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

#marketseverywhere | “The advantage of a free market is that it allows millions of decision-makers to respond individually to freely determined prices.” -FA Hayek, 1974 Nobel Prize Economics

| Global small-cap stocks lure bargain hunters after sluggish 2023-RTRS

| Japan to end ultra easy money policy? Yen leaps to three-month high as traders bet on BoJ rate rise -FT

| Equity market valuations have expanded without any improvement in earnings as yields have fallen in anticipation of rate cuts in 2024…

Aggregate > Equal Weight due to the Magnificent 7 (mega caps)

| And what kind of a tantrum will the markets throw if the Fed doesn’t cut rates especially in an environment where economic growth is anemic…?

* source: Goldman Sachs Global Investment Research

* source: Barclays’ Emmanuel Cau

| Q4 earnings not showing signs of improving… and neither is 2024…

* source: Factset Insight

| Food for thought…

*source: Chartr

| We need #EconomicGrowth (read tax cuts plus deregulation) to reinvigorate the economy!

* source: Factset Insight, Christine Short

* source: JPM AM

| Poor market breadth | “Only 24% of stocks in the S&P 500 trade within 10% of their alltime highs (vs. 28% historical average), much lower vs. prior bull market peaks.” -BofA’s Savita

* source: BofA’s Savita

| a lot of indicators are pointing to at least a slowing economy…

* source: Barclays’ Emmanuel Cau

| A lot of indicators are pointing to at least a slowing economy…

“The 2s10s yield curve has become more inverted again and now stands around -46bps. December marks the 18th month of a continuous 2s10s inversion” – Deutsche Bank, Jim Reid

* source: Deutsche Bank, Jim Reid

| U.S. economic surprise index heading lower…economic data’s positive surprise shrinking…

* source: Yardeni Research

| Labor costs declining while productivity rising making the Fed’s job easier…

* source: Oxford Economics

| Productivity gains which come from capital formation (as a result of economic growth) due to voluntary exchange raises our standard of living!

* source: Oxford Economics

| Nov/Dec seasonality = positive

* source: Barclays’ Emmanuel Cau

1) KEY TAKEAWAYS

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

big week for jobs data…

DJ +0.0% S&P500 0.5% Nasdaq 0.9% R2K 0.0% Cdn TSX 0.3%

Stoxx Europe 600 -0.3% APAC stocks LOWER, 10YR TYield = 4.148%

Dollar LOWER, Gold $2,030, WTI +1%, $70; Brent 1%, $75, Bitcoin $43,397

2) Jobless claims noisy but signaling a cooling labor market

“Initial jobless claims were little changed in the week ended December 2, while continued claims reversed some – but not all – of the prior week’s spike and continue to trend higher.” -Oxford Economics

* source: Oxford Economics

2) THIS WEEK:

“The U.S. jobs report on Friday will be the highlight of the week, with the University of Michigan data also in focus.

Other notable releases include economic activity indicators in Germany, wages in Japan, and trade in China.

From central banks, there will be the ECB’s consumer expectations survey and the BoE’s inflation attitudes survey. Monetary policy decisions are also due from the central banks of Canada and Australia.”

-Deutsche Bank

* source: Barclays’ Emmanuel Cau

2) ESG, COMPILED BY NATHAN GREENE

U.S. Solar Set for Record-Breaking Year as Incentives Kick In – BNN

-U.S. solar installations are on track to reach a record 33 gigawatts in capacity this year, driven by clean-energy incentives that are expected to sustain deployments for the coming years.

-The gains come despite headwinds from regulatory bottlenecks, rising financing costs and shortages of some key components. The industry is working through these challenges, and solar accounted for 48% of all new generation added in the first three quarters of this year.

ESG Fund Flows & Performance – Barclays’ Emmanuel Cau 

ESG performance in Q3 improves

Cumulative ESG fund flows remain positive, but below prior years

* source: Barclays’ Emmanuel Cau

3) MARKETS, MACRO, CORPORATE NEWS

BOJ lays groundwork for end of Japan’s negative rates-NIKKEI
BOJ chief meets premier Kishida, explains focus on wages, demand-RTRS
Fed’s repo backstop gets most use since 2020-BBG
ECB may consider rate cuts in 2024, not now, Villeroy says-BBG
BoE to stay on hold through Q2 2024 despite cooling inflation-RTRS
Beaten-down stocks get some revenge after big tech’s 2023 rally-BBG
November’s stock rally embarrassed strategists but vindicated analysts-BBG
Market bets for 2024 thrown into chaos by US recession conundrum-RTRS
China’s exports slump seen slowing as pockets of demand emerge: –RTRS
Euro-zone risks recession as German economy falters-BBG
Germany’s budget crisis: No clear way forward coalition miss deadline-POL
France, Germany divided as time running out for EU fiscal revamp-BBG
Moody’s cuts Hong Kong, Macau bank rating outlooks fol. China move-RTRS
Chinese carmakers rush to build own semiconductor supply chains-NIKKEI
Senate GOP blocks Biden’s $100B foreign aid plan-POL
Humanitarian system in Gaza on verge of collapse, says UN chief-FT
China’s Xi Jinping meets EU leaders for hiBgh stakes talks-FT
Italy tells China it will exit belt and road investment pact-BBG
Options traders are setting their sights on Bitcoin at $50,000 by January-BBG
Bitcoin’s rally burns $6 billion for short sellers-BBG
Jamie Dimon lashes out against crypto-CNBC
AbbVie nears roughly $8 billion deal for drug developer Cerevel-sources-RTRS
Meta to start fully encrypting messages on Facebook and Messenger-RTRS
Exclusive: Hedge fund Palliser urges changes at Samsung C&T -sources-RTRS
Bain Capital last bidder in race for SoftwareOne – sources-RTRS
4DMedical readies $30m-plus raising to fund offshore acquisition-AFR
Woodside and Santos exploring merger-AFR
Elon Musk’s SpaceX valued at $175 billion or more in tender offer-BBG
Sanofi chief says he could have done a better job outlining R&D plan-FT
AMD CEO debuts Nvidia chip rival, gives eye-popping forecast-BBG
Citi soars as revenue target remains even after trading slump-BBG
Google opens access to Gemini, racing to catch up to OpenAI-BBG
EU nears deal to regulate ChatGPT, AI tech as talks drag on-BBG
McDonald’s aims to open nearly 9,000 restaurants, add 100 million loyalty members by 2027-CNBC

Oil/Energy Headlines: 1) OPEC oil output drops in November, in first fall since July -survey-RTRS 2) US crude stockpiles fall, fuel builds as refining ramps up – EIA-RTRS 3) China crude oil imports post first year-on-year decline since April-RTRS 4) China’s soft crude oil imports show impact of high prices-RTRS 5) China oil demand seen peaking by 2030 -CNPC research-RTRS 6) Russia and Saudi Arabia urge all OPEC-plus countries to join output deal-RTRS 7)Saudi Q3 GDP shrinks 4.4% y/y, in line with earlier estimates-RTRS 8) Russian diesel and gasoline boost helps its fuel exports rebound-BBG 9) Indian state refiners may sharpen competition for Venezuelan oil-BBG10) Tumbling oil prices push Russian crude below g-7’s $60 price cap-BBG 11) Red Sea shipping attacks raise tanker insurance costs as security risks escalate-PLATTS

Original: Earnings Feed: Jobless Claims Noisy but Signaling a Cooling Labor Market