Nasdaq Markets Outlook

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

“I have never let my schooling interfere with my education.” -Mark Twain

| BOJ keeps ultra-loose policy, offers few hints on exit timing -RTRS | "Although the Bank of Japan have continued with their accommodative monetary policy, central bank officials elsewhere were mostly pushing back on all the building rate cut speculation yesterday." -Henry Allen, Deutsche Bank

| views the of the economy remain poor as per a CNBC survey: inflation (wages falling behind) + lack of persistent economic growth... -CNBC

* source: CNBC

| in the name of deflation the BOJ has been engaged in super accommodative monetary policy but their currency (purchasing power) has lost 30% against the dollar... | inflation not necessarily a rise in prices but an erosion in purchasing power

* source: CNBC

| BofA's Global Fund Manager Survey: "FMS most upbeat since Jan'22..."

investors cut cash to 4.5% from 4.7%

Growth expectations remain pessimistic but improved

* source: BofA, Global Fund Manager Survey

| Fed's pivot unleashed a Cyclicals > Defensives trade

considerable improvement in market breadth with the Fed pivot

* source: Goldman Sachs Global Investment Research

| a sustained rally most likely requires a broad based persistent improvement in earnings which is often predicated on strong consistent economic growth...

* source: BofA, Global Fund Manager Survey

| by some standards, TYields still low...below 55YR average.

* source: John Stoltzfus. Oppenheimer Asset Management

| inflation returning is def a risk factor...financial conditions have been rapidly loosening

* source: Goldman Sachs Global Investment Research

| rate cut winners?

investors underweight commodities...

* source: BofA, Global Fund Manager Survey

1) KEY TAKEAWAYS

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

-another busy day for Fedspeak (have been hawkish but markets not buying it)

DJ +0.3% S&P500 +0.3% Nasdaq +0.4% R2K +1.6% Cdn TSX +0.7%

Stoxx Europe 600 +0.3% APAC stocks MIXED, 10YR TYield = 3.903%

Dollar LOWER, Gold $2,041, WTI +1%, $73; Brent +1%, $79, Bitcoin $42,374

* source: Goldman Sachs Global Investment Research

VIX Index (equity volatility)

* source: John Stoltzfus, Oppenheimer Asset Management

2) constantly shifting market narratives | easy money: be careful for what you wish for... | "What a week! The move higher in the risk trade last week was impressive." -Piper Sandler

3) not a lot of encouraging signs for economic growth...

* source: John Stoltzfus, Oppenheimer Asset Management

4) investors expecting (or demanding?) yields/rates to fall in 2024, juicing up returns

* source: BofA, Global Fund Manager Survey

5) West Texas Intermediate Light Crude Oil price coming off its highest levels since August 2008

"With oil prices 20% off their late September highs, positioning has unsurprisingly gotten extremely light." -Piper Sandler

* source: John Stoltzfus, Oppenheimer Asset Management

6) Falling mortgage rates lift homebuilders' spirits...but remain at depressed levels

* source: Oxford Economics

7) Mortgage rate at 7.2% and off recent highs...

* source: Yardeni Research

8) Politics...

* source: Piper Sandler

9) THIS WEEK:

-US PCE + personal income + spending data will be key

-Inflation reports in the UK + Japan.
-BoJ decision on Tuesday

-Notable earnings include Nike and Micron.

source: Grindstone Intelligence

2) ESG, COMPILED BY NATHAN GREENE

OFF TODAY

3) MARKETS, MACRO, CORPORATE NEWS

• Fed's Daly: rate cuts may be needed next year to prevent overtightening-RTRS
• BOJ keeps traders guessing on negative rate as yen rally stalls-BBG
• RBA considered interest-rate hike, saw pause case as stronger-BBG
• Villeroy says ECB should cut rates in 2024 after Plateau-BBG
• ECB’s Simkus says market’s rate-cut bets are too optimistic-BBG
• Bank of England ‘needs jobs clarity before cutting interest rates’-TIMES
• World’s biggest ETF sees record $21 billion flow on stock rally-BBG
• Fed’s pivot is forcing stock-market skeptics to become believers-BBG
• Why inflation's "last mile" might not be so hard after all-AXIOS
• Shippers mask positions, weigh options amid Red Sea attacks-RTRS
• China banks step up sales of bad loans as consumer defaults rise-RTRS
• New Zealand business confidence hits highest level since March 2015-RTRS
• Biden’s crackdown on illegal mergers is cemented with new deal rules-BBG
• Expanded US-led naval task forceprotect Red Sea shipping attacks mount-FT
• Pentagon warns Ukraine military aid fund to run out Dec. 30-BBG
• US seeks to claw back Russian oil trade under the G7 price cap-RTRS
• EU to suspend retaliatory tariffs on US imports for 15 more months-RTRS
• France’s Boone says EU close to deal on new fiscal rules-BBG

• Activist Cevian places €1.2bn bet on UBS-FT
• Apple races to tweak software ahead of looming US watch ban-BBG
• Amazon in talks to invest in Diamond Sports – WSJ-RTRS
• Google to pay $700 mln to US consumers, states in Play store settlement-RTRS
• Monsanto should pay $857 million in PCB case, jury finds-NYT
• Shopee buys credit arm from Brazil's Warburg Pincus-backed Blu-RTRS
• Pentagon says US, allies agreed create naval task force counter attacks-SAN
• Zee-Sony merger teeters on the brink of collapse-MINT
• Sony says no extension of merger deadline yet, Zee’s shares slip-BBG
• UBS gets €1.2 billion vote of confidence from activist Cevian-BBG
• Activist Icahn prepares a second board challenge at Illumina -letter-RTRS
• Dealmakers to miss $3 trillion mark for first time in 10 years-BBG
• Evergreen to stop accepting Israeli cargo, suspend Red Sea route-RTRS
• Ozempic’s brain impact linked to heart benefits in study-BBG

Oil/Energy Headlines: 1) Mideast oil benchmarks wallow in discounts, lowest since 2020-RTRS 2) Russia’s war in Ukraine revives the Red Sea as a vital oil route-BBG3) Namibia's nascent oil sector prepares for lift-off in 2024-PLATTS 4) Some Canadian oil firms await Trudeau's fate rather than cut emissions faster-RTRS 5) How Houthi attacks in the Red Sea impact shipping in the Suez Canal-RTRS 6) Shipping firms avoid Red Sea as Houthi attacks increase-RTRS