Is the Rally Fading? | Nasdaq
A mostly graphical daily curated roundup of the markets and the economy from Nasdaq’s IR team.
| MSCI quarterly review as of close Nov. 30, 2023. Expect elevated volumes/volatility particularly at the open and close leading up to and on the rebalancing date
* source: CNBC
| US financial conditions are easing… | no more rate hikes but markets pricing in rate cuts in 2024
* source: Goldman Sachs Global Investment Research
* source: CNBC
* source: Grindstone Intelligence
* source: CNBC
* source: Grindstone Intelligence
| digital gold aka bitcoin = “Another beneficiary of Dollar weakness” | 120% rally through the first 11 months of 2023
* source: Grindstone Intelligence
| Buybacks to fall and capex to rise? | debt is also more expensive now (less incentive for financial engineering)
* source: BofA’s Savita
| With the era of money easy most likely over (had fueled growth for over a decade), how will tech or the Magnificent 7 behave?
* source: BofA, Michael Hartnett
* source: JP Morgan Asset Management
* source: Piper Sandler
| will value make a comeback in the ear of normalized monetary policy?
* source: Yardeni Research
| “asset allocators are mostly underweight equities relative to history”
* source: BofA’s Savita
| Will service inflation fall?
* source: BofA, Michael Gapen
| all eyes on the US consumer…
* source: CNBC
| The secular shift from actively-managed to passively-managed funds has accelerated meaningfully in 2023
* source: Goldman Sachs Global Investment Research
1) KEY TAKEAWAYS
1) Equities + Dollar LOWER / Oil HIGHER / TYields MIXED
Powell speaking on Friday…
Themes: Elevated cash remains on the sidelines ($5.7 trillion parked in cash-like money-market funds ) | Volatility (VIX) continues to fall | has rally peaked after short covering in recent week? = major averages hitting resistance levels | Signs point to the beginning of consumer weakness | Investors are getting back in the market – Invesco’s QQQ ETF, which tracks the tech-heavy Nasdaq-100 Index, reported its largest weekly inflow in history the week of Nov. 13. | Small-cap stocks have trailed Large caps this year by a historic margin | Upcoming catalysts: November employment data on 8-Dec, CPI on 12-Dec, and the FOMC decision (and updated dot plot) on 13-Dec.
-By Shon Wilk
DJ -0.0% S&P500 -0.2% Nasdaq -0.1% R2K -0.5% Cdn TSX -0.3%
Stoxx Europe 600 -0.6% APAC stocks LOWER, 10YR TYield = 4.408%
Dollar LOWER, Gold $2,027, WTI +1%, $76; Brent +1%, $81, Bitcoin $37,429
2) “We have a NEGATIVE consumer credit cycle unfolding at the same time banks are still aggressively tightening lending standards.”
* source: Piper Sandler
3) Economic surprise index is falling…
* source: Goldman Sachs Global Investment Research
3) THIS WEEK:
“US growth dynamics will be in focus next week with releases including personal
income and spending data as well as the ISM manufacturing index.
In Europe, all eyes will be on the preliminary CPI reports for November. There will also be economic activity indicators in Japan and the PMIs in China.
Central bank speakers include Fed Chair Powell, ECB President Lagarde and BoE
Governor Bailey.
Notable corporate earnings include Dell and Salesforce”
.-Deutsche Bank
* source: Barclays’ Emmanuel Cau
2) ESG, COMPILED BY NATHAN GREENE
OFF THIS WEEK
3) MARKETS, MACRO, CORPORATE NEWS
Outlier trade bets on 250 basis points of US rate cuts in 2024-BBG
After 2023 miss, Wall Street caves to rally few predicted-BBG
Sharp US stock rally is running out of steam, Citi strategists say-BBG
Global central bankers warn of uncertainty amid rate debate-BBG
ECB to discuss earlier end to bond purchases, says Christine Lagarde-FT
BoE leads central bank chorus on need for restrictive policy-RTRS
China pushes banks to set private-sector lending targets-NIKKEI
China’s central bank boosts liquidity to rein in short-term rates-NIKKEI
Cyber Monday online shopping spree forecast to break record-FT
US gasoline prices fall for 60 straight days in win for US holiday spending-BBG
Japan’s price trend gauge hits record, heightens case for BOJ exit-RTRS
German consumer sentiment barely improves heading holiday season-RTRS
Euro zone corporate lending contracts as economy shrinks: ECB data-RTRS
Milei heads to DC for debt talks after meeting Clinton for lunch-BBG
Israel-Hamas truce extended by 2 days as more hostages released-FT
US warns Israel on southern Gaza offensive-FT
Aboitiz Power, Meralco to hike RE investments starting 2024-MANSTAN
Cathay favouring Airbus for widely watched freighter deal – sources-RTRS
First Quantum says it hopes to avoid Panama arbitration over mine-RTRS
Barclays explores plan to drop thousands of investment banking clients-FT
Clean-energy sell-off is ‘very wrong’, warns US power group boss-FT
Sony-Zee merger risks collapse ahead of deadline over CEO drama-BBG
Taiwan Cement expected to take control of Turkey’s Oyak Cement-BBG
Oil/Energy Headlines: 1) OPEC to meet on Thursday ahead of OPEC+ talks, says source-RTRS 2) Russia’s crude shipments rebound ahead of delayed OPEC+ meeting-BBG 3) Venezuela may allow opposition appeals to advance as US deadline approaches-RTRS 4) OPEC head accuses IEA of vilifying fossil fuel industry-RTRS 5) Nigeria revises 2024 budget to $33 billion, raises oil price assumption-RTRS