Nasdaq Markets Outlook

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

#marketseverywhere | markets in wait and see mode ahead of a busy macro + earnings week | earnings: GOOGL + MSFT today after the close; AAPL, AMZN, and META on Feb 1 | macro: consumer confidence, FOMC, ISM Manufacturing, employment data

| falling Treasury yields | "an adrenaline shot came through in the last hour of US trading [yesterday] as the US Treasury announced lower-than-expected borrowing estimates for Q1 and Q2 2024."

| falling Eurozone yields | "there was a significant sovereign bond rally in Europe as investors priced in a growing likelihood the ECB would be cutting rates shortly."

-Deutsche Bank, Jim Reid

* source: Yardeni Research

1) KEY TAKEAWAYS

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

-recent broadening of market rally - will it continue?

-corporate buyback window reopening

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

Stoxx Europe 600 +0.2% APAC stocks LOWER, 10YR TYield = 4.051%

Dollar LOWER, Gold $2,045, WTI +0%, $77; Brent -0%, $82, Bitcoin $43,269

2) "the Technology sector is the only sector where estimates for 2024 have increased in recent months. Outside of these stocks, the earnings and margins data have been quite mixed, if not outright weak."

-Michael Kantrowitz, Piper Sandler

* source: Piper Sandler

3) "At this stage of the fourth quarter earnings season, the overall performance of the S&P 500 continues to be subpar. The percentage of S&P 500 companies reporting positive earnings surprises is below average, while companies are reporting actual earnings that are below estimates in aggregate. Most of this below-average performance relative to estimates is due to companies in the Financials sector." -Factset Insight

* source: Factset Insight

4) if the job market and the economy does not show signs of deterioration, is there a need to cut rates? | The Fed is congressionally mandated to solve for price stability + maximum employment

* source: Piper Sandler

5) S&P500 broke above a resistance and hitting new all time highs...

still some room left for Nasdaq Index to hit all time highs

rally driven by large caps...

* source: Yardeni Research

6) THIS WEEK:

US: Fed's policy decision Wednesday | Friday, US jobs report for January.

Europe: BoE meeting | CPI and GDP reports across the Eurozone.

Earnings: Apple, Amazon, Microsoft and Meta.

* source: Barclays' Emmanuel Cau

2) ESG, COMPILED BY NATHAN GREENE

BP Is Wrong to Set Oil-Output Reduction Target, Activist Investor Bluebell Says - BNN

-According to activist investor Bluebell Capital Partners, BP’s planned reduction in oil and gas output is wrong for shareholders and the company should abandon the target.

-BP’s strategy is still to move into clean energy, but amid that shift it will continue to invest in oil and gas. Of the $14 billion to $18 billion BP will invest each year to 2030, more than half will go into oil and gas, he said. 
 

EU needs trillions of investment for 2050 climate target - research - Reuters

-The European Commission is set to recommend next week that the EU cuts net emissions 90% by 2040, from 1990 levels, and outline the huge upfront increase in investments needed to get Europe on track to have zero net emissions by 2050.

-Most of the funding needed for net zero - 1.16 trillion euros per year - could be secured by redirecting existing spending, much of it on polluting activities, according to the research by the Institut Rousseau think-tank.

3) MARKETS, MACRO, CORPORATE NEWS

• Treasury cuts quarterly borrowing estimate to $760 billion-BBG
• US corporate bond sales hit $188 billion in record January-BBG
• US economic expansion likely hinges on a nimble Fed this time-RTRS
• Bond investors gear up for looming Fed interest rate cuts-RTRS
• China’s 10-year yield falls to two-decade low on rate cut hopes-BBG
• Global crypto assets report $500 million in weekly outflows-BBG
• Higher Spanish inflation kicks euro zone bond yields off two-week lows-RTRS
• Euro Zone unexpectedly escapes recession but struggles persist-BBG
• How AI could help curb global labor shortages-AXIOS
• China markets show pressure is growing for Beijing to do more-BBG
• Inflation in UK shops drops to lowest in more than a year-BBG
• New Zealand has way to go get inflation 2%, RBNZ Chief Economist says-BBG
• Middle East situation ‘incredibly volatile’ after deadly attack, Blinken warns-FT
• US seeks just-tough-enough response to deadly Mideast attack-BBG
• Israel military sees it taking all of 2024 to eliminate Hamas threat, longer-BBG
• US ‘not looking for a war with Iran’ after deadly attack, White House says-FT
• Hungary vows to defy EU ‘blackmail’ over Ukraine funding-FT
• US unlikely to return all Venezuela sanctions after ruling-BBG
• House Republicans rage as leaders back bipartisan tax deal-AXIOS

• Disney Star mulls legal action against ZEEL for backing out $1.4 billion deal-BL
• Boeing withdraws bid for safety exemption for Boeing 737 MAX 7-RTRS
• VW places battery unit IPO on backburner-BNN
• Thai Air Force eyes $538 million budget to buy new fighter jets-BBG
• PC maker Raspberry PI picks banks IPO, choosing London over New York-BBG
• ANZ tipped to target $1b-plus for new hybrids deal-AFR
• Propel funeral partners in $90 million equity raise-AFR
• Sumitomo Chemical to cut LCD polarizer output by 30% amid overhaul-NIKKEI
• Activist clearway buys stake in Italy tv tower firm RAI Way-BBG
• Chart shows why Big Tech earnings are critical for the health market rally-YF
• Alphabet, Meta ad sales in Q4 unlikely to reflect gen AI investments-RTRS
• Bank mergers face tougher, slower process under OCC proposal-BBG
• Amazon scraps $1.45bn iRobot purchase over EU’s threat to block deal-FT
• Evergrande liquidation to test Hong Kong’s legal reach in mainland China-FT

Oil/Energy Headlines: 1) OPEC+ exports indicate slow start to new oil cuts, Kpler says-BBG 2) Russia eases harsh weather restrictions to boost oil exports-RTRS 3) Russia’s seaborne crude exports are battered by winter storms-BBG 4) Funds slash bearish positions in US crude as stocks drain-RTRS 5) US to resume oil, gas sanctions in April if Venezuela does not OK all presidential candidates-PLATTS 6) Canadian oil weakens on delay to trans mountain expansion-BBG 7) India's move to expand oil ties with Guyana reflects diversification push-PLATTS