Nasdaq Markets Outlook

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

| America has the Magnificent 7, Europe has the GRANOLAS = 1/4 of STOXX 600

GSK, Roche, ASML, Nestle, Novartis, Novo Nordisk, L'Oreal, LVMH, Astrazeneca, SAP, and Sanofi

| on a sidenote, will Tesla get dropped from Mag 7? -BBG

* source: Goldman Sachs Global Investment Research

| "The S&P 500 has risen for 14 of the last 15 weeks, closing at record weekly highs for each of the last 5. The index is already up 5.4% for the year, splitting the performance of the growth-focused NASDAQ Composite (+6.5%) and the value-oriented Dow Jones Industrial Average (+2.6%)

...Bitcoin last week rose 14%, closing at its highest level since December 2021. That’s all happened in spite of rising interest rates and a stronger US Dollar index, which were major headwinds to stocks in 2022 and 2023."

-Grindstone Intelligence

* source: Goldman Sachs Global Investment Research

interesting to note long only positioning is neutral

* source: BofA

market breadth is not very encouraging

* source: Goldman Sachs Global Investment Research

| "the new high in the S&P 500 is not necessarily indicative of the performance trends of most stocks in the index. Today the average correlation between each stock in the S&P 500 and the headline index is well below the long-term average at 42%." -Piper Sandler

| "Conversely, the average correlation for small cap stocks is well above typical levels. In other words, the S&P 500 is at new highs but that does not represent the average large cap stock. Meanwhile, the S&P 600 has gone nowhere and that does a better job of representing the average small cap stock." -Piper Sandler

* source: Piper Sandler

US10YR yield has stabilized around the 4% level...

* source: John Stoltzfus, Oppenheimer Asset Management

it is still mostly about the Fed...

* source: BofA's Savita

* source: Goldman Sachs Global Investment Research

1) KEY TAKEAWAYS

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

-Fedspeak today

-US CPI tomorrow

DJ +0.0% S&P500 +0.0% Nasdaq -0.1% R2K +1.2% Cdn TSX +0.1%

Stoxx Europe 600 +0.4% APAC stocks MIXED, 10YR TYield = 4.173%

Dollar HIGHER, Gold $2,016, WTI -0%, $77; Brent -0%, $82, Bitcoin $48,649

2) Rich Valuations: "The S&P 500 forward earnings multiple ended the week trading at 20.5 times the next 12-month earnings estimates. That’s 6.2% above its five-year average forward multiple and 14.2% below its five-year high of 23.9x in 2020."

* source: John Stoltzfus, Oppenheimer Asset Management

starting to look expensive?

* source: JP Morgan Asset Management

will returns broaden over the year?

* source: BofA's Savita

3) #QualityMatters |"The Quality At A Reasonable Price (QuARP) trade continues to march higher in large caps, small caps, value and growth universes." -Piper Sandler

* source: Piper Sandler

4) Performance last week...Growth continued to outperform | Small caps outperformed

* source: Factset, produced by Gavin Zaentz

* source: Piper Sandler

5) THIS WEEK:

US: inflation + retail sales

Europe: all eyes on inflation + the labor market + growth indicators in the UK

China: inflation data

Earnings: Coca-Cola, Kraft Heinz, Cisco, and Applied Materials.

* source: Barclays' Emmanuel Cau

2) ESG, COMPILED BY NATHAN GREENE

HSBC caves to investor pressure on capital markets emissions - FT

-HSBC will start disclosing off-balance sheet emissions in its annual report later this month, after investors pressured the bank to stop leaving out swaths of data from its climate calculations.

-The change means the UK’s largest bank will now include emissions linked to capital raises on which it advises fossil fuel companies, an area which investors have until now seen as a climate blind-spot for banks.

Barclays to end direct financing of new oil and gas fields - BBC

-Barclays has announced it will no longer provide direct funding for new oil and gas projects. The banking giant also says it will restrict lending to energy businesses that plan to expand their fossil fuel production.

3) MARKETS, MACRO, CORPORATE NEWS

• How low will rates go? The hunt for the elusive ‘neutral’ level-FT
• Economists haven’t been this critical of a tight fed in 13 years-BBG
• Bank of England start cutting interest rates May inflation on way target-CITYAM
• UPDATE 3-Biden calls on snack companies to stop 'shrinkflation" rip-offs-RTRS
• China’s consumers tighten belts even as prices fall-FT
• German economy probably stalled at start of 2024, survey shows-BBG
• Germany’s office property slump accelerates with record drop-BBG
• EU agrees on looser fiscal rules to cut debt, boost investments-RTRS
• Treasury admits inflation will rise again this week-TIMES
• UK employment rate in private sector falls to lowest in a decade-TIMES
• Once-bitten Europe is better prepared for Trump’s NATO tirades-BBG
• Austin transfers duties to deputy after 2nd hospitalization this year-AXIOS
• Israeli military rescues two hostages held in the Gaza city of Rafah-AXIOS

• Myer launches buyer search for trio of fashion labels; KPMG hired-AFR
• Engaged Capital gains support of VF heirs to shake up North Face owner-RTRS
• FAA chief to meet with Boeing in Seattle next week-RTRS
• Disney, Reliance merger discussions reach last lap-ECON
• Warehouse owner Tritax agrees £4bn merger deal-TIMES
• Total boss warns governments risk mis-selling energy transition-FT
• Buyout barons KKR set to win battle for British Gas smart meter installer-TELE
• Diamondback, Endeavor in talks to form $50 billion energy giant-BBG
• Sony Music buys stake Michael Jackson catalog, valuing rights over $1.2B-BB
• Virgin Media revives TalkTalk takeover as cash crunch looms-TELE
• Exclusive-Unilever CEO pursuing strategic shift with Peltz's backing-RTRS

Oil/Energy Headlines: 1) Iraq committed to OPEC, will not produce more than 4 mln bpd -minister-RTRS 2) Europe’s oil demand is lifting prices in West Africa and the North Sea-BBG 3) Diamondback in $26 bln deal to buy Endeavor Energy in growing Permian push-RTRS 4) Ships shun Red Sea and Suez Canal despite reduced Houthi menace-FT 5) Russia says it foiled Ukrainian drone attack on civilian cargo ships in Black Sea-RTRS