Nasdaq Markets Outlook

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

#marketseverywhere |

"box of Girl Scout cookies price up from $5 to $6 this season; can't blame them given restart of US student loan payments, end of subsidized childcare, home & auto loan costs at 20-year highs (30-year mortgage rate at 8%) and TV streaming services raising prices." 

-Michael Hartnett, The Flow Show, BofA

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| Powell Says Fed ‘Proceeding Carefully,’ Leaves Door Open to Hike | Jerome Powell Signals Fed Will Extend Interest-Rate Pause - WSJ 

*POWELL:

evidence is that policy is not 'too tight' right now
right now the risk is still high inflation
fed has to let rise in yields play out, watch it

* source: Yardeni Research

| rate hike odds collapse

* source: CME FedWatch, produced by Gavin Zaentz

| BofA's Indicator hitting Extreme Bearish territory...

* source: BofA

| "Amid high macro volatility, early Q3 results have failed to lift the mood in equities. EPS beats are running above average, but stock price reaction has been tilted to the downside, with misses punished." -Barclays, Emmanuel Cau

* source: Barclays' Emmanuel Cau

| "They're back. We refer to the global investors once known as the bond vigilantes, who demanded higher Treasury bond yields from the late 1970s through the 1990s whenever inflation fears popped up, and as a result disciplined U.S. policy makers." 

-The Wall Street Journal Editorial Board, May 2009

* source: Yardeni Research

| #QualityMatters 

-Piper Sandler's Michael Kantrowitz

* source: Piper Sandler

1) KEY TAKEAWAYS

1) Equities + TYields + Dollar LOWER / Oil HIGHER 

| Powell remarks = well balanced | equities = volatility + irregular volumes today? = largest volume of October expirations on record | Bitcoin = to post biggest weekly gain in about four months 

| Next week:

-global flash PMIs on Tuesday will be among the key highlights.

-preliminary US Q3 GDP report + personal income and spending data.

-ECB decision on Thursday

-corporate earnings: focus on Big Tech firms + major oil + healthcare companies.

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

Stoxx Europe 600 -0.9% APAC stocks LOWER, 10YR TYield = 4.926%

Dollar LOWER, Gold $1,978, WTI +1%, $90; Brent +1%, $93, Bitcoin $29,598

| THEMES: yields marching higher | stubborn moderate inflation a risk (CPI +PPI >expected) | where is oil going with geopolitical risks building? | Fedspeak turning dovish | Rising Federal Deficit | Optimism around upcoming Q3 earnings season | Q3 Bank earnings better than expected – will this earnings season be better than expected?

-by Shon Wilk, Nasdaq

2) Leading-index declines still point to downturn | "much of the weakness is concentrated in sentiment-based data, giving reason to believe the deteriorating signal may be overstated" -Oxford Economics

* source: Oxford Economics

3) Notable flows:

"Money market funds outflows of $109bn this week, reversed most of the inflows seen since September. In the Fixed income space, US treasuries continue to see strong inflows"

-Barclays' Emmanuel Cau

* source: Barclays' Emmanuel Cau

* source: BofA

2) ESG, COMPILED BY NATHAN GREENE

Top Issuer in $250 Billion ESG Bond Market Faces Trigger Event -YahooF 

-Enel SpA, which has close to $11 billion in SLBs that may be affected, is “highly unlikely” to meet an end of 2023 carbon-emissions goal after changes to European energy policy resulted in the delayed phaseout of coal plants, according to the Anthropocene Fixed Income Institute. The development would release an estimated $27 million of additional annual interest costs for the Italian energy company, AFII said.

South Korea’s $733 Billion Fund Says It Overstated Sustainable Assets -BNN 

-South Korea’s $733 billion national pension fund admitted it’s been overstating the amount of money it invests in socially responsible assets, adding pressure on the world’s third-largest fund to improve its record on sustainability. 

-The National Pension Service was called out by lawmaker Han Jeoung-ae, who said the fund assumes that all outsourced investments are socially responsible as long as the external asset managers adopt stewardship codes and guidelines, regardless of whether the investments are actually in socially responsible companies.

3) MARKETS, MACRO, CORPORATE NEWS

• Red October rumbles on as U.S. bond yields reach 5%-RTRS
• BofA sees near-term stock rally as signal flashes contrarian buy-BBG
• Even strong earnings might not be able to save stocks-YAHOO
• Mega-Cap China tech bears brunt of deepening foreigner exodus-BBG
• China property market shows little signs of revival despite stimulus-RTRS
• German producer prices post biggest decline on record in September-RTRS
• UK retail sales fall more than expected in spell of warm weather-BBG
• Japan's core inflation slows below 3% for first time in over a year-RTRS
• Federal Reserve chair pledges to move carefully on rates-FT
• Fed’s Logan says higher yields allow more time to watch economy-BBG
• ECB’s peak rates to endure despite economic perils, survey shows-BBG
• China offers record cash infusion to keep rates low for growth-BBG
• ECB hiking campaign is over but no easing until at least July-RTRS
• BOE governor signals UK’s inflation fight has further to run-BBG
• Biden urges U.S. to remain ‘beacon to the world’ in aiding allies at war-NYT
• Biden’s influence turns Israel's ground war plans ‘something different’-BBG
• US warship shoots down missiles fired by Iranian-backed rebels-FT
• China imposes export curbs on graphite-FT
• China continues nuclear buildup with 500 warheads, US says-BBG
• US and EU stall on steel accord, risking a return of tariffs-BBG
• Republicans reject expanding interim speaker power-WASHPO
• Trump winning over swing-state voters wary of Biden’s economic plan-BBG 

• Jazz Pharmaceuticals is said to explore options including sale-BBG
• Portugal to define sizeTAP stake for sale once proposals submitted–RTRS
• Bank of Baroda suspends executives as part of customer app probe-BBG
• Hitachi set to win EU okay for $1.8 bln Thales deal, sources say-RTRS
• CVC backers plan to sell shares in over $1 billion IPO, sources say-RTRS
• Beauty group Puig says potential IPO would bring ‘discipline’-FT 

• Oil/Energy Headlines: 1) US Syria base attacked as destroyer stops missiles from Yemen-BBG 2) US seeks to buy 6 million barrels for oil reserve by January-RTRS3) US seeks well-supplied oil market, political stability as Middle East tensions rise-PLATTS 4) US Gulf Coast oil patch gets lucky, so far, in busy hurricane season-RTRS 5) Russia makes up 40% of Indian oil imports, dents OPEC's share-RTRS 6) India pushes back against Russia demands to pay for oil in yuan-BBG 7) China's teapot refiners battle rising costs of imports from Russia, Venezuela-RTRS