Nasdaq Markets Outlook

The Markets Outlook is a mostly graphical daily curated roundup of the markets and the economy from Nasdaq's IR team.

| Wholesale prices (PPI) headline +0.3% MoM in July, >expected | YoY headline +0.8%, core (ex food + energy) +0.3% MoM; +2.7% YoY -CNBC

· Fed seen pausing after tame CPI data, but mission not over –BBG
· ECB to pause in September, say slim majority of economists –RTRS

source: Oxford Economics

| 31% of another rate hike by year end | 99.8% chance of rate cuts in 2024 with 27% odds of 1.25% cut -CME FedWatch

| The big picture: "August is choppy, as expected, with technicals/positioning no more a tailwind for stocks, and some soft landing fatigue. Data remain supportive, despite re-emerging inflation risks." -Barclays' Emmanuel Cau

* source: Barclays' Emmanuel Cau

"Record Treasury inflow yet Yields don’t fall" -BofA's Hartnett

* source: BofA's Michael Hartnett

Yields not falling, inflation expectation rising...?

* source: Yardeni Research

"But skepticism reigns, evidenced in the following 5 FAQs from clients"

Q: Can consumer resilience last with rates this high?

Q: What’s the impact of tighter lending standards today?

Q: Is the VIX too low? Doesn’t this smack of complacency?

Q: What else could “break”?

Q: What looks better, US equities or rest of world?

* source: BofA's Savita

Money Market Funds continue to see inflows...all-times highs this week
"Cash: strong inflows…$145bn QTD, faster inflows than in Q2"

* source: BofA's Michael Hartnett

1) KEY TAKEAWAYS

1) Equities LOWER + TYields HIGHER | UMichigan Consumer Sentiment data out at 10AM

| Weekly AAII (retail) sentiment: Bullish + neutral ticked down. Bearish rose

| China property market + economic concerns? Country Garden Expects First-Half Loss of Up to $7.6 Billion -BBG| China to Shift $139 Billion of ‘Hidden’ Local Debt to Provinces -BBG

| next week: retail earnings

DJ -0.1% S&P500 -0.4% Nasdaq -0.8% R2K -0.2% Cdn TSX -0.2%

Stoxx Europe 600 -1.2% APAC stocks LOWER, 10YR TYield = 4.148%

Dollar HIGHER, Gold $1,912, WTI +0%, $83; Brent +0%, $87, Bitcoin $29,434

2) Chinese and European economic surprise index rebounding?

* source: Barclays' Emmanuel Cau

3) notable YoY price changes from CNBC

* source: CNBC

4) Yesterday's MoM CPI July breakdown

* source: Piper Sandler

5) "Is Expensive Food Here To Stay? Look at these epic food price level upshifts." -Piper Sandler

Will Beef And Chicken Follow Pork Prices Down? 

"Milk (blue dotted line, top chart) and coffee prices have cooled a bit (orange line, below), but sodas and alcohol are proving sticky – so far."

* source: Piper Sandler

6) the low VIX... | "the VIX is not a mean reverting measure - spikes can be followed by years of low volatility like we saw in the mid 90s and from 2005 to 2008. The slope of the yield curve has been a good long-lead (3-year) predictor of changes in the VIX and represents liquidity – as liquidity is pushed into markets, it tends to suppress volatility, and as it is withdrawn it tends to amplify volatility" -BofA's Savita

* source: BofA's Savita

7) CPI (inflation) + Small Biz Optimism + Consumer Survey = highlights this week

* source: Grindstone Intelligence

2) ESG, COMPILED BY NATHAN GREENE

OFF TODAY

3) MARKETS, MACRO, CORPORATE NEWS

RBA governor says policy has now entered ‘Calibration Phase’ - BBG

• The hard landing is here for trade, roiling world export champs – BBG
• Hollywood studios preparing new offer for striking writers – BBG
• UK economy picks up pace in second quarter – FT
• UK economy's surprise strength puts more BoE rate hikes on table – RTRS
• Exports down 15.3 pct during first 10 days of Aug. – YNA
• China's July bank loans tumble to 345.9 bln yuan, below forecasts – RTRS
• China group tourism revival clouded by weak economy – Nikkei
• Moody's cuts ratings of Chinese developer Country Garden – RTRS
• Country Garden expects first-half loss of up to $7.6 billion – BBG
• Country Garden’s losses fan fears on China property market – BBG
• China regulator to hold meeting with property firms, financiers – BBG
• China to shift $139 billion of ‘hidden’ local debt to provinces – BBG
• China sends finance experts to tackle regions’ debts – FT
• Thousands of tiny hedge funds face closure in China shakeup – BBG
• Yen within sight of 145 per dollar on wide Japan-US yield gap – BBG
• Biden fears China is ‘Ticking Time Bomb' posing danger to world – BBG
• US investors flag retaliation risks after Biden's China tech curbs – RTRS
• US investors face uncertain future in China after tech ban – FT
• Biden asks Congress for billions more in Ukraine funding – Axios
• Biden seeks $13 billion for Ukraine defense as GOP protests – BBG
• Joe Manchin says thinking ‘Seriously’ about leaving the democratic party - NYT
• Blackstone-backed solar company Esdec seeks IPO at $5 billion – BBG
• Coronado drops out of race for BHP mines – TA
• Qantas in firing line for price gouging inquiry – AFR
• Liontown shifts from buyout to equity raising – TA
• South32, Sandfire on common ground – TA
• Bharat Forge wants to become global artillery house – CNBC
• US supreme court halts Purdue’s $6 billion opioid pact, will hear appeal – BBG
• Global corporate earnings dip amid flagging China demand – Nikkei
• UBS ends $10 billion state backstop that helped seal merger – BBG
• Microsoft’s role in email breach to be part of US cyber inquiry - BBG

Oil/Energy Headlines: 1) IEA flags risk of higher oil prices, cuts 2024 demand view-RTRS 2) OPEC data suggest 2 million-barrels-a-day oil supply deficit as Saudis cut-BBG 3) Saudi oil flows to China set to soar despite global supply curbs-BBG 4) India’s Russia oil buying spree goes on even as prices rise-BBG 5) Russia oil breaches price cap as export revenue hits 2023 high-BBG 6) Oil benchmark Brent's price structure reflects tighter market-RTRS 7) Iran transfers five imprisoned Americans to house arrest-FT