Traders Await Decision On Iran Deal

Tuesday,May8, 2018, 10:10 AM, EST

  • NASDAQ Composite -0.18%Dow -0.15%S&P 500-0.19%Russell 2000+0.06%
  • NASDAQ Advancers:1110Decliners:958
  • Today's Volume (vs. yesterday)+8.1%

U.S. equity markets are trading flat to lower to start the day while we await a decision out of Washington about the Iran nuclear deal this afternoon. If the deal is rescinded, the questions comes what type of sanctions will be re-imposed? This could have far reaching impact on oil prices , trade partnerships and long standing alliances.  Corporate earnings and corporate events continue to pour out this week with 20 S&P 500 members either reporting this morning or tonight after the bell. Currently 9 of the 11 S&P 500 sectors are trading lower with Utilities (-0.95%) and Telco (-0.91%) the worst performing sectors while Industrials and Financial march higher. Crude oil is oddly lower ahead of the Iran decision. Gold is also down 0.5% while the dollar is higher and the yield on the 10-yr increased slightly to 2.9685%.

  • Trading volumes continue to trend lower while intra-day market volatility recedes. While the VIX declines (now standing at 15 vs a 21 read in early April), so does trading volumes. YTD average daily trading volumes on the consolidated tape in the U.S has declined to 7.1 billion shares a day vs 7.3 billion shares a day one month ago. Volumes last week averaged 6.9 billion shares a day and yesterday was even less at 6.1 billion shares. The correlation between the VIX and trading volumes is clear, with increased volatility, market volumes uptick…
  • Traders await the decision on the Iran nuclear agreement later this morning, and though many expect Trump will order a US withdraw from the agreement they also see the move as a negotiating tactic.  The WSJ reports Several European firms that do business in Iran will see the most immediate impact and are preparing for the worst.  The Journal also writes that crude oil pricing might not see much of an impact at all.  The market is already well supplied and the US does not import Iranian oil nor do it need to.  China is Iran's largest oil market and analysts expect China will simply ignore US sanctions.
  • M&A activity continues to grab headlines with private equity looking to purchase Athena Healthcare (ATHN),Takeda (4502 JP) firming up its deal for Shire (SHPG ) and multiple players looking to pick up 21 st Century Fox's (FOXA) entertainment assets. Mark Fedorcik Co-Head of Deutsche Bank's Global Capital Markets team recently wrote, "2017 marked the fourth successive year of $3 trillion plus global M&A. And yet despite the maturity of the cycle, 2018 is well on pace to exceed 2015, the largest global M&A year on record. Barring an exogenous shock, more than a dozen major economic, policy and market developments are converging to drive what could be a historic year for the market." With a strong global economy and larger balance sheets, look for global CEO's to continue to hunt for deals…
  • Avnet Inc (AVT) a $4.7 billion marketer and distributor of computer products and semiconductors begins trading on Nasdaq today after transferring their listing from the NYSE.

Technical Take:

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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 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 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.

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.