- NASDAQ Composite -0.81% Dow -0.47% S&P 500 -0.56% Russell 2000 -0.68%
- NASDAQ Advancers: 656 Decliners: 1598
- Today’s Volume (vs. Wednesday) -13.65%
- Crude -1.50%, Gold +0.20%
- Q2 US GDP (final) +2.0% vs. consensus +2.0%; Q2 Chain Price (final) +2.4% vs. consensus +2.4%
- US Jobless Claims for w/e 21-Sep 213K vs. consensus 212K; Continuing Claims for w/e 14-Sep 1650K vs. consensus 1665K
- August US Wholesale Inventories +0.4% vs. consensus +0.2%
- Bloomberg Consumer Comfort Index for the period ending September 22nd fell to 61.7 from the previous reading of 62.7.
- August US Pending Home Sales +1.6% m/m vs. consensus +1.0%
- The whistleblower complaint against President Trump was released
The markets maintained their gains yesterday afternoon brushing aside impeachment concerns empowered primarily by upbeat trade news and strong economic news out of the housing market. The Dow finished the day +0.6% while Nasdaq rose +1.05% and the S&P gained +0.62%. Trade sensitive sectors such as technology and consumer discretionary gained while safe haven assets such as gold and treasuries sold off.
This morning’s market risk off mood has been colored early by the release of a complaint from an unnamed intelligence official who raised concerns about the interactions of President Trump with the Ukrainian President. The complaint alleged that the President used his office to solicit interference from a foreign country ahead of the 2020 election. This “whistleblower” complaint goes on to suggest that the administration attempted to lock down records of the interaction. Currently the acting Director of Intelligence Joseph Maguire is testifying in front of the House Intelligence Committee. Traders are listening with one ear to the testimony while waiting for further details on trade progress which up until now “trumps” all other news.
On the economic front, gross domestic product increased at an unrevised 2.0% rate in the first quarter as robust consumer spending offset weak exports and a reduced pace of inventory investments. The economy grew at a 3.1% rate in the fist quarter and expanded 3.2% for the first half of the year. Business investment declined by an 1.0% annualized rate last quarter which was the steepest decline since the fourth quarter of 2015. Government spending meanwhile increased at a 4.8% pace instead of 4.5% previously reported, The advanced trade deficit in goods widened to $72.8 billion in August, up 0.5% from the prior month, according to the Commerce Department’s advanced estimate. US. Jobless claims came in at 213,000, an increase of 3,000 for the period ending September 21st, continuing to hover at low levels with the four week moving average trending lower. The slight rise for the period was attributed to the ongoing General Motors strike. Job losses are still extremely low even though there’s scattered signs that some companies are cutting jobs. Layoffs have stuck near a 50-year bottom, suggesting a strong U.S. labor market remains the bedrock of the U.S. economy. The Bloomberg consumer comfort index fell to 61.7 from 62.7 for the week ending September 22nd. This was the third consecutive week that the reading fell as opinions of the buying climate fell to the weakest level since June. The concern with this trending data is that consumer spending could temper after the strongest quarter since 2014. Consumer spending accounts for approximately three quarters of gross domestic product. Pending home sales rebounded in August rising 1.6% compared to July and was 2.5% higher year over year probably aided by exceptionally low mortgage rates. This reversed a slowdown in July
Oil continued it’s retreat for a third consecutive day on the recurring theme of Saudi Arabia quickly restoring production at damaged oil facilities, general oversupplies of inventory and slowing demand from weakening global economies. WTI and Brent have declined by 3.8% and 3.7% respectively since Monday’s close. Gold is catching a bid this morning but more from the standpoint of buying the dip from yesterday when the shiny metal dropped close to 2%. The dollar is stronger today, limiting gold's upside as it appears to be the focus of safety with political uncertainty in the air.
As the market continues to trade cautiously today unwilling to take on too much risk, safe have sectors are leading with Consumer Staples (+0.37%), Real Estate (+0.34%0 and Utilities (+0.14%) getting the majority of buying interest. Lagging are Energy (-1.46%), Communications (-1.11%) and Consumer Discretionary (-0.57%).
Brian’s Technical Take
Just last week we highlighted the 2 ½ month consolidation underway in bitcoin following a 340% gain from its December lows to June highs. The corrective price action grew into a triangle pattern which in general typically resolve in the direction of the prior trend, in this case to the upside. We also noted a retest of the 9,100 support level, down 10%, was a possibility.
On Tuesday the breakout did in fact take place, however it was to the downside and thus went counter to the prior trend. Tuesdays 12% decline knifed through the 9,100 support. At the intraday lows, 8,088, bitcoin was down 17% for the session.
The two ensuing sessions have seen sideways price action resembling a “bear flag” pattern, a relatively brief sideways consolidation followed by an expectation for more downside price action. The “bear flagging” is taking place along the 8,466 price gap (blue dotted line), which is an expected support line bitcoin appears to be HODL (holding onto dear life) to.
Greater support is down below at the 6,426 – 7,005 range. The lower bound 6,426 represents another price gap, while the upper bound is equal to the 200-day sma (yellow line).
Bitcoin has already given back as much as 40% from its June highs and currently stands +130% YTD. If the current gap support can’t hold, the 200-day seems to be the next logical stop.
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.