Nasdaq Markets Outlook

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

"It is increasingly hard for equities to compete with bonds and cash." -Barclays' Emmanuel Cau

"broad tone was skewed towards risk-off across multiple asset classes." -Deutsche Bank, Jim Reid

* source: CNBC

| "despite less bearishness reported in surveys, holdings data of hedge funds and long-only funds still indicate deeply conservative biases" -BofA's Savita

* source: BofA's Savita

| Sentiment moderating...

* source: Barclays' Emmanuel Cau

| "Within the R2K, stocks with high interest coverage are outperforming stocks with low interest coverage by 40% over the last year! ... part of the reason why large caps continue to outperform small caps in general." -Michael Kantrowitz, Piper Sandler

* source: Piper Sandler, Michael Kantrowitz

| Disconnect between TYields + Nasdaq 100, will they converge and if so, how?

* source: Factset, produced by Gavin Zaentz

| Peak US economic surprise coinciding with peak rates...

* source: Barclays' Emmanuel Cau

1) KEY TAKEAWAYS

1) Equities MIXED (lower on the week) + TYields LOWER

| geopolitical scrutiny on some tech names + yield back-up + energy prices rising + peak disinflation? + UAW strike

| Next week: US CPI (Wed) + PPI (Thurs) + UMich consumer expectation survey (Fri) + ECB decision (Thurs) + labour market / GDP data in the UK. G20 summit kicks off this Saturday.

DJ +0.0% S&P500 +0.2% Nasdaq +0.4% R2K -0.3% Cdn TSX -0.3%

Stoxx Europe 600 +0.1% APAC stocks LOWER, 10YR TYield = 4.230%

Dollar LOWER, Gold $1,922, WTI -0%, $87; Brent +0%, $90, Bitcoin $25,893

NOTABLE HEADLINES

• Federal Reserve officials back rate rise pause in September-FT
• ECB to pause hiking rates on Sept 14; economists split on one more-RTRS
• China's widening iPhone curbs roil US technology sector-RTRS
• Apple’s China troubles catch fund managers chasing rally-BBG
• Apple stock hit by China worries ahead of iPhone 15 launch-FT
• FAO Food Price Index declines in August-FAO

2) uncertainty on direction of economy 

A) "Sell the last hike...higher-for-longer yields = rising probability of hard landing" -BofA's Michael Hartnett

B) Meanwhile Goldman Sachs reduced recession odds to 15% for next 12 months

C) Deutsche Bank sees odds greater than 80%

D) latest Beige Book covering July + August = "economy may be losing some momentum but not on the verge of sliding into a recession."

* source: Goldman Sachs Global Investment Research

* source: Deutsche Bank

* source: Oxford Economics

3) Oil at 10 month high...

* source: Yardeni Research

4) labor market still generally positive/tight

| "While signs of looser labor markets are emerging, the low level of initial jobless claims is a reminder that any cooling in labor market conditions is being accompanied by few layoffs." -Oxford Economics

* source: Oxford Economics

5) “Everything points to narrower margins and lower profits, at least for the next year – the Global slowdown, rising rates, righter credit, still-tight labor, weak productivity" -Nancy Lazar, Piper Sandler

2) ESG, COMPILED BY NATHAN GREENE

Amundi increases sustainable investments levels on 46 ETFs - FT

-Amundi is increasing the minimum proportion of sustainable investments on 46 of its exchange traded funds following some clarifications of EU sustainability disclosure rules. The biggest increases will see the percentage of sustainable investments in some ETFs go from 1% to 35% and from 10% to 40%.

Bank Watchdogs Told to Ratchet Up Oversight of ESG Risks - BNN

-According to the Network for Greening the Financial System, regulators need to step up oversight of banks’ environmental footprints as loss of natural capital exacerbates the impact of climate change.

-Financial firms face increased risks — including from litigation — as human activity pushes the planet closer to environmental tipping points. The number of climate lawsuits rose to 2,341 as of May from 190 a year earlier, according to the Grantham Research Institute on Climate Change and the Environment.

3) MARKETS, MACRO, CORPORATE NEWS

• US probes Made-in-China chip as alarm over Huawei grows-BBG
• Janet Yellen says China has ‘policy space’ to boost its economy-FT
• Japan real wages fall for 16th straight month in July-RTRS
• Default dodged, Country Garden's upcoming debt payments stir worries-RTRS
• China's major banks to lower rates on existing first-home mortgages-RTRS
• Goldman Sachs plans new job cull for bankers deemed underperformers-FT
• China expands iPhone ban to local governments, state-owned firms-Nikkei
• Zoom talked with regulators about Microsoft competition concerns-BBG
• Telstra leans into IT services; prepares binding offer for Versent-AFR
• KKR deal makers fasten seat belts for Queensland Airports Ltd-AFR
• Woolies’ $500m media cash cow at risk in privacy crackdown-AFR
• Arm sees sales growth of more than 20% next year boosted by AI-BBG
• Goldman Sachs CEO Solomon: Wall Street rebound if tech IPOs perform-CNBC

Oil/Energy Headlines: 1) Strikes start at major Chevron Australia LNG projects, no talks planned-RTRS 2) OPEC+ output rises 120,000 b/d in August despite Saudi, Russia restraint: Platts survey-Platts 3) Saudi Arabia set to increase crude supplies to China in 2024-Platts 4) Owner of ship seized carrying Iranian oil pleads guilty in US court-FT 5) Canadian Natural expects Trans Mountain expansion project to be delayed-RTRS 6) Saudi push for $100 oil brings new headache for Biden administration-FT