Nasdaq Markets Outlook

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

#marketseverywhere | US Treasury yields, oil (inflation concerns), and dollar all recently climbing 

| Bloomberg’s aggregate global bond index down to its lowest level of 2023 so far

| M&A globally have hit a 10-year low as high interest rates chill private equity activity -FT

· Fed’s ‘higher for longer’ message hits US stocks + bonds-FT
· Global market cap drops under $100tn on China jitters, rising rates-NIKKEI
· More CFOs pull back spending plans due to higher interest rates-MSN

* source: CNBC

* source: Yardeni Research

| Recession triggers... | "nothing here is above 80% shows that it's impossible to accurately predict every recession using macro triggers. But it's fair to say that the most significant ones have been breached this cycle and that the US tends to be more sensitive to these historically" 

-Deutsche Bank, Jim Reid

* source: Deutsche Bank, Jim Reid

| THEMES: persistent moderate inflation a risk | yield back-up + dollar rising | Fed = hawkish skip + rate cut expectations dialed back | "this year has been all about owning quality growth stocks" + high interest coverage stocks | a bifurcated market: wide gap between large cap and small cap performance | monetary tightening = equities compete w/ cash & bonds | drag on the economy = auto strikes, government shutdown, student loan payments ... | continued strong labor market | consumer confidence weakening 

| Earnings season around the corner, can corporates hold up? | October seasonally weak for markets | Can the consumer hold up with higher rates biting + gas & food prices rising? 

-by Shon Wilk, Nasdaq

1) KEY TAKEAWAYS

1) Equities MIXED + Oil LOWER + TYields HIGHER | UAW strike against automakers continues | US government shutdown end of the week?

| S&P 500 on track for its worst monthly decline since Dec 2022 | VIX (equity volatility) + MOVE Index (interest rate volatility) climb...

| AAII Weekly Retail Sentiment: Bullish + neutral fell while bearish rose

* source: CNBC

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

Stoxx Europe 600 +0.1% APAC stocks LOWER, 10YR TYield = 4.653%

Dollar LOWER, Gold $1,875, WTI -1%, $93; Brent -1%, $96, Bitcoin $26,500

2) Mortgage rates approaching 8% | mortgage applications have cratered

* source: Yardeni Research

3) THIS WEEK:

"Inflation trends will be the key focus following an action-packed couple of weeks for central banks. The main releases include the US PCE inflation, flash CPIs in Europe, and the Tokyo CPI. 

The spotlight will also be on the PMIs from China to gauge momentum in the recent positive economic signals. Notable earnings releases will include Micron, Nike and Costco." -Deutsche Bank

* source: Grindstone Intelligence

2) ESG, COMPILED BY NATHAN GREENE

A Single ESG Fund Category Has Soared More Than 300% in the US - FP

-There’s one ESG fund category that’s outgrowing most others in the US, and it’s dedicated to investing in big CO2 emitters with a view to cleaning them up. Assets in so-called climate transition funds surged 304% to $9.3 billion in the 18-month period ended in June, Morningstar Inc. said in a report on Wednesday.

-Against a backdrop of high energy prices, a selloff in green stocks and GOP attacks on ESG, assets in US climate funds overall still managed to hit a record $32 billion, according to Morningstar.

European Insurers Are Underwriting 30% of US Coal: Study - BNN

-Some of Europe’s biggest insurers are underwriting close to a third of the coal production that takes place in the US, even after pledging to target net zero emissions, according to a report by climate campaign group Insure Our Future.

3) MARKETS, MACRO, CORPORATE NEWS

• Goldman’s Rubner sees deeper stock losses in a ‘no rules market’-BBG
• JPMorgan’s Kolanovic sees no respite as S&P nears 2023 target-BBG
• Bitcoin's refuge appeal being touted again with shutdown prospects rising-BBG
• UAW could expand strikes at Detroit Three on Friday-RTRS
• US economy facing headwinds from possible government shutdown-RTRS
• German inflation on track to slow, regional figures signal-BBG
• Spain inflation jumps, backing higher-for-longer ECB rates-BBG
• France looks at windfall levy to ‘take back control’ of energy prices-FT
• Australian retail sales cool, boosting case to extend rate pause-BBG
• NZ business confidence turns positive in Sept, inflation concerns linger-RTRS
• Argentina risks hyperinflation after election giveaways and dollar pledge-FT
• ECB ‘infinity team’ launches AI experiment to speed up basic tasks-FT
• When is success not success? When Fed gets inflation down to 2.5%-RTRS
• With Trump again absent, Republicans trade barbs at messy debate-STRAIT
• Evergrande halts trading after founder put under police control-BBG
• China’s top developers lost close to $3bn due to weakened renminbi-FT
• China risk growing, say 60% of Japan's corporate heads: poll-NIKKEI
• EV makers could fall under Europe’s subsidy probe into China-CNBC
• China's US envoy urges 'practical' steps to help restore ties-RTRS
• Mystery Russian plane in Pyongyang stokes concerns of arms deals-BBG
• Taiwan unveils first locally built submarine in pushback against China-FT

• Glencore among parties in Chalice’s Gonneville sale-AFR
• Uber taps semiconductor executive as new CFO-BBG
• UBS seeks last-ditch settlement in Mozambique ‘tuna bonds’ case-FT
• US SEC nearing settlement with Wall Street firms over WhatsApp probe-RTRS
• De Grey Mining raising $300m, definitive feasibility study out-AFR
• HSBC to acquire Citigroup China consumer wealth business -sources-RTRS
• Tax authorities visit Nuix to secure files in pre-IPO claims probe-AFR
• Cipla in advanced talks with 2 groups-MINT
• iPhone 15 Pro owners complain about overheating problems-MSN
• Micron is set to drop on forecast for worse-than-expected loss-MSN
• Meta launches AI chatbots for Instagram, Facebook and WhatsApp-FT
• Lululemon strikes deal w/ Peloton for fitness content, will Ax mirror device-BBG
• Jefferies revenue misses estimates on investment banking drag-BBG
• Exxon barred from trucking oil from California offshore platform-BBG
• Toyota's Aug global output rises on stronger domestic production-YAH
• Dealmaking languishes at decade low on private equity drought-FT

• Oil/Energy Headlines: 1) Oil touches $95 with shrinking inventories fanning fresh rally-BBG 2) Cushing oil hub's low levels spur quality, operational, price worries-RTRS 3) Russian oil sold to India at 30% above Western price cap, traders say-RTRS 4) Russia's fuel export ban will not be lifted soon, TASS reports-RTRS 5) Beijing Tells Major Oil Refiners No More Fuel Export Quota in 2023-BBG 6) CHINA DATA: Sep crude throughput likely to hit record high on robust holiday demand-PLATTS 7) Mexico's Pemex struggles to boost oil refining in August as fuel imports rise-RTRS