Nasdaq Markets Outlook

A mostly graphical daily curated roundup of the markets and the economy from Nasdaq's IR team.

#marketseverywhere | bond yields continue to rise | 10YR Treasury yield breaks above 4.9% for the first time since 2007 -CNBC | 30YR fixed mortgage rose to 8% for the first time since 2000

* source: CNBC

* source: Yardeni Research

| "The only time affordability has been as weak as it is today, is when mortgage rates were near 16% in the early 80s. That was -2 standard deviations from historical average. Today we are at -1.7" -Piper Sandler

* source: Piper Sandler

| we are seeing many more fallen angels versus rising stars...

* source: BofA's Savita

| "There is not a lot of conviction in the market today. Between domestic politics, an escalating geopolitical crisis, and the unknown extent of the lagged effects of tightening, we are in an extremely uncertain backdrop."

In Uncertain Markets, Investors Prefer Stronger Fundamentals

Stocks With Stronger Fundamentals Generally Have More Certainty

-Piper Sandler's Michael Kantrowitz

* source: Piper Sandler

| "The interesting thing is if you’d told most people at the start of the year that 10yr yields would be around 5% by October, not many people would have wanted to own the NASDAQ given the near one-to-one negative correlation to yields in prior quarters. So AI has helped create a dramatic decoupling." -Deutsche Bank, Jim Reid

1) KEY TAKEAWAYS

1) Equities LOWER / TYields + Oil + Dollar HIGHER

| Powell to speak at noon | geopolitical tensions on the forefront...

| U.S. weekly jobless claims total 198,000, fewer than expected

| AAII Weekly Retail Sentiment: Bullish & bearish fell while neutral jumped

DJ -0.0% S&P500 +0.1% Nasdaq +0.3% R2K -0.5% Cdn TSX -0.1%

Stoxx Europe 600 -0.9% APAC stocks LOWER, 10YR TYield = 4.939%

Dollar LOWER, Gold $1,953, WTI -1%, $87; Brent -1%, $90, Bitcoin $28,477

| THEMES: yields marching higher | stubborn moderate inflation a risk (CPI +PPI >expected) | where is oil going with geopolitical risks building? | Fedspeak turning dovish | Rising Federal Deficit | Optimism around upcoming Q3 earnings season | Q3 Bank earnings better than expected – will this earnings season be better than expected? 

-by Shon Wilk, Nasdaq

2) Investors Have Bid Up Large Growth And Shunned Small Value …

* source: Piper Sandler

3) #QualityMatters | Quality Tends To Outperform In The “Risk-Off” Phase Of The Market Cycl

* source: Piper Sandler

4) SUBDUED GROWTH: "The latest Beige Book covering September through the first week of October painted a picture of an economy growing at a more subdued pace than some recent economic data would suggest." -Oxford Economics

* source: Oxford Economics

5) THIS WEEK: "US activity data, Q3 GDP in China and the CPI in Japan. In Europe, the spotlight will be on inflation and labour market indicators in the UK.

From central banks, key events include the Fed's Beige Book, Chair Powell's speech, as well as rate fixings in China. Notable earnings releases include TSMC, Tesla and Lockheed Martin." -Deutsche Bank

* source: Grindstone Intelligence

2) ESG, COMPILED BY NATHAN GREENE

EU Proposes Delaying Some ESG Reporting Rules -BNN

-The European Commission said cutting red tape is critical to ensuring that the region’s companies remain competitive, according to a document laying out its agenda for 2024. That means extending the deadline for adoption of sectoral elements of the European Sustainability Reporting Standards, or ESRS, currently due to come into force in June 2024.

UK watchdog says some funds attempting to mislead with ESG label -RTRS

-There are huge numbers of applications from funds seeking to register as being ESG-focused funds or re-labelling themselves as sustainability-focused as a large volume of money enters the fast-growing investment sector, said Mhairi Jackson, policy lead in asset management at the Financial Conduct Authority (FCA).

3) MARKETS, MACRO, CORPORATE NEWS

• 10-year Treasury yield breaks above 4.9% for the first time since 2007-CNBC
• Bond buyers long-term Treasuries despite higher-for-longer rate fears-RTRS
• Fed's Powell to take the stage amid a suddenly choppy landscape-RTRS
• World's only negative-rate holdout may stop by year-end-BBG
• BOJ upbeat on regional Japan but warns of uncertain wage outlook-RTRS
• BOK freezes key rate for 6th time amid heightened uncertainties-YNA
• US gives Israel ‘private backing’ for ground invasion of Gaza-TIMES
• Gaza waits for aid after Biden deal to allow convoy via Egypt-FT
• Xi Jinping hails ‘deep friendship’ w/ Vladimir Putin as leaders meet in Beijing-FT
• Japan exports rise more than expected in support for recovery-BBG
• Sell-off sends ASX back below 7000, tech stocks lead losses-AFR
• Jordan fails on second speaker vote as Republican division grows-WASHPO
• Biden expected to request $100 billion for Israel, Ukraine and other crises-NYT 

• OpenAI is in talks to sell shares at $86 billion valuation-BBG
• Devon Energy mulls M&A options with Marathon, CrownRock-BBG
• Pulp producer RGE considers bid for $3 billion China tissue maker Vinda-BBG
• Pfizer to price Covid drug Paxlovid at $1,390 per course-CNBC
• Safran CEO calls for tougher regulation after fake aircraft parts scandal-BBG
• Rio looks to use old mines for solar power-SMH
• Intesa leaning towards capital boost rather than paying bank tax-RTRS
• Tesla tempers growth expectations as Musk sees storm ahead-BBG
• Netflix raises prices after password crackdown boosts subscriptions-FT
• TSMC expects 'healthy growth year' as Q3 profit beats expectations-RTRS
• Banks report continued pain on commercial real estate loans-RTRS
• Beijing weighs delaying approval of $69bn Broadcom-VMware deal-FT
• US airline investors worry the travel boom may be coming in for a landing-RTRS
• Musk considers removing X platform from Europe over EU law – Insider-RTRS 

• Oil/Energy Headlines: 1) OPEC plans no immediate action after Iran urges Israel oil embargo, sources say-RTRS 2) US broadly eases Venezuela oil sanctions after election deal-RTRS 3) Venezuela oil production seen rising 25% as US eases sanctions-BBG 4) Venezuela's oil sanctions relief may lift profits, no fast output rebound-RTRS 5) U.S. extends refiner Citgo's protection from creditors through January-RTRS 6) Biden eases sanctions on Venezuelan oil and Republicans howl-POL 7) Sechin lauds safety of Russian oil sales to China amid chaos in the Middle East-RTRS 8) Japan calls on Saudi Arabia, others to boost oil output to stabilise prices-RTRS