Nasdaq Markets Outlook

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

| next up: 10yr Treasury auction today + US CPI revisions on Friday

| well, so far job market looking good and economy seemingly better than expected... rate cut odds in March dialed back from over 90% to 21% | Fed is congressionally mandated to solve for price stability + maximum employment

-rate cuts priced by the Fed December meeting = up to 122bp

-number of ECB cuts this year = 133bps

-ECB's Schnabel: lower borrowing costs risk flare-up of inflation -FT

* source: Nasdaq Economic Research

* source: Oxford Economics

* source: Goldman Sachs Global Investment Research

* source: Barclays' Emmanuel Cau

| hmmm...on narrow breadth equities rising despite real rates no longer falling

* source: Barclays' Emmanuel Cau

| with yields stabilizing (for now) as rate cut odds getting pared back, earnings are crucial for sustained performance

* source: Barclays' Emmanuel Cau

| Beneath the index surface, much dislocation remains…

* source: Barclays' Emmanuel Cau

| where are we in the cycle?

* source: Piper Sandler

| "In the last week alone we've had 25% of the S&P 500 report across 5 “Mag 7” stocks, Meta see the largest single day gain in dollar terms of any stock in history, New York Community Bank fall over -60%, US Regional Banks fall more than -10%." -Deutsche Bank's Jim Reid

concerns of another banking crisis? commercial real estate screens as one of the top concerns across investor surveys...

Moody's downgraded New York Community Bancorp's long-term debt rating by two notches from Baa3 to Ba2 and into HY territory

* source: CNBC

| Food for thought

*source: Chartr

1) KEY TAKEAWAYS

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

-China Replaces Top Markets Regulator as Xi Tries to End Rout -BBG

-Busy day of Fed speak

DJ +0.2% S&P500 +0.4% Nasdaq +0.4% R2K -0.6% Cdn TSX +0.1%

Stoxx Europe 600 -0.0% APAC stocks MIXED, 10YR TYield = 4.079%

Dollar LOWER, Gold $2,042, WTI +0%, $74; Brent +0%, $79, Bitcoin $43,003

2) Consumers confidence + sentiment hasn't recovered since the pandemic...

* source: Goldman Sachs Global Investment Research

3) "it's very rare for the ECB to cut rates when equities have not been declining for several months. Given that the DAX hit fresh all-time highs yesterday, that's an interesting context in a year where the market expects the ECB to cut 128bps in 2024, likely starting in Q2." -Deutsche Bank's Jim Reid

"The Fed have often first eased when equities were at or close to their highs, alongside other periods where the easing has been more associated with market/economic problems." -Deutsche Bank's Jim Reid

* source: Deutsche Bank

4) Back to FOMO? | "FOMO is in full swing – sentiment/positioning is getting quite bullish" -Barclays' Emmanuel Cau

* source: Barclays' Emmanuel Cau

5) Share buybacks in focus and a source of support... | "Corporate client buybacks accelerated and were above seasonal trends for a 12th consecutive week."

* source: BofA

6) "Given concerns in the market about a possible economic slowdown or recession, have analysts lowered EPS estimates more than normal for S&P 500 companies for the first quarter?

The answer is no."

-Factset Insight

* source: Factset Insight

7) THIS 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

EU Reaches Clean-Tech Deal to Answer the US Tax Credit System - BNN

-Lawmakers and member states agreed to speed up permitting and change the way auctions for new renewables projects are conducted to help support the sector as part of the Net Zero Industry Act. The objective of the law is to manufacture 40% of the bloc’s clean-tech needs within the EU.

Norges pulls plug on 86 companies not pulling their ESG weight in 2023 - IRMag

-In 2023, Norges divested from 86 companies that posed ESG risks and identified companies with heightened risks across a variety of ESG topics, including potential violations of human and labor rights, insufficient risk management related to corruption and business models highly exposed to thermal coal. In total, NBIM has made 526 divestment decisions since 2012.

3) MARKETS, MACRO, CORPORATE NEWS

• Fed Reserve official: hot labor market will not derail plans interest rate cuts-FT
• Additional BOJ hikes seen by some once negative rates end-NIKKEI
• Lower borrowing costs risk ‘flare-up’ of inflation, warns ECB policymaker-FT
• BOE told to rethink QE asset sales costing UK taxpayers billions-BBG
• Auto loan delinquency revs up as car prices stress budgets-LBT
• Yellen says commercial property is a worry, but regulators are on it-BBG
• China replaces top markets regulator as Xi tries to end rout-BBG
• Uncertainty creeps back US Treasury market after Fed, blockbuster data-RTRS
• NYCB extends $4.5 billion stock rout to lowest level since 1997-BBG
• Hedge funds trading treasuries to be tagged dealers by SEC-BBG
• Joe Biden blames Donald Trump for sinking US deal fund Ukraine war effort-FT
• Donald Trump gives US Supreme Court its biggest election test-FT
• Hamas proposes 135-day Gaza truce with total Israeli withdrawal-RTRS
• Trump team targets European Union for punishing trade measures-BBG
• US tells China Yellen wants a 2024 visit as ties stabilize-BBG
• Biden trade chief calls tariffs ‘important defensive tool’-BBG

• Petrobras plans $100bn in spending to persist through ‘fade-out of oil’-FT
• Sinopharm said to renew pursuit of possible China TCM buyout (1)-BBG
• Microsoft in talks to end trade body's cloud computing complaint-RTRS
• Shell kicks off sale of Indian renewable energy unit Sprng-MC
• Shein seeks Chinese regulators’ tacit approval for US public offering-FT
• Standard Chartered taps political heavyweights as potential new chair-FT
• Star China banker’s disappearance made his firm a buyout target-BBG
• Nvidia chip prices soar in Asia as US export curbs, AI boom drive demand-FT
• New York Community Bancorp dealt fresh blow by Moody’s downgrade-FT
• Snap shares sink 30% as revenue falls short of Wall Street expectations-FT
• Boeing 737 Max in door panel blowout lacked four bolts, regulator says-FT
• ESPN, Fox and Warner Bros. Discovery to launch joint sports streaming platform this year-CNBC

Oil/Energy Headlines: 1) US Oil output expected to flatline until 2025, easing glut concerns-BBG 2) Venezuela oil industry fears losing ground if US revives sanctions-BBG 3) India will be world's biggest oil demand growth driver through 2030, IEA says-RTRS 4) Exxon raises Guyana's oil production to about 645,000 barrels per day-RTRS 5) Market Movers Americas, Feb 5-9: US steel scrap negotiations begin amid uncertainty; transit delays to impact coal prices-PLATTS 6) FUJAIRAH DATA: Oil product stocks climb as Al-Zour refinery raises production-PLATTS 7) Norway's Equinor pledges stable oil and gas output to 2035 after Q4 surge-PLATTS