaq-listed companies has been even more impressive. From the start of 2010 to present, the Nasdaq 100 (NDX) and Nasdaq Composite indices have a total return of 424% and 345%, respectively. For comparison the next top performers are the S&P 500 and Dow Jones Industrials with total returns of 255% and 250%. Put another way, the NDX outperformed its large cap brethren by 169 and 174 percentage points. How is that for alpha? 

Happy New Years to you and yours. Wishing you and your families’ good health and all the best!

MIDCHART2_123119

 


Nasdaq's Market Intelligence Desk (MID) Team includes:

Charles Brown is Associate Vice President on The Market Intelligence Desk with over 20 years of equity capital markets experience. Charlie has extensive knowledge of equity trading on both floor and screen-based marketplaces. Charlie assists with the management of The Market Intelligence Desk and works with Nasdaq listed companies providing them with insightful objective trading analysis.

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.

Brian Joyce, CMT is a Managing Director on the Market Intelligence Desk (MID) at Nasdaq. Before joining Nasdaq, Brian spent 16 years as an institutional trader executing equity and options orders for both the buy side and sell side. He also provided trading ideas and wrote technical analysis commentary for an institutional research offering. Brian focuses on helping Nasdaq’s Financial, Healthcare and Transportation companies, among others, understand the trading in their stock. Brian is a Chartered Market Technician (CMT).

Michael Sokoll, CFA is Associate Vice President 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. 

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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