Nasdaq Markets Outlook

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

US 10YR TYield broke above closing high from last October after the Fed minutes. ~3-bps away from the October INTRADAY high. Rate expectations are getting revisited ("higher for longer" to slay inflation).

* source: CNBC

"markets are taking the prospect of another hike from the Fed increasingly seriously...it’s clear that investors are adjusting to the fact that rates could remain at a higher level for some time." -Deutsche Bank

* source: CNBC

"Federal Funds Target rate = highest level in more than 20 years."

Balance Sheet trimming yet to begin

"But even monetary policy officials aren't sure what the 'right' level for their balance sheet is, and it's possible they won't know until they've gone too far once again." -GI

* source: Grindstone Intelligence

1) KEY TAKEAWAYS

1) Equities mostly HIGHER + TYields HIGHER as 10YR continues to climb | yield curve continues to steepen | Weekly Retail Sentiment (AAII): Bullish fell sharply, bearish + neutral rose.

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

Stoxx Europe 600 -0.5% APAC stocks LOWER, 10YR TYield = 4.282%

Dollar LOWER, Gold $1,901, WTI +1%, $80; Brent +1%, $84, Bitcoin $28,439

YIELD BACK-UP/"higher for longer" to slay inflation

• Fed saw ‘significant’ inflation risk that may merit more hikes-BBG
• Global yields March to 15-year highs as rate-hike worries build-BBG

CHINA ECONOMIC/MARKET CONCERNS

Xi Jinping speech calling for patience released amid economic gloom-SCMP

• Turmoil at Zhongzhi sparks alarm over China’s $3tn shadow finance sector-FT
• China's state banks seen selling dollars for yuan in London and NY hours-RTRS
• Global investors dump Chinese securities as state support hopes fade-FT
• China’s housing slump is much worse than official data shows-BBG
• Worst defaults in months fuel stress in China’s credit market-BBG

2) Fed minutes (hawkish bias): uncertain about impact of monetary tightening. Clear about inflation being too high - committed to returning to 2% inflation target.

* source: Oxford Economics

3) Markets have travelled far the last 1.5 years but have not gotten far...recent rally in question with rising yields

* source: Yardeni Research

4) More work left to bring inflation to 2% target

* source: Grindstone Intelligence

5) Jobless claims fall, job market remains tight

* source: Oxford Economics

6) The Hot & Cold Economy: Industrial production jumped 1% in July, nearly recouping the losses sustained in May and June. Manufacturing rose a buoyant 0.5%, mainly on a surge in motor vehicle production.

* source: Oxford Economics

7) BofA Global Fund Manager Survey: Cash levels across institutional investors fall...lowest since Nov 21

* source: BofA Global Fund Manager Survey

8) The Week Ahead | retail sales + FOMC minutes = highlights

* source: Grindstone Intelligence

2) ESG, COMPILED BY NATHAN GREENE

OFF TODAY

3) MARKETS, MACRO, CORPORATE NEWS

ECB’s Kazaks says any additional rate hikes would be very small-BBG

• Norway central bank raises rate to 4.0%, eyes September hike-RTRS
• RBNZ’s Orr says recession is bare minimum to tame inflation-BBG
• Goldman Sachs blames zero-day options for fueling S&P 500 selloff-BBG
• Americans have almost depleted excess savings, SF Fed study says-BBG
• Japan exports shrink first time in more than two years-BBG
• China is headwind for US, global economy, treasury official says-BBG
• Australia unemployment rises to 3.7% as rate hikes take toll-BBG
• Americans back tariffs, military prep against China -Reuters/Ipsos poll-RTRS
• US, Japan and South Korea to deepen security ties to deter China-FT
• Paramount drops plans to sell BET Media stake – WSJ-FT
• NYTimes considers legal action against OpenAI as copyright tensions swirl-NPR
• Nubank’s Billionaire CEO Velez sells $191 million stake in firm-BBG
• Payments group Adyen defends hiring spree as shares tumble 20%-FT
• Tyson Foods plans to sell China poultry business-RTRS
• Hawaiian Electric in talks with financial restructuring firms – WSJ-RTRS
• SMIC defers REIT listing-BW
• Cisco touts market share wins, AI potential, revenue forecast disappoints-RTRS

Oil/Energy Headlines: 1) US and Iran rely on shadow diplomacy where open deals would fail-BBG 2 Lawmakers urge Biden to resolve offloading delay of seized Iran oil tanker-RTRS 3) Iraq Northern Oil Output partly resumes even as exports halted-BBG 4) China makes rare draw on crude oil inventories as imports slip-RTRS 5) Norway oil companies to boost investments, survey shows-RTRS