Nasdaq Markets Outlook

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

#marketseverywhere | "the astonishing rally in November and long positioning has led to some scepticism about how much further it’s [markets] able to run, at least until we get some more data that’s soft-landing friendly." -Deutsche Bank, Jim Reid

| Russell 2000 (Small Cap) > QQQ (Tech heavy) every day this month

| "December is seasonally the strongest month. The S&P 500 posted positive returns 78% of the time in December since 1936, gaining 2.2% on average (2.0% median)." -BofA's Savita

| market breadth also improving...

* source: Goldman Sachs Global Investment Research

| lots of chatter around gold as it hit an all time high

| "below is price of gold adjusted for inflation" / "although we have hit all time highs in nominal terms, we are over 20% below the inflation-adjusted peak seen in 1980

...we are only 15% above the peak during the American Civil War in the 1860s, when inflation was very high

...although Gold might seem like it’s a good inflation hedge, it only keeps pace with inflation if you buy it at the correct time.

In reality, it trails traditional assets over almost all medium to long-term time periods...since 1800 Gold has a real return of +0.32% per annum against +3.07% on a 10yr US government bond (or equivalent) and +6.83% on US equities. So it struggles on a competitive basis.

Even since the fiat "inflationary" era begun in 1971, Gold's real returns are +1.3% p.a., against +2.41% on 10yr Treasuries and +6.53% on US equities. So, the relative performance gap narrows a bit but not decisively."

-Deutsche Bank, Jim Reid

* source: Deutsche Bank, Jim Reid

| Hedge Funds + Mutual Funds have boosted exposure to the equity market

| Passive continues to see flows over and above active...

* source: Goldman Sachs Global Investment Research

| S&P500 profit taxing / tax loss selling season...

Healthcare/ staples = greatest number of companies w/ losses >20% (tax loss selling potential)

Tech and consumer disc. names = broadest gains of >50% YTD

(profit taking potential)

* created by: Prabhdeep Sagoo, Nasdaq

| Large cap Growth vs Value

* source: Grindstone Intelligence

| Gold broke above a resistance level / bitcoin "digital gold" has been rallying also...

* source: Grindstone Intelligence

| Small Caps have been performing well as of recent...

| Some outperformance by Value / historically Dec has been a good month for Value

| Strong balance sheets have been a consistent outperformer this year as #QualityMatters

* source: Goldman Sachs Global Investment Research

| FCI - Financial Conditions Index has been easing as of late providing a boost to risk assets | Peak Rates...rate cuts ahead?

* source: Deutsche Bank

| This year is characterized by #QualityMatters | "Quality has been a universal theme in nearly every market and sector" -Piper Sandler

* source: Piper Sandler

1) KEY TAKEAWAYS

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

big week for jobs data...

DJ -0.4% S&P500 -0.3% Nasdaq -0.1% R2K -1.0% Cdn TSX -0.1%

Stoxx Europe 600 +0.2% APAC stocks LOWER, 10YR TYield = 4.216%

Dollar HIGHER, Gold $2,017, WTI +1%, $74; Brent +1%, $79, Bitcoin $42,129

2) Nasdaq Equity Investor Flows by Mashaal Tahir

-Indexers continue to be the big buyers with concentrated activity in the Financials and Healthcare sectors

-Institutionals reversed some of their selling as they bought in the Healthcare sector and sold some in the Financial sector

-Hedge Funds were also buyers as they moved into the Technology and Financial sectors

-Retailers were net sellers and sold the Technology sector

* source: Nasdaq Equity Investor Flows

2) THIS WEEK:

"The US jobs report on Friday will be the highlight of the week, with the University of Michigan data also in focus.

Other notable releases include economic activity indicators in Germany, wages in Japan, and trade in China.

From central banks, there will be the ECB's consumer expectations survey and
the BoE's inflation attitudes survey. Monetary policy decisions are also due from
the central banks of Canada and Australia."

-Deutsche Bank

* source: Barclays' Emmanuel Cau

2) ESG, COMPILED BY NATHAN GREENE

Carbon-Credit Derivatives Get More Scrutiny From US Regulator - BNN 

A key U.S. regulator is planning to put in place guardrails for the fast-growing market for voluntary carbon-credit derivatives. 

The Commodity Futures Trading Commission on Monday floated fresh guidance for exchanges that want to list futures or other derivatives products based on carbon credits. Critics say the market lacks transparency and could be manipulated by fraudsters.

Chevron, Exxon Opt Out of Funding COP28 Methane-Cutting Fund - Yahoo

Six major oil companies each contributed tens of millions of dollars to a grant fund meant to help state-owned rivals cull the release of super-warming methane emissions, but Chevron Corp. and Exxon Mobil Corp. didn’t join in.

3) MARKETS, MACRO, CORPORATE NEWS

• Fed rate cuts look viable as inflation cools and job market stabilizes-AXIOS
• RBA holds key rate to assess economy, sending currency lower-BBG
• ECB hawk Schnabel takes rate hike off after 'remarkable' inflation drop-RTRS
• Inflation has depleted pandemic-era savings for many Americans-BBG
• China's Nov services activity accelerates boost from new orders-PMI-RTRS
• Japan's Nov service activity grows at slowest pace in a year – PMI-RTRS
• Tokyo inflation slows, supporting BOJ’S view on cooling prices-BBG
• South Korea’s inflation slows in relief for Central Bank-BBG
• Global manufacturing inventories up 30% in 4 years as China slows-NIKKEI
• Fall in euro zone Nov business activity adds  recession expectations -PMI-RTRS
• Britain's dominant services sector rebounds, cost burdens persist-RTRS
• UK public inflation expectations rise in October -Citi/YouGov-RTRS
• German companies cut investment plans as economic gloom deepens-FT
• Germany’s budget crisis threatens chipmaking ambitions-FT
• Investors hope for road map for China’s economy-FT
• Moody’s cuts China’s credit outlook to negative-FT
• Israeli soldiers start invasion of Gaza’s south, satellite images show-NYT
• Israel considers flooding Gaza tunnels with seawater- WSJ-RTRS 

• J&J is pushing to settle baby powder cases linked to Asbestos-BBG
• Novo Nordisk seeks to use obesity drug findings to prevent weight gain-FT
• Airbus might need state backing for new aircraft program to replace A320-FT
• Aboriginal group calls for Sandfire CEO step down after heritage damage-RTRS
• Medibank Private secures binding deal to lift Myhealth stake-AFR
• CNBC-TV18 Exclusive: Bank of India plans ₹3,500-4,000 crore QIP-CNBC
• Ericsson shares jump after AT&T deal win, Nokia drops-RTRS
• Birkenstock finally tops IPO price while other entrants struggle-BBG
• Foxconn raises growth outlook amid strong year-end holiday sales-RTRS
• Ford's November US vehicle sales slip, EV sales rise-RTRS
• Global banks face negative outlook, property stress in 2024 - Moody's-RTRS

Oil/Energy Headlines: 1) US might reimpose sanctions on Venezuela following vote to annex Guyana territory-PLATTS 2) Black sea storms batter Russian crude exports to three-month low-BBG 3) Kremlin says OPEC+ output cuts will kick in later, confirms Putin to visit Gulf-RTRS 4) World's major oil producers spurn fossil fuel phase-out in net zero push – research-RTRS 5) Exclusive: ECB hawk Schnabel takes rate hike off table after 'remarkable' inflation drop-RTRS