Nasdaq Markets Outlook

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

#marketseverywhere | "There has rarely been a period in history when so few stocks have driven the whole market higher, leaving the rest languishing behind." -Jim Reid, Deutsche Bank 

* source: CNBC 

| BofA Global Fund Manager Survey for September: "investor sentiment no longer extreme bearish (17-month high in global equity allocation), but not yet bullish...record jump in US, record fall in EM equities as China growth optimism slumps back to "lockdown lows"" 

| institutional investors catching up with retailers

|  US equities > Emerging Markets equities 

| global growth expectations remain pessimistic 

| peak disinflation + big conviction Fed will cut rates

| Rate cuts!!! 

* source: BofA's Global Fund Manager Survey, Michael Hartnett

| below is the trajectory of rate cuts across US, UK, EZ...

* source: Factset, Federal Reserve, Nasdaq Economic Research

| biggest tail risks (inflation, geopolitics, systemic credit event...)

| MoM change in allocation... 

|  investor positioning (net %)… 

Bullish: healthcare, cash, staples, technology;

Bearish: UK equities, utilities, real estate, Eurozone equities 

* source: BofA's Global Fund Manager Survey, Michael Hartnett

| equity sentiment remains positive but has been falling...

* source: Goldman Sachs Global Investment Research 

1) KEY TAKEAWAYS

1) Equities  LOWER + TYields MIXED | CPI on Wed in focus

| Apple iPhone event today, expected to launch new phones + watches

| Oracle (-12%) is weighing on the sector after posting slower cloud sales growth

| THEMES: geopolitical scrutiny on some tech names + yield back-up + energy prices rising + peak disinflation? + UAW strike + hedging costs climb + market breadth poor 

DJ -0.3% S&P500 -0.2% Nasdaq -0.4% R2K +0.1% Cdn TSX -0.2% 

Stoxx Europe 600 -0.3% APAC stocks MIXED, 10YR TYield = 4.286%

Dollar HIGHER, Gold $1,915, WTI +2%, $89; Brent +1%, $92, Bitcoin $26,157 

2) Nasdaq Investor Flows by Bill Bailey 

As the broader markets took losses last week and traded down to their respective 50-day Moving Averages, institutional investors took advantage of this latest selloff.

Long-only, smart money group were seen adding on to Industrials + Energy while strategicially finding areas of tech to invest in 

Perhaps not surprising to see them sell consumer discretionary stocks

Retail traders are worth calling out last week as they were heavier sellers adding on to the downward momentum in the markets- especially the technology sector and many of the “big tech” names 

* source: Nasdaq, Bill Bailey 

3) Small business, few signs of sustained credit squeeze 

#PeakDisinflation = near term risks to inflation skewed to the upside... 

* source: Oxford Economics 

4) Markets have travelled far over the last 1.5 years but have not really gone anywhere.. Oil + Equities (Equal Weight) are FLAT YoY...

* source: Deutsche Bank, Jim Reid 

5) lowest number of S&P500 companies citing “inflation” on earnings calls since Q2 2021

* source: Factset Insight

6) where will the economy go? | "Quarterly path of S&P 500 EPS growth, Consensus expects year/year EPS growth troughed in 2Q and will be +9% by 4Q" 

* source: Goldman Sachs Global Investment Research 

7) This week: US CPI (Wed) + PPI (Thurs) + UMich consumer expectation survey (Fri) + ECB decision (Thurs) + labour market / GDP data in the UK. G20 summit kicks off this Saturday.

* source: Grindstone Intelligence 

8) Investors = conservative bias | sentiment moderating | equity inflows have stalled | "Less than half of S&P 500 stocks are in uptrends, whether you look at 20, 50, 100, or 200-day average prices" -Grindstone Intelligence

* source: Grindstone Intelligence

2) ESG, COMPILED BY NATHAN GREENE

California lawmakers approve the nation’s most sweeping emissions disclosure rules for big business - AP

The legislation would require thousands of public and private businesses that operate in California and make more than $1 billion annually to disclose their direct and indirect greenhouse gas emissions.

Bezos Earth Fund's Steer calls for more creative climate finance - Reuters

Calls for changes to the international financial architecture have increased in recent months and changes at the World Bank are likely to be central to talks of the G20 group of nations in Delhi and the COP28 climate talks in November.

3) MARKETS, MACRO, CORPORATE NEWS 

• Paramount parent strikes deal with lenders to refinance debt-SeekingAlpha
• Vitol launches $714m Viva Energy block trade; BoA, UBS nab roles-AFR
• Activist investor spreads its bets with IG Group stake-LT
• Alibaba CEO elevates AI to key priority in group revamp plan-BBG
• Hancock becomes a substantial shareholder in Liontown-Hancock
• ECM teams eye monster Viva Energy block; fundies on high alert-AFR

Oil/Energy Headlines: 1) World at ‘beginning of end’ of fossil fuel era, says global energy agency-FT 2) As Saudi oil cuts raises prices, Asia refineries buy elsewhere-RTRS 3) Canada's Trans Mountain pipeline may face 9-month delay over route dispute-RTRS 4) US allows $6 billion transfer as part of Iran prisoner swap-RTRS5) U.S. advances deal with Iran to swap prisoners, free frozen oil funds-WP 6) Oil investors open to dividend cut to boost clean energy spending-RTRS