Nasdaq Markets Outlook

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

#marketseverywhere | Markets Outlook will resume on Sept 7

ACHTUNG! 

Europe = Stagflation?

European business activity (PMI) contracted once again during August, to its lowest level since November 2020 | Oil -2%

Services = 48.3; Manufacturing = 43.7

both below 50 = contraction territory

* source: Yardeni Research

| A stock picker's market...investor targeting becomes more relevant

Competition for capital heats up due to monetary tightening

* source: Goldman Sachs Global Investment Research

1) KEY TAKEAWAYS 

1) Equities mostly HIGHER + TYields LOWER | Foot Locker shares plunge 30% as it slashes guidance and blames ‘consumer softness’ -CNBC

| AI darling Nvidia earnings after market close + Fed's Jackson Hole symposium in focus

DJ +0.2% S&P500 +0.3% Nasdaq +0.4% R2K +0.1% Cdn TSX +0.3%

Stoxx Europe 600 +0.2% APAC stocks HIGHER, 10YR TYield = 4.243%

Dollar HIGHER, Gold $1,910, WTI -2%, $78; Brent -2%, $82, Bitcoin $25,846

NOTABLE HEADLINES 

• Global stocks headed for worst month in nearly a year as China woes, rising US rates weigh -FT
• US bond yields surge despite muted inflation, investors look beyond Fed-RTRS
• T-Bill yields to climb further with foreign money steering clear-BBG
• ‘Higher-for-longer’ rate debate to dominate Jackson Hole meeting-FT

2) Market Breadth falling as equities lose steam... 

* source: Piper Sandler

3) ECB also expected to cut rates in 2024 but investors have been pushing back the timing 

* source: Deutsche Bank

4) Weakness in China weighing on global markets 

* source: Deutsche Bank

* source: Goldman Sachs Global Investment Research 

5) ...a mild recession is likely toward the end of this year in the US, sparked by elevated interest rates, tighter lending conditions, and restrictive Fed policy. However, a 'rolling' recession in which some industries suffer losses while others evade damage is a real threat." -Oxford Economics 

* source: Oxford Economics

6) The rally we saw in Q2 = came with one of the sharpest short squeezes!

* source: Goldman Sachs Global Investment Research

7) Near-term AI beneficiaries... 

* source: Goldman Sachs Global Investment Research 

8) "Existing home sales fell by more than we anticipated in July and likely have further to fall over the rest of the year as higher mortgage rates and a mild recession squeeze demand and keep supply conditions tight." 

* source: Oxford Economics 

9) Fed's Jackson Hole symposium = highlight for investors THIS WEEK. +investors focus on global flash PMI prints + durable goods orders in the US + sentiment indicators across Europe.

2) ESG, COMPILED BY NATHAN GREENE 

OFF TODAY 

3) MARKETS, MACRO, CORPORATE NEWS 

• Slide in euro zone service sector sharpens ECB's rates dilemma-RTRS
• Factory slump and cost-of-living squeeze puts UK on course to shrink-RTRS
• Japan's factory activity shrinks at slower pace in Aug – PMI-RTRS
• New Zealand retail sales slump poses downside risk for GDP-BBG
• Two regional fed boards sought to hold discount rate in July-BBG
• Bank of Korea to hold rate as risks to economy grow-BBG
• Global funds abandon China blue chips in $11 billion selloff-BBG
• Country Garden leaves investors in dark on exact default deadline-BBG
• How China’s faltering growth threatens to derail commodities markets-BBG
• Gas strikes in Australia loom if no progress in talks Wednesday-BBG
• Rice shortage is sending prices soaring across the world-AP
• US commerce secretary in 'productive' talks with China envoy before trip-RTRS
• US tells China to be more transparent with economic data amid slowdown-FT
• China urgently needs to address economic uncertainty-RTRS
• Huawei is building a secret network for chips, Trade Group warns-BBG
• Torrent joins fray for Hamied family stake in Cipla, vs Blackstone, Baring PE-ET
• Tiger Global nears deal to sell slice of Cohere stake at $3 billion valuation-Info
• Shiekh Jassim to buy Manchester United for £6B ($7.64B) by October-TheSun
• Reckitt Benckiser CFO Jeff Carr to leave in top level overhaul-BBG
• BASF weighs €3 billion sale of catalyst assets-BBG
• APA raising $750m at $8.50 a share to buy Alinta’s Pilbara assets-AFR
• Supply chain shortages delay tech sector’s AI bonanza-FT
• Investors look to AI-darling Nvidia's earnings as US stocks rally wobbles-RTRS
• Investors sound alarm over Arm’s exposure to China-FT
• Have consumer goods price rises peaked?-FT
• Nike suffers record losing streak on China, inventory woes-BBG
• Goldman to join TDR’s subway bid to rival frontrunner Roark-BBG
• Hollywood writers union says new proposal from studios not enough-RTRS
• Private equity firms hand over distressed companies to rivals-FT
• Oil/Energy Headlines: 1) Iran aims to boost oil output, complicating OPEC+ and US efforts-BBG 2) Iraq and Turkey yet to agree on resuming crucial oil pipeline-BBG 3) US energy firm payouts to oil investors top exploration spending for first time-RTRS 4) Namibia's offshore oil discoveries estimated at 11 bln barrels – NAMCOR-RTRS