Nasdaq Markets Outlook

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

Columbus Day - Bond Markets are Closed | "The era of low rates and quantitative easing can’t be described as a smashing success. Central bankers and their academic cheerleaders say they spared us a Great Depression-esque deflation after the 2008 financial panic and the pandemic. But their policies badly distorted investment decisions, pumped up asset prices and fueled some of the biggest peacetime fiscal blowouts on record. Then came the worst inflation in 40 years."

-The Wall Street Journal Editorial Board, Welcome Back, Bond Market

* source: BofA's Michael Hartnett, The Flow Show

| "Real interest rates have risen across the curve as investors have become less confident that the Fed will cut next year and have raised their long-term rate expectations too." -Goldman Sachs Global Investment Research

* source: Goldman Sachs Global Investment Research

| "Equity markets have been at the whim of rates markets since summer. But while bonds have cheapened, resilient growth and earnings cushion equities, for now. So the battle b/w the two asset classes remains tense." -Barclays' Emmanuel Cau

* source: Barclays' Emmanuel Cau

| "Nonfarm payroll growth blew past expectations in September...boost the odds of a rate hike" -Oxford Economics

"Earnings growth continues to be too strong for the Fed, although most measures of wage growth are moving in the right direction."

-Oxford Economics

* source: Deutsche Bank

| 2023 Q3 earnings for S&P 500 | "Consensus expects 2% sales growth, 55 bp of margin contraction to 11.2%, and flat EPS relative to last year. Excluding Energy, S&P 500 earnings are expected to grow by 5%. We maintain our S&P 500 EPS estimate of $224 (+1% growth) for 2023 and $237 (+5% growth) for 2024. We forecast S&P 500 EPS will grow by 5% in 2025." -Goldman Sachs Global Investment Research

* source: Goldman Sachs Global Investment Research

| "The ISM surveys in our view suggest that business conditions were holding steady in September—neither accelerating nor slowing markedly." -Oppenheimer Asset Management, John Stoltzfus

* source: Oppenheimer Asset Management, John Stoltzfus

| Everyone bearish but nobody selling...

* source: BofA's Michael Hartnett

| "Stocks with high earnings uncertainty (dispersion) has been shunned by investors while stocks with the highest realized earnings growth have been bid up." -Piper Sandler

* source: Piper Sandler

1) KEY TAKEAWAYS

1) Equities LOWER / Oil + Dollar HIGHER on geopolitical concerns | Bond markets closed

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

Stoxx Europe 600 -0.2% APAC stocks LOWER, 10YR TYield = CLOSED

Dollar HIGHER, Gold $1,846, WTI +3%, $85; Brent +3%, $87, Bitcoin $27,492

* source: CNBC

* source: Piper Sandler

2) Week in Review: Tech + Comms outperformed while Energy (falling oil prices), Staples & Utes (defensive sectors) underperformed.

* source: Factset, prepared by Gavin Zaentz

* source: Piper Sandler

3) Food for thought...

* source: Piper Sandler, Michael Kantrowitz

* source: BofA

4) "After index-level declines in August and September, breadth is weaker than it's been all year."

* source: Grindstone Intelligence

5) THIS WEEK:

2) ESG, COMPILED BY NATHAN GREENE

OFF TODAY

3) MARKETS, MACRO, CORPORATE NEWS

Israel says it has regained control of towns outside Gaza-FT

• ‘We need to conquer Gaza’: Netanyahu faces demands for ground offensive-FT
• Iran denies its security forces ‘helped plan Hamas attack on Israel’-Telegraph
• Hamas attack thrusts Palestinians back into center of Mideast-BBG
• US to send military ships, aircraft closer to Israel-RTRS
• House GOP sees speaker vote on track as Israel adds to urgency-BBG
• Middle East conflict adds new risks to global economic outlook-RTRS
• China price pressure offers hope of Christmas cheer for western shoppers-FT
• German industrial production shrinks for fourth month-BBG
• Drop in euro zone investor mood slows in October – survey-RTRS
• China's cross-border trips during Golden Week holiday recover to 85%-RTRS
• China's Country Garden eyes debt deal, Evergrande creditors liquidation-RTRS
• Lukewarm China holiday home sales underscore economic woes-BBG
• Global investors shun Chinese stocks despite better data-Nikkei
• Profit warnings to hit S&P 500 as high rates pinch consumers-WSJ
• Hedge funds sell energy stocks before Middle East conflict – Goldman-RTRS
• Europe's Luxury stocks at risk of going out of style-RTRS
• Lagarde: confident over 2% inflation target, Europe's winter gas situation-RTRS
• Microsoft to debut AI chip next month that could cut Nvidia GPU costs-INFO
• Peltz boost Disney stake, seeks board seat for himself -WSJ-RTRS
• Tesla's China-made EV sales volume falls 10.9% year-on-year in Sept-RTRS
• Italy’s Treasury keen to stick with KKR plan for TIM grid, source says-RTRS
• Renewi shareholders want Macquarie to raise bid-LT
• AutoNation’s Manley may launch rival bid for motor dealer Pendragon-LT
• IAG, Airbus, in talks, Boeing for potential British Airways widebody order-BBG
• Birkenstock eyes pricing IPO at top of range, sources say-RTRS
• NatWest and Lloyds among rivals weighing bids for parts of Metro Bank-FT
• UAW says 4,000 union workers at Mack Trucks will strike Monday-BBG
• Bristol-Myers Squibb to acquire Mirati in up to $5.8 billion deal-CNBC
• Citigroup to sell China consumer wealth business to HSBC-RTRS

Oil/Energy Headlines: 1) Oil price jumps to $89 a barrel following Hamas’s attack on Israel-FT 2) OPEC+ ready to take additional measures if needed after attack on Israel-Platts 3) OPEC boosts oil demand forecast to 2045 despite climate crisis-BBG 4) Oil traders wary as gasoline demand shows signs of cracking-BBG 5) Turkey has yet to notify Iraq on oil pipeline, Baghdad says-RTRS