Friday,March, 8, 2019, 12:31 PM, EST
- NASDAQ Composite -0.42% Dow -0.39% S&P 500 -0.48% Russell 2000 -0.36%
- NASDAQ Advancers: 1015 / Decliners: 1253
- Today's Volume (vs. yesterday)-3.00%
- Crude $55.05-$1.61, Gold $1299.80+$13.80,VIX 17.00+0.41
- Earnings reaction COST +4%, MRVL -4.5%, AOBC -8%, FIZZ -20%, NAV +1.5%, BIG +10%
- NFP +20,000 vs +180,000 polled expectation, January revised up to +311,000 vs +304,000 new jobs
- Unemployment rate better for February at 3.8% vs 3.9% expected
- Average hourly earnings ticked up $0.11 or 0.4% M/o/M
- Annual hourly wages increased +3.4% Y/o/Y vs 3.3% expected - largest increase since April'09
- Housing starts up 18.6% M/o/M for January to 1.23 million
- Building permits up 1.4% in January to 1.326 million
- China February exports fell -20.7% Y/o/Y - significantly worse than consensus
- Germany's January Factory Orders down -2.6% M/o/M, biggest drop in 7 months
Market are lower following dismal global economic data. Chinese, European and American data disappoints across the board to leave equities deep in the red for week. Each day this week U.S. equities slipped. Today is no exception. Jim Cramer on CNBC this morning called it "Global Route Mode." For the week, the S&P 500 and the Dow have both declined 2.7%, the Nasdaq Composite is down over 3% and small cap names taking it on chin, down 4.5%. All 11 S&P 500 sectors are trading lower with Energy down over 2% and Consumer Discretionary down over 1%. Crude oil trades lower by over 3% to 3 week lows. Gold trades higher while the dollar retreats from a new 52 week high made yesterday. The yield on the 10-yr is higher at 2.64%.
The U.S. Department of Labor released employment numbers today for February showing the pace of hiring in the U.S. slowed sharply. The total number of non-farm payroll jobs increased by a dismal 20,000 jobs, alarmingly below economists' expectations of 180,000 new hirers. However the unemployment rate was better at 3.8% and hourly wages increased on both a month-over-month and year-over year level. Both encouraging signs. NFP for January was revised up to 311,000 from 304,000 new hires, also encouraging. Today's headline is disappointing but there are many factors that drove this including the government shutdown and weather. Larry Kudlow, Chief White House Economic Advisor said today "I think this is a very fluky number… I wouldn't pay any attention to it to be honest with you."
Worries about a global economic slowdown weighing on Chinese and European markets. Asian closed lower across the board with the Shanghai down 4.4%. Weak China trade data disappointed, with February exports down 20.7% from a year earlier, far below forecasts of a 4.8% decline and more than erasing January's surprise increase. Analysts warned the timing of the Lunar New Year made it tough to draw a true signal from the data, but the scale of the miss was startling. Yesterday, the ECB postponed an interest rate hikes till 2020, lowered its GDP expectations and announced a new round of cheap loans in an effort to spark Eurozone economic activity. Uncertainty over a
U.S.-China trade deal has investors taking pause as stock prices slip. What has been a risk-on scenario the last few months has been overshadowed by weak global economic data. Washington and Beijing have yet to set a date for a summit to resolve their trade dispute. U.S. ambassador to China, Terry Branstad, told The Wall Street Journal that negotiators need to further narrow the gap in their positions. "Both sides agree that there has to be significant progress, meaning a feeling that they're very close before that happens …(w)e're not there yet. But we're closer than we've been for a very long time."
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Brian's Technical Take
The two week risk-off sentiment continues as the major US equity indices are in the red for the 8th time in nine sessions. After a sizeable two months of gains, the corrective price action could continue for the foreseeable future. One asset class that appears to be peculating are cryptocurrencies, in particular bitcoin. Bitcoin is up 5.5% YTD which is a nothing burger for this vehicle, however the below weekly period chart shows it has been in sideways consolation mode since bottoming in mid-December. It is approaching its declining trend line from its 2017 highs which indicates a breakout, up or down, could take place at any time.
The daily RSI is at the 59 level after pulling back from a bullish 67 high last month. In mid-February it moved above its 50-day simple moving average (sma), which previously acted as resistance on relief rallies throughout the 2018 downtrend, but in the last few weeks has flipped to support. The relief rallies off the December lows have stalled around the psychologically important 4,000 level. A upside breakout above level could confirm a larger reversal is at hand. Conversely a move back below the 50-day sma, now 3,675, may indicate the 15-month downtrend is ready to resume. Those are the battle lines as I see it. Your time frame may vary.
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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.