Nasdaq Markets Outlook

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

#marketseverywhere | "The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design." -FA Hayek 

| ECB raises its key interest rates +25bps, key deposit rate to 4.00%

"the most aggressive rolling 15-month hiking cycle in observable history if we combine the Bundesbank (1949-1998) with the ECB (1999-)." -Deutsche Bank, Jim Reid 

* source: Deutsche Bank, Jim Reid

| spot real base rates have only just reached levels that before the last three years were the most accommodative in history...policy is still very easy...monetary policy is clearly working for the economy as European growth has broadly stagnated since last autumn...is it working quickly enough to secure the ECB's inflation mandate going forward 

* source: Deutsche Bank, Jim Reid

1) KEY TAKEAWAYS

1) Equities + Oil HIGHER / TYields MIXED |  Weekly AAII Sentiment (Retail): Bullish + bearish sentiment fell, neutral jumped

| August wholesale inflation (PPI) +0.7%, hotter than expected

* source: CNBC

| THEMES: geopolitical scrutiny on some tech names + yield back-up + energy prices rising + peak disinflation? + UAW strike + hedging costs climb + market breadth poor

DJ +0.4% S&P500 +0.4% Nasdaq +0.4% R2K +1.2% Cdn TSX +0.8% 

Stoxx Europe 600 +1.0% APAC stocks HIGHER, 10YR TYield = 4.243% 

Dollar HIGHER, Gold $1,905, WTI +1%, $90; Brent +1%, $93, Bitcoin $26,634 

NOTABLE HEADLINES 

• BOE turning gloomier on UK outlook brings rate pause into view-BBG
• Fed on alert for one more hike after ‘disappointing’ inflation-BBG
• SoftBank-backed arm raises $4.87 billion in biggest 2023 IPO-BBG 

2)  oil + yields rising = adding pressure to stocks + valuation | peak disinflation = mild persistent inflation + sticky rates

* source: CNBC

3) "The solid increase in headline retail sales in August was not as good as it appeared as it was driven by a price-related surge in gasoline station sales while underlying goods and services spending lost momentum" -Oxford Economics

* source: Oxford Economics 

4) Breakdown of yesterday's CPI | Energy prices + Airline Fares elevated | bad news: is inflation sticky? 

* source: Piper Sandler

5)  Odds of a rate hike in November still stuck at roughly 40% | then rate cuts in 2024...? 

* source: Nasdaq Economic Research 

6) tight job market | "Initial jobless claims were little changed last week, a reminder that, while there is some evidence that labor market conditions are loosening, the job market is still characterized by very few layoffs." -Oxford Economics

* source: Oxford Economics 

7) Slowing China | "China growth to remain weaker for longer under our base case. We see demographics as one of the biggest structural issues facing the Chinese economy." -Barclays, Emmanuel Cau

* source: Barclays' Emmanuel Cau 

8) This 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.

* source: Grindstone Intelligence 

9) Investors = conservative bias | sentiment moderating | equity inflows have stalled | "Less than half of S&P 500 stocks are in uptrends, whether you look at 20, 50, 100, or 200-day average prices" -Grindstone Intelligence

* source: Grindstone Intelligence 

2) ESG, COMPILED BY NATHAN GREENE

EU Opens Door to Revamping Its Landmark ESG Investing Rules - BNN

-In a public consultation launched on Thursday, the European Commission will seek to find out how the Sustainable Finance Disclosure Regulation is working in practice, including costs to the financial market. The Commission will also ask market participants whether they think SFDR is succeeding in channeling capital toward sustainable activities.

Suriname aims to be first to sell Paris Agreement carbon credits, adviser says - Reuters

-The South American forest nation of Suriname plans to become the first country to sell carbon credits under a system set up by the 2015 U.N. Paris Agreement to help curb climate change.

-The prospective sale is a bid to attract investors with government-backed carbon credits that follow U.N. guidelines, as companies grow wary of buying from private initiatives in the voluntary carbon market after studies found several projects failed to deliver promised climate contributions. 

3) MARKETS, MACRO, CORPORATE NEWS 

• ECB weighs lifting rates to record higheven as economy slows-RTRS
• ECB’s razor-edge decisionrests on price outlook-BBG
• Japan'sweak machinery orders, batch of soft data raise BOJ challenge-RTRS
• Australia’sjob gains show economy absorbing RBA rate hikes-BBG
• China’s data to show economyis trying to move past the worst-BBG
• Fed economistssound alarm on hedge funds gaming US Treasuries-RTRS
• Battered yenputs onus on Central Bank comments to turn a corner-BBG
• China asks big banks to stagger and adjust dollar purchases – sources-RTRS
• Elon Musk calls for federal department of AIafter Capitol Hill summit-CNBC
• GOP hardliners stall military funding, raising government shutdown risk-BBG
• Chinese stocks lead foreign exodusfrom emerging markets in August-RTRS
• China accuses EU of ‘naked protectionism’in fight for EV market-BBG
• Apollois among suitors for IGT’S global slot-machine unit-BBG
• Caesars Entertainment paid millions to hackersin attack-BBG
• BP begins search for new CEO with no clear front-runner-RTRS
• Ciplafounding family’s stake sale in jeopardy -BBG
• Wilko’s demise, FTSE chair merry-go-round, Bink’s breakup w/ Barclays-CITYAM
• Estes Express submits revised $1.525 bln bidYellow's shipment centers-RTRS
• A.W. Prepares forLimited Strike Against Detroit Automakers on Friday-NYT
• Oil/Energy Headlines: 1) Australian LNG workers escalate strikes at Chevron plants-BBG2) Fault at strike-hit Chevron Australia plant shuts 25% of output-RTRS3) US inflation rises in August as petrol prices jump-FT 4) US contacts oil producers, refiners as gasoline prices rise-RTRS 5) China's 'teapot' refiners mop up swelling Iranian crude, defying U.S. curbs-RTRS