EQUITY MARKET INSIGHT FROM NASDAQ MID -JANUARY 10, 2017

• NASDAQ Composite +0.12% Dow +0.05% S&P 500 -0.02% Russell 2000 +0.15%
• NASDAQ Advancers: 1224 / Decliners: 816
• Today’s Volume (100day avg.): +2.6%

The Nasdaq Composite closed at a record high for the second session in a row yesterday; however, the SPX and Dow finished lower as new-year caution has taken hold of some investors. Major indexes opened flat today as investors remain cautious ahead of Trump’s scheduled news conference. Sector performance is mixed.

• The National Federation of Independent Business reported its optimism index jumped 7.4 points to 105.8, the strongest reading since 2004. JOLTS job openings were reported at 5.52 million virtually in line with survey expectations of 5.50 million. Wholesale inventories rose 1.0% for November vs. the 0.9% expected.
• Investors will focus on earnings Friday from the largest banks in the U.S. with Wells Fargo (WFC), J.P. Morgan Chase (JPM) and Bank of America Corp (BAC) all set to report. S&P 500 earnings for the fourth quarter are expected to rise 3% from the year-ago period and the bulk of that is expected to come from Financials, which have rallied sharply since the election.
• We’ve seen a bit of a pullback in the dollar, another indication of investor nervousness ahead of Trump’s news conference scheduled for Wednesday. This is the first time he has addressed the media since July. The dollar had been rising partly on a belief that the Trump administration’s fiscal stimulus will boost the economy. Lately the gains have stalled and the dollar index has traded lower in four of the past five trading sessions.
• Illumina is the S&P 500 biggest gainer, adding more than 14% after the company announced at yesterday’s JPMorgan Healthcare Conference the company will introduce a new DNA sequencer that can sequence a human genome within an hour. Allscript Healthcare Solution has jumped (+8%) to its highest level since early November, helped by reporting better-than-expected revenue in 2017.

Technical Take: EURUSD

In each of the prior four weeks the EURUSD major currency pair has broken below the 1.0458 key support line which represents the 2015 low, however it has managed to hold the line on a weekly close give or take 5-7 pips. While many believe diverging central bank policies will cause with this important support line to give way resulting in the EURUSD trade down to parity, the risk is that it holds and a meaningful rally ensures driven partly by covering. The below weekly period chart illustrates how the pair has been trading in a range of 1.0458 – 1.1467 for most of the prior 22 months. While the weekly MACD remains in negative territory, the spread between it and its signal is narrowing (see green histogram bars) suggesting a bullish crossover could happen in the near future. This could lead to accelerating upside momentum and would likely impact the broader markets given the dollar’s role as the world’s reserve currency and the strong correlations it has with other asset classes like commodities and emerging markets.

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 has 16 years of trading desk experience. Prior to joining Nasdaq Brian executed equity orders and provided trading ideas to institutional clients. He also contributed technical analysis to a fundamental research offering. Brian focuses on helping Nasdaq’s Financial, Healthcare and Airline companies among others understand the trading in their stock. Brian is a Chartered Market Technician.