Nasdaq Markets Outlook

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

"The market is converging on a June start to cuts for both the Fed and ECB. However, upside risks to either inflation or growth could upend the market's current dovish mood." -JPMorgan's Marko

| A bifurcated market: US small-caps suffer worst run against larger stocks in over 20 years -FT

* source: Yardeni Research

larger stocks commanding a higher valuation premium...

* source: Goldman Sachs Global Investment Research

| Global stocks starting to look rich...

* source: JP Morgan

| #QualityMatters | "In an environment of higher rates and return-to-trend growth, quality will be key, particularly as valuations remain stretched and earnings estimates are downgraded." -JPM AM

* source: JPM AM

| JPM investor poll: sentiment is positive to mixed while investors are generally not likely to increase equity exposure...

* source: JP Morgan

| earnings growth is crucial for a broad sustained rally based on fundamentals

"Consensus US EPS projections for 2024 are small down ytd, continuing the downward trend seen last year." -JP Morgan

* source: JP Morgan

| Indexes at all time highs + bifurcated market + valuations stretched with quality stocks = positioning stretched.

"Active equity managers have continued to add to their equity positions, and current positioning using the NAAIM survey looks pretty full. Likewise, asset manager net longs in S&P 500 futures remains near highs." -Barclays' Emmanuel Cau

* source: Barclays' Emmanuel Cau

| Japanese yen hits 34YR low against the dollar - currency depreciation is a form of inflation

* source: CNBC

| JPM poll: in this bifurcated market, will markets sell off or laggards catch up for a reversal to materialize?

* source: JP Morgan

| bifurcated market: how much higher can tech go?

* source: BofA, Michael Hartnett, The Flow Show

skewed flows = tech strong inflows | Energy + Utes unloved

* source: Barcalys' Emmanuel Cau

| Yields / Fed's policy / inflation + growth trade-off have had a large impact on markets

* source: Michael Kantrowitz, Piper Sandler

| will elevated levels of government spending / debt keep inflation elevated?

* source: BofA, Michael Hartnett, The Flow Show

| Dovish central banks = tolerate higher levels of inflation = gold to continue rising?

* source: JP Morgan

markets pricing in mild inflation

* source: JP Morgan

| feeling bubbly? | rate cuts to accelerate more capital into equities and away from money market funds?

* source: Barclays' Emmanuel Cau

1) KEY TAKEAWAYS

1) Equities + Gold + Dollar HIGHER | TYields + Oil LOWER

DJ +0.7% S&P500 +0.4% Nasdaq +0.0% R2K +0.9%

Stoxx Europe 600 +0.1% APAC stocks MIXED, 10YR TYield = 4.226%

Dollar HIGHER, Gold $2,192, WTI -1%, $81; Brent -1%, $86, Bitcoin $69,900

2) THIS WEEK:

light macro calendar

* source: Barclays' Emmanuel Cau

2) MARKETS, MACRO, CORPORATE NEWS

• S&P 500 turns lower in final 30 minutes of trading: markets wrap-BBG
• Retail investors host meme stock party in face of high rates-BBG
• Baltimore bridge collapse will likely block coal exports for weeks-BBG
• GM, Ford will reroute Baltimore shipments after bridge collapse-RTRS
• China's industrial profits return to growth as conditions stabilize-RTRS
• Australia survives sold out Taylor Swift shows without spike in inflation-RTRS
• Spanish inflation quickens as government removes energy aid-BBG
• Biz outlook edges down for April amid slowing domestic demand-YNA
• Hawkish BOJ policymaker calls for 'slow but steady' interest rate hikes-RTRS
• BoE's Mann says markets are pricing in too many rate cuts-RTRS
• ECB’s Kazaks doesn’t dispute market view of June rate cut-BBG
• Swedish central bank holds rates, flags cut in May or June-RTRS
• Biden says US should pay to rebuild downed Baltimore bridge-BBG
• Biden, Democrats (mostly) ditch "Bidenomics"-AXIOS
• China files WTO complaint over US electric-vehicle subsidies-BBG
• China's President Xi meets US executives in Beijing as investment wanes-RTRS
• American business stalls in China-MSN
• TikTok’s troubles just got worse: The FTC could sue them, too-POL
• Biden faces bipartisan backlash over UN ceasefire vote-AXIOS

• J&J in talks to buy Shockwave Medical, WSJ reports-RTRS
• Proxy adviser Egan-Jones backs Nelson Peltz’s slate in Disney board vote-BBG
• Supply chain risk firm Avetta attracts EQT, Warburg and Bain-BBG
• Jet costs cloud proxy adviser support for Santos-AFR
• Bajaj Finance arm Bajaj Housing Finance starts preparation for IPO-MONEY
• Apple set to unveil ai strategy at June 10 developers conference-BBG
• A pivot to China saved Elon Musk. It also binds him to Beijing-NYT
• Chatbot letdown: Hype hits rocky reality-AXIOS
• Boeing at risk of Moody’s downgrade on cash flow concerns-BBG
• S&P Global downgrades outlooks on five regional US banks to 'negative'-RTRS
• Fast-fashion retailer H&M beats expectations in spring recovery-RTRS
• US consumer watchdog to examine credit card rewards, 'buy-now, pay-later'companies-RTRS

Oil/Energy Headlines: 1) The ‘No-Fail’ mission to protect the Red Sea isn’t working-BBG 2) FUJAIRAH DATA: Oil product stocks dip ahead of exports surge-PLATTS 3) New Venezuelan opposition candidate may give US sanction relief options: analysts-PLATTS 4) The true direct cost of oil sanctions on Russia’s exports-BBG