Nasdaq Markets Outlook

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

| 1790: an $80 million US Government bond offering to refinance Revolutionary War debt becomes the first publicly traded security in the US

| Inflation was flat in October from the prior month, core CPI lower than expected -CNBC | "is 3 the new 2?" | "Falling gasoline prices, a drop back in shelter inflation and continued declines in core goods prices kept both headline and core inflation on a downward trajectory." -Oxford Economics

* source: CNBC

| As per BofA's Global Fund Manager Survey:

investors remain cautious on macro but turn bullish on interest rates;

investor playbook for 2024 is soft landing, lower rates, weaker US$, large cap tech and pharma bull continues, avoid China and leverage;

investors cut cash from 5.3% to 4.7% (2-year low), move to biggest bond overweight since Mar’09, flip to 1st equity overweight since Apr’22.

* source: Global Fund Manager Survey, BofA's Michael Hartnett

| #UncertainTimes | Since Jan 2022 markets have traveled far but really havent gone anywhere...

| #UncertainTimes #SizeMatters | GRANOLAS outperform in Europe = GlaxoSmithKline, Roche Holding, ASML, Nestlé, Novartis, Novo Nordisk, L'Oréal, LVMH, AstraZeneca, SAP and Sanofi.

* source: Goldman Sachs Global Investment Research

| BofA's Global Fund Manager Survey | RISKS...

Worries about inflation and central banks is rapidly diminishing; in Jul’23 45% said “high inflation keeping central banks hawkish” was the #1 tail risk…now just 25%.

Meanwhile, geopolitical risk has jumped to 31% (vs just 14% in Sep’23).

“Hard landing” risk also creeping up at 23% (vs 13% in Sep’23).

* source: Global Fund Manager Survey, BofA's Michael Hartnett

| #AccountingQualityMatters | "In these backdrops of uncertainty, knowing where the potential risks lie in your portfolio could be the difference between boom or bust. This report covers why we believe you should incorporate earnings quality tools into your process" -Michael Kantrowitz, Piper Sandler

* source: Piper Sandler, Michael Kantrowitz

| MoM allocation changes by investors... rotated into bonds, tech, telecom, and REIT / out of materials, industrials, banks, commodities, and UK equities.

* source: Global Fund Manager Survey, BofA's Michael Hartnett

|US default rates are rising...Europe not so much...

* source: Barclays' Emmanuel Cau

| A rapid rate hike cycle...the era of easy money is over?

* source: Goldman Sachs Global Investment Research

| "The rise in corporate bond yields has been driven by government yields, not credit risk"

* source: Barclays' Emmanuel Cau

| Historic high mortgage rates... -Oxford Economics

* source: Oxford Economics

| "Valuations provide little upside"

* source: Goldman Sachs Global Investment Research

| Investor positioning...

Bullish: healthcare, tech, Japan, bonds, cash, US.
Bearish: UK, utilities, Eurozone, materials.

* source: Global Fund Manager Survey, BofA's Michael Hartnett

| October: "small businesses are still recovering, and owners are not optimistic about better business conditions. Small business owners are not growing their inventories as labor and energy costs are not falling, making it a gloomy outlook for the remainder of the year.”

* source: NFIB

1) KEY TAKEAWAYS

1) Equities + Oil HIGHER | Dollar + TYields LOWER

THEMES: CPI cooler than expected/Core CPI slowest increase in two years = markets rallying | Yields backing off | S&P 500 above key technical levels | VIX lower

-by Shon Wilk

DJ +1.1% S&P500 +1.6% Nasdaq +2.0% R2K +3.8% Cdn TSX +1.7%

Stoxx Europe 600 +1.2% APAC stocks HIGHER, 10YR TYield = 4.463%

Dollar LOWER, Gold $1,967, WTI +1%, $79; Brent +1%, $84, Bitcoin $36,602

2) Nasdaq Investor Flows by Bill Bailey

institutional investors remain reluctant to participate broadly in this rally but buying Tech

Retail investors were taking risk off the table . Interestingly, largely taking the other side of the tech trade from the long-only community

Hedge Funds / Fast Money continue to be buyers of equities: concentrated activity in the Industrials and Energy sectors while selling in the Technology sector

Continue to see healthy index flows/buying across the board

* source: Nasdaq Investor Flows

3) Q3 Earnings | "results have been generally stronger than expected"

The 458 companies that have so far reported show earnings growth of 2.8% from a year earlier on revenue gains of 1.6%. At this point, eight of the 11 sectors of the S&P 500 are showing positive earnings growth, with three (consumer discretionary, communication services and financials) rising at double-digit rates.

* source: Oppenheimer Asset Management, John Stoltzfus

4) THIS WEEK:

US = CPI + retail sales reports .

UK = inflation and labour market indicators.
growth data in Japan and China.

"Apart from economic data, a potential US government shutdown and US-China relations at the APEC economic leaders' week will be in focus. Notable corporate
earnings include Walmart, Cisco and Alibaba." -Deutsche Bank

* source: Barclays' Emmanuel Cau

2) ESG, COMPILED BY NATHAN GREENE

Banks Put Forward for Exclusion From EU’s Toughest ESG Rules Yet - BNN

-Spain, which holds the European Union’s rotating presidency, has proposed that financial firms be excluded from the initial roll-out of the Corporate Sustainability Due Diligence Directive, according to a Nov. 9 draft proposal seen by Bloomberg. The proposal still requires the approval of member states and lawmakers.

ESG round-up: Old Mutual and Ninety One to vote against Sasol decarbonization plans -RI

Old Mutual Investment Managers and Ninety One have predeclared their plans to vote against Sasol's decarbonization pathway, due to the energy giant's poor performance on climate targets.

3) MARKETS, MACRO, CORPORATE NEWS

• Investors dump cash to chase bonds, BofA survey shows-BBG
• US inflation report to keep Fed leaning toward more rate hikes-BBG
• Yellen says she disagrees with Moody’s negative outlook on US-BBG
• China economy likely struggled for traction despite stimulus-BBG
• Euro zone Q3 GDP shrinks-RTRS
• German investor expectations improve again-BBG
• Australian consumer sentiment slumps following RBA’S rate hike-BBG
• UK labor market holds up better than expected after rate hikes-BBG
• BOJ looks to corp profits, household incomes to boost wages, prices-RTRS
• ECB to hold rates through mid-2024 despite stalling economy-RTRS
• Bank of England to cut interest rates as soon as May, economists predict-TELE
• China Oct new bank loans fall less than expected, policy easing on track-RTRS
• China orders local governments cut exposure to public-private projects-RTRS
• China's chipmaking equipment imports surge 93% despite curbs-NIKKEI
• Vanke bonds volatility underscores China property debt contagion-BBG
• GOP’s Johnson turns to Democrats to pass plan to avert shutdown-BBG
• US kicks off fiscal year with an 87% surge in interest costs-BBG
• Biden, Xi to announce China’s crackdown on fentanyl trade-BBG
• US military talks with China are priority at Biden-Xi summit-BBG
• Hamas has ‘lost control of Gaza,’ says Israeli defense minister-TOI
• Biden urges ‘less intrusive action’ as troops close in on Gaza Hospital-BBG
• The ‘Axis of Resistance’ pushing US to ramp up Middle East defences-FT
• EU weighs extending steel-trade truce with us to avoid tariffs-BBG
• ESPN takes aim at US sports betting market-FT
• Stellantis offers buyouts to roughly half of U.S. salaried workers-CNBC
• Teck Resources nears deal to sell coal business to Glencore – WSJ-RTRS
• Amazon reaches deal to run shopping ads on Snap-INFO
• Cash register closed: Till Payments changes hands for meagre sum-AFR
• Once valued at $500m, Till Payments is teetering on the brink-AFR
• Emirates not ordering with Airbus until A350 engine fixed-BBG
• Mercedes-Benz Truck CEO says order backlog remains very high-BBG
• Airbus set for first widebody deal at Dubai Show with EgyptAir-BBG
• Nvidia unveils H200, its newest high-end chip for training AI models-CNBC
• Hyundai joins Toyota, Honda hiking US wages following UAW strike-BBG
• Automakers' drive avoid China's EV rare earth dominance gathers speed-RTRS
• EV demand in Europe to slow as customers await affordable electric cars-RTRS
• Tesla's Cybertruck contract restricts reselling vehicle within the first year-MOR
• Bain eyes Varsity Brands cash-out at $6 billion-plus valuation -sources-RTRS

Oil/Energy Headlines: 1)  IEA raises oil demand growth forecasts despite economic gloom-RTRS 2) US plans to buy 1.2 million barrels of oil for Strategic Petroleum Reserve-RTRS 3) US shale oil output expected to fall in December -EIA-RTRS 4) China independent refineries see govt raising fuel oil import quota: sources-PLATTS5) Russia oil-export revenues drop on sanctions, cheaper crude-BBG 6) Kremlin, on U.S. probe into oil sanctions, says Russia acting in own interests-RTRS 7) Output from Kazakhstan's Tengiz oilfield to remain stable in 2024-energy ministry-RTRS 8) Iran’s proxies in Syria move toward Escalation with Israel-FP