Nasdaq Markets Outlook

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

"We have an extremely bifurcated macro and market backdrop. While the Magnificent 7 has provided sizable returns thus far in 2023, the Russell Micro Cap index is approaching new cycle lows."

-Piper Sandler, Michael Kantrowitz

| The Bifurcated Market | "The Monopolistic Bull Market: S&P500 up 15% YTD, but ex Magnificent 7 up just 3%; add big gains in Eli Lilly, Blackstone, Costco, Walmart et al to Mag7…. bull market in stocks thus far really bull market in monopolies & oligopolies; good news for equity investors next bull market will begin with lots of cheap stocks…P/E of Magnificent 7 is 31x P/E vs 16x for "S&P493""

-BofA's Michael Hartnett, The Flow Show

* source: Piper Sandler

#ROEMatters | Profitability has worked this year:

outperformance of the ROE factor within most sectors + market caps

* source: Piper Sandler

| OJ keeps climbing!

* source: Grindstone Intelligence

Oil going to $100? | Oil prices rise as Russia fuel export ban stokes supply concerns -CNBC

* source: Grindstone Intelligence

| OTHER THEMES: persistent moderate inflation a risk | yield back-up | Federal Reserve hawkish skip and rate cut expectations dialed back | IPO market to improve? | "this year has been all about owning quality growth stocks" | a bifurcated market: wide gap between large cap and small cap performance | monetary tightening = equities compete with cash & bonds | oil prices climbing - global economic impact? | drag on the economy = auto strikes, government shutdown, student loan payments ... | continued strong labor market

-by Shon Wilk, Nasdaq

1) KEY TAKEAWAYS

1) Equities HIGHER & snapping losing streat / Oil HIGHER + TYields Mixed / US dollar index continues to climb and closing in on the highs of the year

China Mulls Easing Foreign Stake Limits to Lure Global Funds - BBG

UAW strike against automakers continues, no resolution / threatens to expand strike -BBG

DJ -0.0% S&P500 +0.2% Nasdaq +0.5% R2K +0.3% Cdn TSX +0.3%

Stoxx Europe 600 -0.2% APAC stocks HIGHER, 10YR TYield = 4.472%

Dollar HIGHER, Gold $1,925, WTI +1%, $91; Brent +1%, $94, Bitcoin $26,590

NEXT WEEK:

"Inflation trends will be the key focus next week following an action-packed couple of weeks for central banks. The main releases include the US PCE inflation, flash CPIs in Europe, and the Tokyo CPI.

The spotlight will also be on the PMIs from China to gauge momentum in the recent positive economic signals. Notable earnings releases will include Micron, Nike and Costco." -Deutsche Bank

2) Equity volatility has picked up over the last 2 days as bond yields are breaking to new highs...

* source: CNBC

* source: BofA

3) Commodities back in vogue?

* source: Grindstone Intelligence

* source: BofA

4) All eyes on the jobs market - so far has been strong...

* source: BofA

5) US equity fund flows have been schizophrenic

* source: Barclays' Emmanuel Cau

Sentiment is deteriorating...

* source: BofA

6) Busy week ahead!

2) ESG, COMPILED BY NATHAN GREENE

U.S. Judge Denies States’ Bid to Block Biden Rule on E.S.G. - NYT

-Judge Matthew J. Kacsmaryk of U.S. District Court in Amarillo, Texas, said that he would not block the Biden administration rule that allows employee retirement plans to consider ESG issues in investment decisions.

Investors Call for Policy Unleashing $275 Trillion for Net Zero - BNN

-The Net-Zero Asset Owner Alliance, whose members oversee $11 trillion of assets, has called on governments to remove policy barriers to help unleash an estimated $275 trillion in new clean-energy investments over the next three decades. 

-In a report published Thursday, the NZAOA said that governments need to tee up clearer and stronger policies such as reducing financial support for fossil fuels, increasing subsidies and tax breaks for clean energy, passing green-friendly regulation, and introducing new carbon pricing tools.

3) MARKETS, MACRO, CORPORATE NEWS

Global central banks unite in 'higher for longer' credo-RTRS

• Yen tumbles after Bank of Japan maintains ultra-low interest rates-FT
• ECB's Stournaras: rates have likely peaked, next move is a cut-RTRS
• ECB’s Lane says rates will be restrictive as long as necessary-BBG
• Stocks sink most in six months after recent runup in treasury yields-BBG
• BofA says rate worries spark biggest stock outflows this year-BBG
• Treasury buyback plan will boost market resilience, US debt official says-BBG
• Another yield high as US 10-year jumps above key 4.5% level-BBG
• Weak Euro-area PMI data suggest economy facing contraction-BBG
• British retail sales rebound as shoppers return to high streets-FT
• UK consumer confidence climbs to highest in almost two years-BBG
• Japan's Aug inflation stays above BOJ target for 17th month-RTRS
• China mulls easing foreign stake limits to lure global funds-BBG
• China seeks to facilitate capital flows to woo foreign investors-BBG
• Chinese investors rush into local gov't bonds as Beijing eases default fears-FT
• House GOP erupts as McCarthy fails to move Pentagon bill-POL
• Poll: Most Americans say a shutdown would affect them-AXIOS
• Insiders are skeptical about DisneyCEO Bob Iger’s chances to sell ABC-NYP
• Vietnamese internet platform VNG postpones US IPO-BBG
• Samsung may use Qualcomm’snew AP for next Galaxy top model-KEDG
• Canada’s Stelco Holdings is said to weigh bid for US steel-BBG
• China ready for 'package' resolution in trade dispute with Australia-GT
• Phoenix takes stake in Hambro Perks in push to invest pensions-FT
• J&T Globalis seekingHKEX nodfor $500 million IPO soon, sources say-BBG
• Asahichief warns climate change could lead to beer shortages-FT
• Microsoft’s Activision deal set to clear final UK hurdle-BBG
• Amazon’s new challenge: bargain retailers who are playing a different game-HT
• Qualcomm slashes jobs in Chinaand Taiwan amid smartphone slump-NIKKEI
• Everything Microsoft announced at Surface and Copilot event-CNBC
• The Apple-Disney deal that could actually happen-BI
• Apple giving out smaller raises to retail employees post-pandemic-BBG

Oil/Energy Headlines: 1) Russia puts squeeze on oil market with diesel export ban-FT 2) Chevron and unions agree to end Australia LNG strikes-BBG 3) US government ordered to expand Gulf of Mexico oil auction-BBG