Inflation Data and Fed Meeting on Tap This Week
A mostly graphical daily curated roundup of the markets and the economy from Nasdaq’s IR team.
#marketseverywhere |
S&P 500 at a YTD high of +20% | STOXX 600 (Eurozone) at 22 month high
“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
1) KEY TAKEAWAYS
1) Equities + TYields MIXED / Gold + Dollar + Oil 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 -0.0% S&P500 -0.1% Nasdaq +0.1% R2K -0.5% Cdn TSX -0.7%
Stoxx Europe 600 -0.4% APAC stocks HIGHER, 10YR TYield = 4.235%
Dollar LOWER, Gold $1,982, WTI -3%, $69; Brent -3%, $74, Bitcoin $41,407
* source: Goldman Sachs Global Investment Research
2) Stubborn inflation…touch higher than expected | Consumer prices rose 0.1% in November from the prior month | more work needed to bring it to 2%
* source: CNBC
* source: BofA
Falling inflation, not growth driving optimism | “German ZEW (Investor Expectations index) Optimism Driven By Cooling Inflation, NOT Growth.”
* source: Piper Sandler
3) Small Biz: job vacancies falling | wage growth strengthens | inflationary pressure rises | facing tough credit conditions…
* source: Oxford Economics
4) Share buyback announcements may be falling but share buyback activity is robust…
* source: BofA
5) Market and Surveys all point to rate cuts ahead as economy expected to weaken + political pressure to reduce rates in election year
* source: CNBC
* source: Oxford Economics
* source: CNBC
6) Global central banks are heading towards monetary easing mode…
* source: BofA
7) “Investors Shouldn’t Concentrate On Sectors Because They Are Too Concentrated!”
* source: Piper Sandler
* source: JPM AM
8) Elevated valuation dispersion…
* source: Goldman Sachs Global Investment Research
9) “Discretionary stocks are breaking out to new 18-month highs vs. the Staples. Risk = on.”
RETAIL SENTIMENT
“the number of bearish survey responses to the AAII US Investor Sentiment Survey dropped to the lowest level since 2017. And the rate at which bulls outnumber the bears is in rarified territory. Greed is the dominant force in today’s market.”
* source: Grindstone Intelligence
* source: John Stoltzfus Oppenheimer Asset Management
10) Risk ON: “If investors were seeking safe havens within the bond market, we’d expect them to be piling into Treasurys and high quality, investment grade corporates. Instead, high yield bonds are outperforming.”
“Corporate credit spreads (the difference between interest rates on corporate bond issues and Treasurys) just fell to their lowest level in nearly 2 years.”
* source: Oxford Economics
11) “Wages are high and the pool of workers is small”
* source: BofA
12) Performance:
* source: Goldman Sachs Global Investment Research
13) Passive fund flows > Active fund flows…
* source: Goldman Sachs Global Investment Research
14) Politics…
* source: Piper Sandler
15) THIS WEEK:
US: CPI, small business optimism, Fed rate decision are key highlights
* source: Barclays’ Emmanuel Cau
2) Nasdaq Investor Flows by Bill Bailey
heavy sector rotation across long-only, institutional investors | buying the technology sector which coincided with a strong tech-heavy Nasdaq Composite rally | net buyers of Healthcare while selling most other sectors
We continue to see heavy inflows into index products as this market continues to trade higher
Retail investors are taking risk off of individual stocks in recent trading | It appears at least some of these flows may have went into index products which is a common theme we observe
* source: Nasdaq
3) ESG, COMPILED BY NATHAN GREENE
Big Oil’s bid to woo ESG investors fails to impress – RTRS
-The pledge by 50 of the biggest oil and gas companies at the U.N. climate talks in Dubai commits to reaching near-zero methane emissions by 2030 as well as net-zero carbon emissions in their energy use and production by 2050.
-Those Scope 1 and 2 emissions from the companies’ own operations account for about 15% of the total associated with the companies. The pledge does not address Scope 3 emissions caused by the use of the fuels the companies produce that account for 85%.
COP28: UN climate talks in jeopardy in fossil fuel backlash – BBC
-The UN climate talks in Dubai could be in jeopardy after some nations reacted furiously to a draft deal on fossil fuels they call “weak”.
-The draft removed language included in a previous text suggesting that fossil fuels could be “phased out”.
4) MARKETS, MACRO, CORPORATE NEWS
INFRONEER Holdings to acquire Japan Wind Development for ¥200B-Nikkei
KKR hires bankers after approaches for its song rights catalogue-FT
Epic win: Jury decides Google has illegal monopoly in app store fight-V
Ford cutting 2024 F-150 Lightning production plans by half, suppliers told-AN
Anson wants Globalstar to monetize spectrum assets-BBG
US senators target fertilizer industry after meat crackdown-BBG
Netflix to squeak past Disney+ in US advertising revenue in 2024-RTRS
KKR nears deal for Cotiviti valuing firm at $11 billion-BBG
JIC-led group is frontrunner for Shinko Electric Stake, sources say-BBG
RIL, Disney ready term sheet to merge India operations-ET
Oil/Energy Headlines: 1) Houthis hit fuel tanker with missile in vital trade artery –BBG 2) Oil prices could crash 50% if OPEC+ lets output rise and doesn’t extend cuts through 2024, Citi commodities research chief says –Y 3) COP28 heads for overtime as countries wrangle over fossil fuels –RTRS 4) Hedge funds dismiss OPEC+ action to support oil prices –RTRS 5) M&A deals in Permian basin exceeds $100 billion in 2023 – WoodMac –RTRS 6) India bought Russian oil at $84.2/bbl in October, highest since December –RTRS 7) Guyana says oil producers are moving ahead despite Venezuela’s threats –BBG 8) COP28: China supports ‘substituting’ fossil fuels with renewables, criticizes trade protectionism –Platts
Original: Earnings Feed: Inflation Data and Fed Meeting on Tap This Week