Nasdaq Markets Outlook

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

"even as current data trends point to a soft landing in the US and “only” a mild recession in Europe, there are several warnings from history as many indicators still point to a harder landing. So data in front of us versus what history is telling us could be the main macro battleground for 2024." -Deutsche Bank, Jim Reid

| "One of the themes we highlighted in our outlook is the importance of earnings in 2024. With markets priced for the base case of a soft landing, earnings will be a key barometer to determine if a soft landing is indeed materializing." -Piper Sandler

Earnings + Buybacks key drivers for market performance in 2024 | Investors Are Looking to Share Buybacks to Keep US Stock Market Afloat -BBG

1) KEY TAKEAWAYS

1) Equities MIXED / Gold + Dollar + TYields + Oil LOWER

NOTABLE HEADLINES

· End of QT could offer tailwind to bond markets-RTRS
· Activist investors mount record number of attacks against companies-FT
· Investors reduce bets on interest rate cuts in 2024-FT
· Fed revives investors’ hopes of end to ‘quantitative tightening’-FT
· The Stock Rally Has Stalled. Now Comes Earnings Season-Y
· China Stocks Slump to Five-Year Low in a Dismal Start to 2024 -BBG

DJ -0.4% S&P500 +0.3% Nasdaq +0.8% R2K -0.2% Cdn TSX -0.2%

Stoxx Europe 600 +0.1% APAC stocks LOWER, 10YR TYield = 4.013%

Dollar LOWER, Gold $2,023, WTI -5%, $70; Brent -4%, $76, Bitcoin $45,000

* source: Goldman Sachs Global Investment Research

2) Stock market + TYield correlation (INVERTED) very tight in recent history... | "Anyone who has looked at the history of the two will know this tight relationship won’t last forever as such correlations are typically unstable and can flip very quickly." -Deutsche Bank, Jim Reid

* source: Deutsche Bank

3) constantly shifting narratives + market leadership styles | "Beta trade once again looks to be pulling back"

* source: Piper Sandler

4) Fragile Economy? | Manufacturing continues to be in contraction territory while the much larger survey of Services declined and barely in expansion territory...

* source: John Stoltzfus, Oppenheimer Asset Management

5) Earnings will be key driver of market performance in 2024...will it deliver?

* source: Goldman Sachs Global Investment Research

6) The cooling labor market: wage Growth is moderating, quit rates are falling

* source: Oxford Economics

7) Defensives have been outperforming in Jan while Small Caps underperforming...

* source: Piper Sandler

8) "Consumers have also become more confident about current conditions in recent months even if levels remain at prior recessionary levels…"

* source: Deutsche Bank

9) By historical standards, interest rates are not elevated and has recently been falling...

* source: BofA, Michael Hartnett, The Flow Show

10) THIS WEEK: US CPI / PPI key highlight next week | Taiwan Prez election

* source: Barclays' Emmanuel Cau

2) ESG, COMPILED BY NATHAN GREENE

OFF TODAY

3) MARKETS, MACRO, CORPORATE NEWS

• JPMorgan strategists see treasuries’ rally resuming after ‘rest’-BBG
• Goldman says S&P 500 earnings forecast could rise further-BBG
• Fed's Logan: should not rule out another rate hike-RTRS
• Fed revives investors’ hopes of end to ‘quantitative tightening’-FT
• Israel’s talk of expanding war to Lebanon alarms U.S.-WP
• Israel says it has destroyed Hamas as a fighting force in north Gaza-FT
• Def Sec. Austin did not tell Biden admin about recent hospitalization-NYT
• China sanctions five US defense firms on Taiwan arms sales-BBG
• Rishi Sunak pins hopes of revival in Tory fortunes on UK tax cuts-FT
• Green investment in Texas shows how funds are navigating anti-ESG laws-FT
• SEC faces Wednesday deadline to approve or reject first spot Bitcoin ETFs-Y

• Merck is in advanced talks to buy drugmaker Harpoon Therapeutics-BBG
• Spirit Aero made blowout part but Boeing has key role-RTRS
• China to sanction 5 US manufacturers over arms sales to Taiwan-RTRS
• Musk’s drug use concerns Tesla, SpaceX leaders-BBG
• BP investors want oil behemoth to target BAE chief as CEO-SKY
• BlackRock layoffs, ESG pullback & Bitcoin ETF approval-FOX
• Bitcoin ETF issuers clear major hurdle on path to sec approval-BBG
• United pulls some 737 from service for checks amid Alaska mishap-BBG
• Sony is planning to call off $10 billion merger with India’s Zee-BBG
• Boeing shares fall as investigators locate door that blew out during flight-FT
• Berkshire Hathaway trial over Pilot Travel Centers valuation canceled-CNBC

Oil/Energy Headlines: 1) Saudi Arabia cuts Feb Arab Light crude price to Asia to 27-month low -RTRS 2) Libya says it suspended oil production at largest field after protesters forced its closure -AP 3) Oil speculators start year with huge increase in bearish bets -BBG 4) Red Sea woes unlikely to dent Russia's position as India's top crude supplier -Platts 5) India's fuel demand hits seven-month high in December -RTRS 6) War, weather put ocean shippers on notice for rough seas in 2024 -RTRS