MARKET WRAPS

Watch For:

U.S. Existing Home Sales for May.

Opening Call:

Stock futures ticked down Tuesday as investors awaited comments from Federal Reserve Chairman Jerome Powell on the outlook for inflation and the labor market.

Futures tied to the Dow Jones Industrial Average slipped a day after the blue-chip index posted its biggest advance in more than three months. Contracts linked to the S&P 500 index also edged lower, while Nasdaq-100 futures pointed to technology stocks paring back gains at the opening bell.

Stocks have been volatile in recent days as investors looked for clues about how quickly the Fed will move to pull back its support of the economy, and whether the rebound may be stunted. Money managers' concerns about a spike in inflation and the prospect of higher rates have eased, but markets remain on edge.

Mr. Powell plans to tell Congress on Tuesday that job growth should pick up in coming months and temporary inflation pressures should ease as the economy continues to recover from the effects of the pandemic.

He is likely to take questions on the outlook for inflation and the labor market, which may offer fresh insights into the potential pace of interest-rate hikes and the easing of the Fed's bond-buying program.

"The market is in a very fragile, emotional state," said Altaf Kassam, head of investment strategy for State Street Global Advisors in Europe. "It will be a rocky road, it will be bumpy and pronouncements from central bankers are going to get very quick, knee-jerk responses."

Money managers are reconciling themselves to the idea that stimulus measures will be pared back slowly, but not in the immediate future, he added. "There is still plenty of time for markets to get accustomed to [a rate increase]. It really doesn't feel like the beginning of the end just yet."

Existing home sales data, due at 10 a.m. ET, will offer a view into how the American housing market is faring. Economists expect that sales fell in May for the fourth consecutive month as record-high prices put off potential buyers.

Forex:

The dollar may struggle to continue to build on its gains after last week's Fed meeting where policy makers predicted an earlier-than-expected timeframe for raising interest rates, UniCredit said.

Long-term U.S. bond yields "remain low," with the 10-year Treasury yield still "finding it difficult" to breach the 1.50% level, the bank said.

"We warned that if long-term yields continue to face difficulty in moving upwards in the near term, this would dent the post-FOMC USD rally, and this has already been visible in the dollar index (DXY) backpedaling to around the 92 threshold," UniCredit said.

The DXY index was last up 0.1% at 91.9750, having dropped down from a two-month high of 92.4050 reached Friday.

Bonds:

In bond markets, the yield on the 10-year U.S. Treasury note edged up to 1.502%, from 1.481% on Monday. The 30-year yield, which has been particularly volatile in recent days, ticked higher to 2.117% from 2.103% on Monday.

The Fed must walk a tightrope to navigate a successful end to an extremely accommodative stance, with key rates close to 0% and monthly asset purchases of $120 billion, said Olivier de Berranger, chief investment officer of La Financiere de l'Echiquier.

Economic growth is skyrocketing, the employment market is returning to normal and inflation is making a surprise return, he said.

"This therefore seems the ideal time for the Fed to start preparing financial markets for an end to its liquidity injections as the scars of the crisis for the U.S. economy fade," he said.

LFDE sees the Fed's meeting last week as a success despite the anticipation of an earlier start to rate rises by Fed members, de Berranger said.

The Fed's preferred plan and timing for tapering will become clearer in the coming months and Pimco expects an announcement on this could come as soon as the central bank's September meeting, said economists Tiffany Wilding and Allison Boxer.

"When the Fed does taper the monthly pace of purchases, it will likely follow a pre-planned, gradual path that takes roughly two to three quarters," they said.

Commodities:

Oil prices briefly hit their highest level in over two years before edging lower, as investors mulled the outlook for demand.

Brent initially rose above $75 in the Asian session for the first time since late-2018. Analysts said recovering demand should continue to support prices while suppliers keep taps only half-open.

"The ongoing demand outlook continues to outweigh the limited supply response amid cautious increases from OPEC+ and no still no agreement on the Iranian nuclear front," TD Securities said.

Copper prices inched higher as the metal stabilizes after concerns about demand prospects prompted several days of weakness. Three-month copper on the LME is up less than 0.1% at $9,182.50 a metric ton.

While losses appear to have halted, analysts remain concerned about the prospect of tightening monetary policy, slowing demand, and Chinese efforts to tamp down rising commodities prices.

"Underlying fundamentals are pretty much unchanged," said Malcolm Freeman, CEO of brokerage Kingdom Futures.

"There is still the real prospect of interest rate rises and the very fast bounce back from shutdown due to Covid is slowing."

Gold gained in early European trading ahead of Mr. Powell's testimony.

TODAY'S TOP HEADLINES

Resorts World to Open in Las Vegas as Business Rebounds After Covid-19

LAS VEGAS-The first new megacasino on the Strip in more than a decade, the $4.3 billion Resorts World, opens here this week as throngs of mostly maskless tourists indulge in the city's famous casinos once again.

Malaysia's Genting Group developed the 3,500-room hotel with 117,000 square feet of gambling space, 250,000 square feet of meeting space, a 5,000-seat theater where Celine Dion and Katy Perry begin residencies later this year and seven swimming pools overlooking the north end of the Strip. It is one of the biggest resort projects ever on the famed boulevard, similar in scope to the Bellagio or the Venetian.

Read More ->

Sanderson Farms Explores Sale

Poultry giant Sanderson Farms Inc. is exploring a sale, according to people familiar with the matter, as demand for chicken products rises.

Sanderson Farms has tapped Centerview Partners for advice on the potential sale and has attracted interest from suitors including agricultural investment firm Continental Grain Co., which owns a smaller chicken processor, the people said. The process may not result in a sale.

Read More ->

As U.S. Cruises Resume, Operators Outfit Ships With Contact-Tracing Tech

Cruise operators, whose U.S. operations have been suspended for more than a year amid the Covid-19 pandemic, are betting on technology to help keep passengers safe when they finally start leaving U.S. ports this summer.

Royal Caribbean Group, MSC Cruises and Virgin Voyages are among the cruise companies looking to smartphone apps, wearable devices, artificial intelligence and other technologies to keep passengers distanced, which lessens the chance of airborne transmission of the virus, and to provide contact-tracing if anyone does get sick.

Read More ->

Netflix Strikes Deal With Filmmaker Steven Spielberg

The acclaimed filmmaker Steven Spielberg has struck a multiyear deal to make movies for Netflix Inc., a huge get for the streaming giant as it faces increased competition for talent and content from deep-pocketed rivals such as Walt Disney Co. and Amazon.com Inc.

Under the terms of the deal, announced Monday by Netflix and Mr. Spielberg's Amblin Partners, the studio will make multiple new films for Netflix over the course of the agreement. The pact with Netflix doesn't affect Mr. Spielberg's long-term relationship with Comcast Corp.'s Universal Pictures where Amblin Partners is based.

Read More ->

The $213 Billion Meatpacking Industry Faces Stricter Oversight in Washington

The American meatpacking industry faces stricter oversight in Washington, as lawmakers and regulators push an overhaul of the $213 billion sector following complaints about meat companies' alleged influence over markets and farmers.

The U.S. Department of Agriculture is crafting new rules that would change how companies such as Tyson Foods Inc. and Pilgrim's Pride Corp. pay chicken farmers, while making it easier for farmers to pursue disputes against meatpackers, the agency said this month. On Capitol Hill, Republican and Democratic lawmakers have proposed legislation that would require beef processors like Cargill Inc. and JBS USA Holdings Inc. to buy more cattle on open markets, and set minimum regional prices.

Read More ->

Lordstown Motors Executives Sold Stock Ahead of Reporting Results and Before Troubles Came to Light

Several top executives at Lordstown Motors Corp. sold off chunks of stock in the electric-truck startup ahead of reporting financial results, according to regulatory filings disclosing the transactions.

Securities lawyers and accountants say such trades raise questions about the company's internal controls, especially in light of its recent troubles.

Read More ->

Work Flexibility, Popular With Employees, Is Hardly a Holy Grail

Many of today's workers have landed the upper hand when it comes to where and when they work. But no one should get too comfortable.

As demand roars back across the U.S. economy and workers are flush with pandemic savings, the little guy is suddenly wielding more power. Zillow, for example, has said it is allowing most employees to permanently work remotely, betting such a policy will yield the best talent.

Read More ->

Supreme Court Orders More Proceedings in Goldman Sachs Shareholder Suit

WASHINGTON-The Supreme Court on Monday rejected a plea from Goldman Sachs Group Inc. to raise the bar for shareholder lawsuits alleging fraud, but returned a class-action lawsuit against the company to a lower court for further proceedings.

At issue was an investor lawsuit filed in 2011 that alleged Goldman artificially inflated its share price before, during and after the 2007-09 financial crisis. The suit said the firm falsely claimed that it was complying with ethical rules when in fact it was riddled with undisclosed conflicts of interest in its packaging and selling of mortgage-backed securities.

Read More ->

Economy Is Showing Sustained Progress, Powell Says

WASHINGTON-Federal Reserve Chairman Jerome Powell said Monday that job growth should pick up in coming months and temporary inflation pressures should ease as the economy continues to recover from the effects of the pandemic.

"The economy has shown sustained improvement," Mr. Powell said in testimony prepared for delivery Tuesday on Capitol Hill, noting progress on vaccinations and vast stimulus efforts by Congress and the Fed.

Read More ->

Rising Inflation Looks Less Severe Using Pre-Pandemic Comparisons

As consumers deal with starkly higher prices than a year ago, the Federal Reserve has maintained its stance that high inflation, the increase in the price consumers pay for goods and services, isn't expected to last very long.

The Fed tweaked its outlook and now expects to raise interest rates by late 2023-sooner than previously anticipated-noting progress in economic activity and employment.

Read More ->

Wage Gains at Factories Fall Behind Growth in Fast-Food

Pay for factory jobs has grown so slowly in the U.S. that manufacturers are having trouble competing with fast-food restaurants.

Take Western Michigan, home to many office-furniture and car-parts factories as well as a growing tourism industry. Restaurants and hotels along Lake Michigan have been hiring rapidly as people, kept fairly stationary during the pandemic, start traveling again. The shift is making it harder for factories to staff their production lines, and the added demand has increased both openings and the rate at which workers leave their jobs.

Read More ->

Fed's Williams Not Ready to Pare Aid, but Other Officials Talk Tapering

Federal Reserve Bank of New York leader John Williams said he isn't ready for the U.S. central bank to dial back the support it is giving the economy amid uncertainty about the recovery from the pandemic.

"It's clear that the economy is improving at a rapid rate, and the medium-term outlook is very good," Mr. Williams said in a virtual appearance Monday. "But the data and conditions have not progressed enough for the [Federal Open Market Committee] to shift its monetary policy stance of strong support for the economic recovery," he said.

Read More ->

Bitcoin Price Extends Drop After China Intensifies Crypto Crackdown

The price of bitcoin and other cryptocurrencies slid Monday after China's central bank ordered the country's largest banks and payment processors to take a more active role in curbing cryptocurrency trading and related activities.

The People's Bank of China on Monday said it summoned representatives of multiple institutions-including state-owned commercial banks and Ant Group Co.'s Alipay-and told them to "strictly implement" recent notices and guidelines from authorities on curbing risks tied to bitcoin and cryptocurrency fundraising activities. It was the latest sign that Beijing is intensifying its crackdown on unregulated virtual currencies.

Read More ->

SEC Wants More Climate Disclosures. Businesses Are Preparing for a Fight.

WASHINGTON-The Securities and Exchange Commission is preparing to require public companies to disclose more information about how they respond to threats linked to climate change-and businesses are gearing up for a fight.

The SEC's new chairman, Biden administration appointee Gary Gensler, has said climate-related disclosure is a top priority, and President Biden met Monday with Mr. Gensler, Treasury Secretary Janet Yellen, and other top financial regulators to discuss the issue. The SEC has already sought industry input, much of which arrived last week, for a rule proposal that could be issued by October.

Read More ->

The Copper Price Mountain Crumbles

Green energy plus inflation, infrastructure and easy money must equal a copper-price rally-at least that seems to have been the thinking of commodity investors, who had helped copper prices nearly double since late 2019.

Over the past week, that optimism has waned. The Federal Reserve, eyeing stubborn supply-chain and labor-market bottlenecks, has begun sending less dovish signals. And China, eyeing skyrocketing commodity costs, has elected to release part of its state copper reserves into the market. That one-two punch has taken copper prices off about 8% since mid-June.

Read More ->

JPMorgan Invests In Mortgage Clearinghouse

JPMorgan Chase & Co. is redoubling efforts to revive a type of mortgage that largely died out after the last financial crisis.

The bank is reinvesting in an electronic clearinghouse for "private-label" mortgages, which are packaged and sold to investors without a guarantee from a government-backed firm like Fannie Mae. The market has been growing during this year's hot housing market.

Read More ->

New York City Voters Set to Decide Next Mayor

New Yorkers will head to the polls Tuesday to determine the next mayor of New York City and the winners in dozens of other primary races, but many contests might not be called for weeks.

The Democratic mayoral primary features 13 candidates. The winner will likely go on to take the general election in the fall as Democrats outnumber Republicans by roughly 6 to 1 in the city. Two candidates are running in the Republican mayoral primary.

Read More ->

Trump Election Pressure Caused Senior Justice Official to Weigh Resigning

John Demers, head of the Justice Department's national security division, said the sole time in his three-year tenure he considered resigning came when the agency fell under pressure from then-President Donald Trump to pursue baseless claims of election fraud.

In early January, Mr. Trump was threatening to fire the acting attorney general over the sought-after election investigation, and, Mr. Demers recalled Monday, he was trying to figure out who would sign foreign intelligence surveillance requests and conduct other agency business if he resigned in protest along with other leading officials.

Read More ->

Medicaid Enrollment Surged During Covid-19 Pandemic, Report Shows

More than 80 million people-a record number-have health coverage through Medicaid and the Children's Health Insurance Program, as enrollments surged due to Covid-19, according to new data released Monday by the Centers for Medicare and Medicaid Services.

Between February of 2020 and January 2021, nearly 9.9 million people enrolled in the two programs-a 13.9% increase, the data shows. And more than 38.3 million children, or nearly half of the total Medicaid and CHIP enrollment, were in both those programs.

Read More ->

Write to sarka.halas@wsj.com

TODAY IN CANADA

Earnings:

None scheduled

Economic Indicators:

None scheduled

Stocks to Watch:

MindBeacon Holdings Names Dan Clark CEO; Sam Duboc Will Become Executive Chair

Nutrien Raises 1H View To Adj EPS $2.30-Adj EPS $2.50

Parkland Announces B.C. 'Ultra-Fast' EV Charging Network; Network of About 25 Sites Expected to Open in 2022

Telus Prices C$750M of 2.85% Senior Unsecured Sustainability-Linked Notes With 10-Year Maturity; Offering Is Expected to Close Around June 28; Net Proceeds to Be Used for Repayment of Debt, Other General Corporate Purposes

Expected Major Events for Tuesday

05:00/JPN: May Steel Production

05:30/JPN: May Tokyo area department store sales

05:30/JPN: May Nationwide department store sales

06:00/UK: May Public sector finances

06:00/JPN: May Revised Machine Tool Orders

08:00/ITA: Apr Industrial turnover & orders

08:59/JPN: Apr Final Labour Survey - Earnings, Employment & Hours Worked

10:00/UK: Jun CBI Industrial Trends Survey

11:45/US: Weekly Chain Store Sales Index

12:30/US: 1Q State Quarterly Personal Income

12:55/US: 06/19 Johnson Redbook Retail Sales Index

14:00/US: May Existing Home Sales

14:00/US: Jun Richmond Fed Business Activity Survey

17:00/US: May Money Stock Measures

20:30/US: 06/18 API Weekly Statistical Bulletin

23:01/UK: Jun REC JobsOutlook survey

All times in GMT. Powered by Kantar Media and Dow Jones.

Expected Earnings for Tuesday

BQE Water Inc (BQE.V) is expected to report for 1Q.

Cognyte Software Ltd (CGNT) is expected to report for 1Q.

Cyanotech Corp (CYAN) is expected to report for 4Q.

FTI Consulting (FCN) is expected to report $1.60 for 4Q.

Korn Ferry (KFY) is expected to report $0.97 for 4Q.

Plug Power (PLUG) is expected to report $-0.07 for 1Q.

TX Holdings Inc (TXHG) is expected to report for 2Q.

Powered by Kantar Media and Dow Jones.

ANALYST RATINGS ACTIONS

Apache Corp Raised to Outperform From Market Perform by Bernstein

Arcturus Therapeutics Cut to Underweight From Equal-Weight by Barclays

CAI International Cut to Market Perform From Outperform by William Blair

Cimarex Raised to Buy From Neutral by B of A Securities

CNX Resources Cut to Underperform From Neutral by B of A Securities

Devon Energy Raised to Outperform From Market Perform by Bernstein

Eastman Chemical Raised to Sector Outperform From Sector Perform by Scotiabank

Enphase Energy Cut to Equal-Weight From Overweight by Capital One

Kosmos Energy Raised to Outperform From Market Perform by Bernstein

Liberty Oilfield Services Raised to Neutral From Underperform by B of A Securities

Marathon Oil Raised to Neutral From Underperform by B of A Securities

MarineMax Raised to Buy From Neutral by B. Riley Securities

Pioneer Natural Raised to Outperform From Market Perform by Bernstein

Range Resources Cut to Underperform From Neutral by B of A Securities

Sykes Enterprises Cut to Market Perform From Outperform by Barrington Research

Sykes Enterprises Cut to Neutral From Outperform by Baird

Westlake Chemical Raised to Sector Perform From Sector Underperform by Scotiabank

This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

June 22, 2021 06:07 ET (10:07 GMT)

Copyright (c) 2021 Dow Jones & Company, Inc.