Markets

Stocks On Pace To Post Gains

Friday, February 23, 2018, 12:00 PM, EST

  • NASDAQ Composite +0.85% Dow +0.77% S&P 500 +0.76% Russell 2000 +0.30% S&P MID 400 +0.4%
  • NASDAQ Advancers: 1300 Decliners: 842
  • Today's Nasdaq Volume (100 day avg.) -11%

Stocks in the US are on pace to post gains today, attempting to erase the weekly declines as traders are monitoring the Fed's Semi-Annual Monetary Policy Report to Congress. 10 out of 11 S&P sectors are higher, as the S&P Utility, S&P Info Tech, and S&P Financial are all seeing >90% of their constituents advancing today.

  • Majority of the Semi-Annual Monetary Report appears to be in-line with the public's view of the economy. One key-take away was the committee's clear focus on wage growth, and they might start referencing the Phillips Curve for upcoming decisions. The curve suggests that as the economy and wages grow, inflation should see a similar advance. Recent tax reform in the US will likely boost incomes for Americans, but the Fed is closely watching the wage growth to make sure it doesn't trigger accelerated inflation.
  • M&A got a boost this week as Nasdaq listed Blue Buffalo (BUFF) agreed to be acquired by General Mills (GIS) for $40 a share in cash valuing the deal at nearly $8 billion. BUFF went public in July, 2015 at a price of $20.00. YTD, global M&A has seen $770.5 billion of announced or proposed deals which is down over 25% from this time last year.
  • Earnings season for the quarter is nearing an end with 451 members of the S&P 500 having reported. So far we have seen an average upside beat of over 4.76% for the S&P 500 membership. The quarterly earnings growth rate for the index has popped nearly 15% while the sales growth rate has increased 7.7%. Consumer Discretionary and Materials have been the outperformers while the Energy sector has been the laggard.

Technical Take: Small-Caps jammed with broken heroes, but are they ready to run?

Roughly 23% of the Russell 2000 members will be reporting quarterly results, while earnings season for large-cap companies slows down. A robust earnings season might be exactly what the R2000 needs to make traction over the 50 day MA and reclaim its bullish condition. The group has briefly touched the 50 day MA 3 out of the 5 past sessions, only to stall at the level and give up the initial upside. Since early 2016, the R2000 has seen 3 extended periods of trading below the 50 day (22 days, 21 days and 56 days). Once small caps were able to see momentum above the 50 day, the bulls piled on, pushing the index higher by an average of 10.2% over the next month. Currently, the small-cap index has spent 15 days below the 50 day MA.

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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 is a 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).

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.