Nasdaq Markets Outlook

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

#marketseverywhere | Volumes light yesterday, stuck in pre-FOMC (Fed) holding pattern... 

| THEMES: recent inflation data = sticky, will rate cut expectations be dialed back? | FOMC meeting kicks off today, 99% chance of rates unchanged | IPO market to improve? (Instacart Prices IPO at $30 a Share, at Top End of Range) | volatility eerily quiet | "this year has been all about owning quality growth stocks" | wide gap between large cap and small cap performance | monetary tightening = equities compete with cash & bonds

-by Shon Wilk, Nasdaq

* source: Goldman Sachs Global Investment Research 

1) KEY TAKEAWAYS

1) Equities LOWER Oil + TYields HIGHER

| UAW strike against automakers = 4th day, no resolution / most hours of work missed in 23 years 

| The push toward zero-cost exchange-traded funds nears the finish line -WSJ 

| VIX trading at historic lows, volatility is dead, eerily quiet... | S&P 500 Stock Index Marks 100 Days Without 1.5% Drop, First Time Since 2018 -BBG

* source: Yardeni Research

Brent (oil) = $95+ overnight, highest level since last Nov & 33% above June low 

* source: Oxford Economics 

DJ -0.2% S&P500 -0.3% Nasdaq -0.4% R2K +0.3% Cdn TSX -0.4% 

Stoxx Europe 600 -0.1% APAC stocks MIXED, 10YR TYield = 4.349% 

Dollar LOWER, Gold $1,933, WTI +1%, $93; Brent +1%, $95, Bitcoin $27,185 

2) Performance

Cyclicals vs Defensives - no clear direction after Q2 rally in cyclicals...

Growth (large cap) is back this year...

Yield Sensitive / Defensive / Recovery stocks have been underperformers 

(charts relative to S&P 500) 

Quality Growth Stocks represented in Tech space have been outperformers 

(charts relative to S&P 500) 

* source: Goldman Sachs Global Investment Research 

3) Nasdaq Investor Flows by Bill Bailey

Institutional investors = de-risking last week + a primary source of the pressure on the major indices. Pressure across all sectors and market caps except energy stocks

continue to see healthy index flows which remains a consistent theme this year.

As retail traders take pause in individual stocks, we seem them allocate money more into various Exchange Traded Products.

* source: Nasdaq 

4) Lowest number of S&P 500 companies citing “ESG” on earnings calls since Q2 2020 -Factset Insight 

5) FOMC meeting highlight of the week 

* source: Grindstone Intelligence 

* source: JP Morgan Asset Management 

6) YTD performance...(as of Friday closing price)

2) ESG, COMPILED BY NATHAN GREENE 

Asset Managers Rebuffed as EU Cracks Down on Use of ‘ESG’ - BNN

-Europe’s markets watchdog says it isn’t backing down from a controversial plan to restrict the use of “ESG” and “sustainability” in fund names, despite a barrage of criticism from asset managers.

-ESMA’s proposal, first unveiled in November, requires that a fund calling itself “ESG” have at least 80% of its assets promoting ESG goals. A fund calling itself “sustainable” — or a related term — needs at least 50% of its assets to live up to that name.

UK offers $300 mln guarantee for Asia and Pacific climate fund - Reuters 

-Britain will provide guarantees of up to $300 million to a climate funding facility designed to help reduce greenhouse gas emissions and build infrastructure resilient to the impact of climate change in Asia and the Pacific.

-The guarantee will go to the Innovative Finance Facility for Climate in Asia and the Pacific (IFCAP), a leveraged guarantee mechanism for climate finance which was announced in May by the Asian Development Bank. 

3) MARKETS, MACRO, CORPORATE NEWS 

• US Federal Reserveset to hold interest rates but leave tightening in play-FT
• The Fed wants to cool spending; strike, shutdown, student loans-RTRS
• UK inflation expected to tick up, complicating talk of BOE pause-BBG
• RBA discussed raising rates again in September, opted to pause-BBG
• Stellantiscould close 18 facilities under UAW deal-CNBC
• Hedge fund bets could spark turmoil in US Treasuries, BIS warns-FT
• OECD raises 2023 global growth outlook, cuts 2024-RTRS
• Euro zone Aug inflationrevised slightly down-RTRS
• PBOCmeets JPMorgan, Tesla to vow foreign business support-BBG
• US national debt tops $33Tfor first time ever-NYT
• Trump to woo striking union members, skipping 2nd G.O.P. debate-NYT
• The global economyenters an era of upheaval-BBG
• Ueda abandons ‘shock and awe’on path toward BOJ normalization-BBG
• ECB to keep interest rates at 4%as long as needed, Villeroy says-BBG
• S&P 500 marks 100 days without 1.5% drop, first time since 2018-BBG
• McCarthy’s plan avert US government shutdownfaces backlash from GOP-BBG
• Blinken meets Chinese Vice President on UN assembly in New York-BBG 
• NYC casino race could be upended by Las Vegas bookie scandal-NYPOST

• TSMC tells vendors to delay chip equipment deliveries, sources say-RTRS
• Carrier explores listing commercial, home-fire units-BBG
• Rio Tinto CEO says Chinese steel demand is close to peaking-BBG
• Instacart is planning to sell shares in IPOfor $30 or more-BBG
• Hitachi seeks EU okay Thales deal with asset sales in France, Germany-RTRS
• Amazon considers new subscription plans, One Medical integration w/ Prime-BI
• Instacart prices shares at $30as IPO market warms up-FT
• Microsoft Plans for Xbox RefreshRevealed by FTC Case Documents-BBG
• Macy'sto hire more than 38,000 employees for holiday season-RTRS

• Oil/Energy Headlines: 1) Saudi Arabia’s energy minister says oil cuts not about ‘jacking up prices’-FT2) Funds grow bullish on crude, cautious on distillates-RTRS3) US oil output from top shale areas to fall for 3rd straight month in October, EIA says-RTRS 4) Saudi Arabia's crude exports drop to two-year low in July-RTRS 5) Fed faces familiar foe as oil prices threaten growth, inflation-BBG