Nasdaq Markets Outlook

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

"S&P 500 is flat as rate spike offsets gains from strong tech earnings" -CNBC

| Strong jobs report: +353K jobs in January vs 185K estimate | unemployment at 3.7% | wage growth +0.6% (double monthly estimate); +4.5% YoY

Fed solves for price stability + maximum employment = may not need to cut rates if there is no deterioration in jobs market/economy

* source: CNBC

| "Magnificent 7 = 45% of Jan S&P500 return (71% ex-Tesla) as their market cap ($12.5tn) rises above combined GDP of New York, Tokyo, LA, London, Paris, Seoul, Chicago, San Francisco, Osaka, Dallas & Shanghai." 

-BofA's Michael Hartnett, The Flow Show

* source: JPM AM

| "Good start, bad breadth: S&P 500 rose 1.7% in January, but only 34% of stocks outperformed the index, a bottom 3rd percentile in history."

-BofA's Savita

Small-Mid Caps underperforming relative to S&P 500
while large caps out performing within S&P 500

* source: Yardeni Research

1) KEY TAKEAWAYS

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

-Facebook parent Meta (+17%) initiates dividend as growth continues -WSJ

-"Regional banks are down 7.60% this week as investors digest the fallout from NYCB." -Piper Sandler 

-Activist (Barrington Capital) pushes Mattel to fix American Girl, Fisher-Price brands or sell them off -CNBC

DJ -0.4% S&P500 +0.4% Nasdaq +0.9% R2K -1.2% Cdn TSX -0.3%

Stoxx Europe 600 +0.3% APAC stocks MIXED, 10YR TYield = 3.984%

Dollar HIGHER, Gold $2,035, WTI -2%, $72; Brent -2%, $77, Bitcoin $42,865

2) Earnings: "Q4 earnings not great but good enough Q4 results look unimpressive but have largely come inline with much lowered expectations. Although EPS revisions are negative, positive share price reaction suggests investors are buying into earnings clearing events, while guidance generally reassured."

* source: Barclays' Emmanuel Cau

3) Green shoots visible in European company guidance.

* source: Barcalys' Emmanuel Cau

4) Wave of buybacks could boost stocks -RTRS

corporate buybacks should provide support in several weeks...

"Buybacks are a function of EPS growth and if earnings improves as expected, it augurs well for equity repurchases this year."

* source: Barclays' Emmanuel Cau

5) "ISM offers cautious optimism for manufacturing: details were mixed and there was only passing reference to the global shipping disruptions"

* source: Oxford Economics

6) NEXT WEEK - quieter week ahead:

US: ISM Services | SLOOS - loan officer survey 

Europe: retail sales

China: inflation data

Earnings: Disney, Eli Lilly, and Alibaba

* source: Barclays' Emmanuel Cau

2) ESG, COMPILED BY NATHAN GREENE

Investors pull ExxonMobil climate motion after oil supermajor sues - FT

-“Given Exxon’s preference to fight a battle in court rather than allow shareholders the freedom of a vote at its annual meeting, we decided to withdraw the climate proposal,” Follow This founder Mark van Baal said in a statement on Friday.

-Exxon said it had withdrawn a request for an expedited hearing of its case but that it was not dropping the case. “We believe there are still important issues for the court to resolve. There is no change to our plans, the suit is continuing,” it said in a statement.

Indebted Pemex Sets Long-Awaited Carbon Dioxide Reduction Goals - BNN

-Mexican state-owned oil company Pemex said it increased its carbon dioxide reduction targets through 2027, in an effort to meet the government’s emissions goals through the end of the decade.

-Greenhouse gas emissions from the oil and energy sector must decrease 14% by 2030 in order to fulfill Mexico’s aspirations, the company said in a presentation posted Thursday.

3) MARKETS, MACRO, CORPORATE NEWS

• China pledges to stick with fiscal expansion to spur economy-RTRS
• Japan economy likely returned to growth in Q4, but remains fragile-RTRS
• Germany’s battered coalition is heading for next budget disaster-BBG
• Inflation falls below 3 pct for first time in 6 months in Jan.-YNA
• Investors pile into stocks, dump US Treasuries – BofA-RTRS
• Bond traders are caught offside after NYCB shock sparks stampede-BBG
• Credit markets get a jolt from property losses at banks-BBG
• Fed’s Powell will discuss interest rates, inflation on 60 minutes Sunday-BBG
• IMF Chief says Fed rate cuts are better late than early-BBG
• Hopes for Gaza ceasefire as Hamas ‘agrees deal return Israeli hostages’-TIMES
• Saudi Arabia pushes for U.S. defence pact ahead of presidential election-RTRS
• New China property financing measures set to be tested by banks' cautious approach-RTRS
• Intel delays $20 bln Ohio project, citing slow chip market – WSJ-RTRS
• Mattel draws activist investor seeking changes at toymaker-RTRS
• JPMorgan, BofA in talks to finance $13 billion DocuSign buyout-BBG
• Lynas linked to rare earths mega-merger as price falls bite-AFR
• Barclays shifts focus to buyout firms for UK payments business sale-RTRS
• CVC-owned perfume retailer Douglas is said to kick off IPO soon-BBG
• Hedge fund builds stake in Superdry-TIMES
• Retailer express huddles with lenders over restructuring options-BBG
• Meta shares jump as investors cheer dividend and $50bn buyback-FT
• Amazon predicts cloud growth will gain steam as earnings bounce back-FT
• Apple iPhone target is billions short of Wall Street's as China sales lag-RTRS
• Mattel draws activist investor seeking changes at toymaker-RTRS
• Intel shares dip on report that it’s delaying Ohio chip plant-BBG
• Analysis-Projected buyback revival stands to bolster US stocks in 2024-RTRS
• Activist shareholders target Samsung to unlock value-FT
• Analysis-US regional bank sell-off a cautionary sign of more pain to come-RTRS

Oil/Energy Headlines: 1) US foils attacks off Yemen as Houthis keep targeting Red Sea-BBG 2) OPEC+ committee offers no recommendation on oil quotas, will 'closely assess' market-PLATTS 3) Rising US oil production frustrates OPEC⁺ cuts-RTRS 4) BRICS expansion could see more downstream oil investment: analyst-PLATTS 5) OPEC+ committee offers no recommendation on oil quotas, will 'closely assess' market-PLATTS 6) Trudeau faces daunting path to sale of Canada’s $26 billion oil pipeline-BBG