Nasdaq Markets Outlook

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

| "Fundamentally, in a system in which the knowledge of the relevant facts is dispersed among many people, prices can act to coordinate the separate actions of different people in the same way as subjective values help the individual to coordinate the parts of his plan.” -FA Hayek, 1974 Nobel Prize Economics

| "This week’s FOMC meeting will be critical, with its revised dot plot set to clarify if market sentiment remains more dovish than actual Fed communications." -JP Morgan Asset Management

| Broad sustainable improvement in earnings expectations needed for a meaningful rally? | "Over the last month we have seen another bounce in the risk trade which we do not expect to last." -Piper Sandler

1) KEY TAKEAWAYS

1) Equities MIXED / Dollar & TYields & Oil HIGHER / Gold LOWER

Inflation Data (CPI+PPI) and Fed Meeting on tap this week | ECB +BOE on Thursday | Overbought conditions in focus = is buying exhausted? | Treasury demand concerns continue | multiple indices rebalancing + triple witching on Friday | M&A market picking up

DJ 0.2% S&P500 0.0% Nasdaq -0.1% R2K -0.1% Cdn TSX -0.4%

Stoxx Europe 600 0.1% APAC stocks LOWER, 10YR TYield = 4.266%

Dollar HIGHER, Gold $1,988, WTI -0%, $71; Brent 0%, $76, Bitcoin $41,9494

2) #RollerCoasterMarkets | Markets have traveled far but really haven't gone anywhere

* source: John Stoltzfus Oppenheimer Asset Management

"we continue to see investors chase ups and downs of the risk trade...

the risk trade has been a roller coaster ride with fits and starts"

A sustainable and broad based improvement in earnings expectations

is needed for a sustained rally...

* source: Piper Sandler

3) TYields continue to fall as markets expect rate cuts in 2024 on weaker economy + election year (political pressure?) cynically boosting sentiment...

* source: John Stoltzfus Oppenheimer Asset Management

4) "The gap between the mega cap names and the rest of the market has been widening for the better part of 2023. This bifurcation in performance has pushed stock correlations lower. The average 60-day correlation between stocks and the market is currently under 50%. This unusually low level shows just how much the headline indices today are being driven by a few mega cap names and do not
represent all the stocks in the index."

* source: Piper Sandler

2023 = Large Cap Growth > Large Cap Value

* source: John Stoltzfus Oppenheimer Asset Management

6) Slowing inflation (disinflation) boosting consumer sentiment | "The rise in University of Michigan's consumer sentiment index was better than even our above-consensus forecast and reflects a widespread improvement amid falling inflation and the rebound in the stock market"

* source: Oxford Economics

7) Last week:

Small Caps outperformed while Energy underperformed by a wide margin...

* source: Factset, produced by Gavin Zaentz

* source: Piper Sandler

8) Job market softening but no concerns (yet) - all eyes on job markets in 2024...

* source: JPMorgan Asset Management

* source: Deutsche Bank

still seeing job gains and unemployment rate is low...

* source: John Stoltzfus Oppenheimer Asset Management

labor force participation rate is below pre-pandemic levels...

* source: Deutsche Bank

9) "ISM surveys show conditions consistent with slow but steady conditions in business sentiment."

* source: John Stoltzfus Oppenheimer Asset Management

10) Gold & Oil LOWER last week

* source: John Stoltzfus Oppenheimer Asset Management

11) Politics...

* source: Piper Sandler

* source: Barclays' Emmanuel Cau

2) ESG, COMPILED BY NATHAN GREENE

ECB’s Stournaras Urges Focus on Climate Change’s Economic Impact - BNN

-The ECB “is exploring setting limits on the share of assets issued by entities with a high carbon footprint that banks can pledge as collateral for monetary policy actions.”

-The central bank is also expected to introduce climate change data disclosure as a new eligibility criterion for collateral in monetary policy operations, he added.

Argentina will stay in Paris climate agreement under Milei: Negotiator - RTRS

Argentina under incoming President Javier Milei will remain part of the Paris Agreement on climate change, the country's new top climate diplomat told Reuters on Sunday, despite the leader's past comments that global warming is a hoax.

3) MARKETS, MACRO, CORPORATE NEWS

• Central banks prepare to rebuff investors over pathofinterest rates-FT
• Bank of England lags behind peers in battle to curb inflation, investors warn-FT
• UK economists say Bank of England may warn against rate cut bets-BBG
• Goldman sees BOE rate cuts coming from August at ‘quicker pace’-BBG
• BOJ to see little need to end negative rate in December, sources say-BBG
• Shrinking economy in Japan casts doubt on BoJ rate raise bets-FT
• Japan PM pledges to restore trust fundraising scandal engulfs gov't-RTRS
• A record high is in the cards for US stocks in 2024-BBG
• Morgan Stanley’s Wilson sees big drop in near-term profit views-BBG
• Xi Jinping warns China’s economic recovery at ‘critical stage’-FT
• China car sales growth speeds up in November as price war intensifies-RTRS
• China's consumer prices fall fastest3 yrs, factory-gate deflation deepens-RTRS
• Euro area to suffer first recession since pandemic, survey shows-BBG
• German coalition leaders to resume budget talks on Sunday -sources-RTRS
• UK housing market gloom returns after unexpected price rises-BBG
• PM Kishida mulls replacing all ministers from Abe faction: sources-KYO
• Fighting intensifies Gaza, raising alarm over potential exodus Egypt-RTRS
• Nearly half of US voters think Joe Biden spending too much on Ukraine aid-FT
• Zelenskiy to meet Biden, US lawmakers in bid to unlock aid-BBG

• Owners of O2 Arena and Hammersmith Apollo enter race for See Tickets-FT
• Macy's investors mount $5.8 billion buyout bid-RTRS
• Boeing to name Stephanie Pope as chief operating officer – WSJ-RTRS
• Cura Day Hospitals auction in rude health; binding offers due-AFR
• Why Azim Premji is displeased with the state of Wipro-MINT
• Rate cut pivot can’t come soon enough for debt-strapped companies-BBG
• EU negotiators strike political deal on AI Act-POL

Oil/Energy Headlines: 1) Chinese refiner demand for Jan Saudi crude at 5-mth low -sources-RTRS 2) China allows independent refineries to use 2024 crude import quotas in Dec-PLATTS 3) Venezuela, Guyana leaders to meet over border spat, Celac says-BBG 4) Yemen's Houthis warn they will target all ships headed to Israel-RTRS 5) US seeks to buy up to 3 million barrels of oil for Strategic Petroleum Reserve-RTRS