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NASDAQ Composite. 0.3% Dow -0.08% S&P 500 -0.04% Russell 2000 -0.36%

NASDAQ Advancers: 1023 Decliners: 1154

WTI Crude: -0.43%   Gold -0.22%   10yr Treasury 1.80%  VIX  12.43 +0.33      

Market Volume (vs Friday): +6.43%

Market Movers

  • Senate to begin impeachment trial today
  • Trump says most tariffs on China to remain in place during “phase two” negotiations
  • Market weakness attributed to concerns of the coronavirus, which originated in central China
  • U.S. & France agree to delay digital tax dispute until the end of 2020
  • The IMF lowered its 2020 global growth forecast to +3.3% from +3.4%
  • World Economic Forum in Davos begins
  • Reaction to earnings: SBNY + 5.5%, HAL +1.6%, CMA -3.5%, PACW-1.5%

Chris’ Commentary

U.S. stocks made new highs again last week, as big technology companies pulled the major indexes higher. The rally coincided with the expected signing of the “phase one” trade deal between the U.S. and China that paused a long-simmering battle between two of the biggest world economies. Meanwhile, earnings from big banks showed that the domestic consumer remains strong, and economic data released Friday also added to continued optimism about the U.S. economy.

Today, markets started lower but are now trading mixed-to-flat at mid-day. Tech continues to move higher with the S&P 500 Info Tech Index up over 6.25% to start the year. Asian stocks, and China-focused names including hotels and casinos came under pressure as a result of concerns of the spread in China of the coronavirus.

Currently, 6 of the 11 of the S&P 500 sectors are trading lower with Energy, Materials and Industrials lagging.  Real Estate, Tech and Utilities move higher. Crude oil and gold both trade lower. The dollar is down for the first time in three sessions. The yield on the 10-yr stands at 1.80%.

The IMF cut its global growth outlook for 2020 GDP to +3.3% versus their prior forecast of +3.4% saying global risks have partially receded from their October update. IMF Chief Economist Gita Gopinath said, “Global growth is projected to rise from an estimated 2.9 percent in 2019 to 3.3 percent in 2020 and 3.4 percent for 2021—a downward revision of 0.1 percentage point for 2019 and 2020 and 0.2 for 2021 compared to those in the October World Economic Outlook (WEO). The downward revision primarily reflects negative surprises to economic activity in a few emerging market economies, notably India, which led to a reassessment of growth prospects over the next two years. In a few cases, this reassessment also reflects the impact of increased social unrest.”

Earnings season for the quarter is starting to pick up. Over 35 members of the S&P 500 are expected to report this week. We will get a heavy dose of Tech, Communications and Industrial names later in the week, including such market movers NFLX, IBM, UAL, TXN, AAL, CMCSA, LUV, UNP, KMB and APD.

Below is the economic calendar for the week:

Tuesday, January 21

  • Economist/Goldman Chain Store
  • Redbook Chain Store

Wednesday, January 22

  • MBA Mortgage Purchase Applications
  • Existing Home Sales
  • Pending Home Sales
  • API Crude Inventories

Thursday, January 23

  • Initial Jobless Claims
  • Continuing Claims
  • Leading Indicators
  • DOE Crude Inventories
  • EIA Natural Gas Inventories

Friday, January 24

  • Flash Manufacturing PMI
  • Flash Services PMI

Sector Recap

MID CHART 1_1.21.20

Brian’s Technical Take

The bull market continues higher with an increasing number of stocks and industries making new highs.  On Friday the S&P 500 Index (chart 1) closed at an all-time high and with it more than 25% of its members were making new 52-week highs.  This is the highest percentage of members making 52-week highs since January of 2018.

Last week the Dow Jones Transportation Index (TRAN, Chart 2) gained 2.8% and more importantly made a bullish breakout above a clearly defined, 12-month resistance level at 11,125.  The transports are an important market component for Dow theorists who look for it to make new highs along with the broader Dow Jones/SPX.  While the TRAN is at fresh 52-week highs, it remains 5% below its all-time highs from September 2018.

MIDCHART2_1.21.20
MIDCHART3_1.21.20

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.

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