MARKET WRAPS

Watch For:

U.S. Durable Goods for August.

Opening Call:

Stock futures rose, and oil hit its highest level in nearly three years, as fears about China Evergrande Group 's debt problems waned and investors bet on further economic reopening from the pandemic.

Stocks swung last week as fears about Evergrande's debt problems weighed on markets. Despite the Chinese property developer missing a bond coupon payment, the S&P 500 still finished the week up 0.5%.

Federal Reserve Chairman Jerome Powell helped boost confidence when he said the U.S. economy has recovered sufficiently for the central bank to potentially announce the start of bond-purchase tapering at its next meeting.

"People have had time to think over the weekend and have decided that this is another occasion to buy the dip," said Sebastien Galy, a macro strategist at Nordea Asset Management, referring to the practice of buying after stocks fall. "The high levels of liquidity in the market changes our view of the world and how fast we fade the fear."

In Asia, major benchmarks were mixed Monday. The Shanghai Composite Index slipped 0.8%, while Hong Kong's Hang Seng Index edged up 0.1%. Evergrande shares rallied 8%, but remained down more than 80% for the year. China Evergrande New Energy Vehicle Group, a subsidiary of the Evergrande parent company, scrapped plans to list on the Shanghai Stock Exchange.

The DAX, Germany's benchmark stock index, rose 1% in the best intraday performance among Western European indexes. Germans voted for a new chancellor over the weekend. The initial results showed a tight race that will likely mean lengthy coalition talks and no major changes to policy, according to Peter Schaffrik, a global macro strategist at RBC Capital Markets.

"For markets this means continuity. At the end of the day, it will remain a centrist government in all cases," Mr. Schaffrik said. "Germany's fiscal stance will remain within the boundaries of what the market will find easily acceptable."

The pan-continental Stoxx Europe 600 advanced 0.7%, with stocks that benefit from the loosening of pandemic restrictions leading the index higher.

At 8:30 a.m. ET Monday, fresh data on new U.S. orders for durable goods in August is set to be released. Economists are expecting an increase, as business investment and consumer spending was strong.

Forex:

Bitcoin recovered after falling in reaction to Friday's news that China will ban all cryptocurrency transactions and mining. Bitcoin rose 5.6% to $43,858, having fallen as low as $41,120 on Friday, according to CoinDesk.

"The impact of the latest Chinese news on Bitcoin's price was significant but not dramatic as the $40K support held well during the kneejerk drop and during the weekend," Swissquote Bank analyst Ipek Ozkardeskaya said.

"But Bitcoin is still in the bearish consolidation zone and should make a move above the $44/45K mark to step back to the positive trend, otherwise we may see the price of a coin fluctuating between $40K and $45K range without too much excitement for traders."

The U.K.'s supply constraints could send the pound lower even though the market has recently priced in more interest rate rises by the Bank of England for next year, MUFG Bank said.

The seriousness of supply side bottlenecks was underlined by the U.K. government's decision to offer temporary visas to fuel tanker and food truck drivers, and to poultry workers, MUFG currency analyst Lee Hardman said.

"The latest developments are creating a more negative combination of weaker growth and higher inflation in the U.K. which we believe is a bad mix for pound performance." GBP/USD could weaken, especially if it falls below the 1.3600 support level, he said.

Bonds:

The yield on the 10-year benchmark U.S. Treasury note ticked down to 1.447% Monday, from 1.459% Friday, capping a four-day rise that drove the biggest weekly increase since March.

Investors are likely to continue to sell U.S. Treasurys and U.K. government bonds, pushing their yields higher, as they price in the possibility of higher interest rates, said Mizuho.

"The move higher in yields should continue in U.S. Treasurys and more forcefully in GBP rates," analysts at the Japanese bank said.

The Bank of England's surprise comments last week that the latest developments had strengthened the case for modest tightening makes foreign selling of gilts more likely, they said.

Commodities:

Oil prices rose thanks in part to broader concerns over the tightness in energy markets, with oil demand expected to get an additional boost from gas to oil switching over the course of this winter, according to DNB Markets' Helge Andre Martinsen.

Those gains also come after Goldman Sachs on Sunday increased its year-end Brent forecast by $10 to $90 a barrel.

"The current global oil supply-demand deficit is larger than we expected, with the recovery in global demand from the Delta impact even faster than our above consensus forecast and with global supply remaining short of our below consensus forecasts," Goldman Sachs's Damien Courvalin said.

Gold prices traded sideways as investors shun the metal in favor of other assets. Investors continued to wind down their gold positions last week as the precious metal's lackluster price performance made other assets more appealing, Commerzbank said.

Gold exchange-traded funds tracked by FactSet saw a net outflow of $464 million last week. Speculative investors also slashed their exposure to gold futures, according to CFTC data. Money managers cut their net long positions in gold futures by 24,000 lots in the week to 21 September. That is equivalent to selling 76 metric tons of gold in one week, noted Commerzbank.

Copper prices edged lower as the dollar rises and investors weigh risks from central bank tightening and the Evergrande saga. Three-month copper on the LME edged down 0.4% to $9,317 a metric ton.

Other base metals also begin the week on the ropes. Aluminum fell 1.2% to $9,316.50 a ton while nickel fell 1.6% to $18,900 a ton.

"Deleveraging and regulatory pressures will continue to see tailwinds morph to headwinds in the coming months," TD Securities said in a note.

The Fed is likely to begin tapering next month, "[suggesting] that macro forces will increasingly point to the downside as the path of least resistance in the coming months," the bank said.

TODAY'S TOP HEADLINES

Google Pushes to Overturn EU's $5 Billion Antitrust Decision on Android

BRUSSELS-Alphabet Inc.'s Google begun its appeal Monday to overturn a $5 billion antitrust fine imposed by the European Union, contending that its Android operating system for mobile devices has boosted competition rather than foreclosing it.

The tech giant presented oral arguments in Luxembourg before the EU's second-highest court, in its appeal to overturn the 2018 decision from the bloc's antitrust enforcer. In that case, EU authorities found Google had illegally abused the market power of Android to push companies that manufacture and distribute Android phones into agreements aimed at entrenching and expanding the dominance of the Google search engine on mobile devices.

Read More ->

Gores Guggenheim SPAC Nears Deal to Combine With Polestar

Polestar is nearing a deal to go public through a merger with a special-purpose acquisition company that would value the Swedish electric-vehicle maker at $21 billion, according to people familiar with the matter.

Polestar, owned by Chinese car maker Zhejiang Geely Holding Group Co., is in advanced talks with Gores Guggenheim Inc. and could reach a deal by Monday, the people said, assuming talks don't fall apart.

Read More ->

China Evergrande New Energy Vehicle Scraps Shanghai Listing Plans

Cash-strapped China Evergrande New Energy Vehicle Group Ltd. has shelved plans to list on the Shanghai Stock Exchange, as the debt crisis at its parent, China Evergrande Group, weighs on market confidence.

The proposed issue of A-Shares "will not proceed further," the company said late Sunday without elaborating.

Read More ->

China Wields New Legal Weapon to Fight Claims of Intellectual Property Theft

WASHINGTON-Chinese technology giants have seized on a new legal tactic to fight claims of intellectual property theft, raising concerns in the U.S. that Beijing's promises to strictly enforce patent and copyright laws will be undermined by Chinese courts.

In four major cases since 2020, Chinese courts granted so-called anti-suit injunctions blocking foreign companies from taking legal action anywhere in the world to protect their trade secrets.

Read More ->

China's Cnooc Plans Big Share Sale at Home as U.S. Delisting Looms

One of China's big state-owned oil companies, Cnooc Ltd., plans to raise more than $5 billion from a domestic share sale as it faces a possible delisting of its U.S. securities.

The planned issuance-like a recent megadeal by China Telecom Corp.-shows that China's corporate champions are able to access large pools of capital back home if needed, blunting the impact of being exiled from American markets.

Read More ->

Commodity Boom Is Too Much of a Good Thing for Many Traders

It has been a banner year for fossil-fuel, metals and agricultural markets. For many commodity traders, the boom in prices has had an unexpected effect: a credit crunch that is reshaping the industry in favor of the largest players.

Higher prices are requiring traders to borrow more money to finance the same volume of oil, copper or coffee. In some instances, extreme or unusual weather is causing gyrations in commodity prices, prompting traders to amass cash in a pinch.

Read More ->

After Early Investors Flee SPAC Deals, Day Traders Rush In

Day traders are targeting some companies that recently closed SPAC mergers, reinvigorating some of the meme-stock excitement that helped make such deals popular early in the year.

The latest special-purpose-acquisition-company excitement focuses on firms like cybersecurity firm IronNet Inc. that suffered significant investor withdrawals ahead of going public by closing SPAC mergers. High withdrawals leave the companies going public with less cash to put into their businesses and can make it harder for them to meet the growth projections they made as part of the deals with so-called blank-check companies.

Read More ->

Economy Week Ahead: Consumer Spending, Inflation, Manufacturing

The Commerce Department's monthly report on U.S. consumer spending highlights this week's economic data.

Read More ->

Cargo Piles Up as California Ports Jostle Over How to Resolve Delays

Nike Inc. doesn't have enough sneakers to sell for the holidays. Costco Wholesale Corp. is reimposing limits on paper towel purchases. Prices for artificial Christmas trees have jumped 25% this season.

Despite mounting shipping delays and cargo backlogs, the busiest U.S. port complex shuts its gates for hours on most days and remains closed on Sundays. Meanwhile, major ports in Asia and Europe have operated round-the-clock for years.

Read More ->

In a Troubled U.S.-China Relationship, Moments of Pragmatism Emerge

Behind-the-scenes dealings that freed a Chinese executive from U.S. prosecution removed a stumbling block between the nations and demonstrated a little-noticed pragmatic dimension to the relationship.

The U.S. and China are at loggerheads on numerous fronts, from technology and human rights to Beijing's territorial claims; the United Nations secretary-general this month termed the nations' relationship as "completely dysfunctional."

Read More ->

Debt-Limit Standoff Could Force Fed to Revisit Emergency Playbook

A crisis-management playbook Federal Reserve officials created years ago could guide their response this fall if the federal government can't pay all its bills because of a political standoff over raising the federal debt limit.

The options include the Fed buying Treasury securities in default on the open market and selling Treasurys owned by the Fed to counteract potentially severe strains in financial markets, according to the transcript of an October 2013 conference call.

Read More ->

Logistics Operators Raise Pay, Enlist Robots to Meet Holiday Demand

Warehouse operators are throwing every tool they can at increasingly urgent efforts to hire seasonal workers as they brace for an expected flood of holiday goods amid competition for scarce labor from deep-pocketed rivals.

Logistics providers are boosting pay, adding flexibility to shifts, blanketing social media with recruitment ads and even shipping in more robots to help workers field surging e-commerce volumes. They are also jockeying with titans like Amazon.com Inc., Walmart Inc. and United Parcel Service Inc. that are dangling inducements, from signing bonuses to assistance with college tuition, as they push to bring on hundreds of thousands of workers ahead of the holidays.

Read More ->

Bitcoin Miners Eye Nuclear Power as Environmental Criticism Mounts

Bitcoin miners, under fire for their sizable environmental footprint, are forging partnerships with owners of struggling nuclear-power plants with electricity to spare.

The matchups have the potential to solve key issues facing each industry, executives and analysts say: Electricity-hungry bitcoin miners want stable and carbon-free power, while nuclear plants facing competition from cheaper power sources need new customers.

Read More ->

Center-Left Wins Narrow Victory in German Elections

BERLIN-Germany faces weeks and perhaps months of uncertainty as Sunday's narrow victory for the center-left in national elections left open the shape and agenda of its next government and offered little clarity about who would succeed Chancellor Angela Merkel.

At least initially, the world's fourth-largest economy and the European Union's biggest member could find itself without strong leadership, then with a weakened government in the following four years.

Read More ->

Congress Heads Into Tumultuous Week Pressured by Converging Deadlines

WASHINGTON-A slew of high-stakes deadlines will collide on Capitol Hill this week, setting up potentially chaotic negotiations against the backdrop of expiring government funding and the threat of a possible U.S. default.

Even by the standards of a Capitol used to operating under pressure, this week's maelstrom of legislative and fiscal crosscurrents is setting the stage for an extraordinary sprint. Democratic leaders are trying to shepherd two complicated legislative packages: a roughly $1 trillion bipartisan infrastructure bill and a sprawling healthcare, education and climate package whose proposed $3.5 trillion price tag and contents are still under intense debate within the party.

Read More ->

WHO Seeks to Revive Stalled Inquiry Into Origins of Covid-19 With New Team

The World Health Organization is reviving its stalled investigation into the origins of the Covid-19 virus as agency officials warn that time is running out to determine how the pandemic that has killed more than 4.7 million people world-wide began.

A new team of about 20 scientists-including specialists in laboratory safety and biosecurity and geneticists and animal-disease experts versed in how viruses spill over from nature-is being assembled with a mandate to hunt for new evidence in China and elsewhere.

Read More ->

Covid-19 Panel of Scientists Investigating Origins of Virus Is Disbanded

Columbia University professor Jeffrey Sachs said he has disbanded a task force of scientists probing the origins of Covid-19 in favor of wider biosafety research.

Dr. Sachs, chairman of a Covid-19 commission affiliated with the Lancet scientific journals, said he closed the task force because he was concerned about its links to EcoHealth Alliance. The New York-based nonprofit has been under scrutiny from some scientists, members of Congress and other officials since 2020 for using U.S. funds for studies on bat coronaviruses with the Wuhan Institute of Virology, a research facility in the Chinese city where the first Covid-19 outbreak occurred.

Read More ->

Write to sarka.halas@wsj.com

TODAY IN CANADA

Earnings:

Aurora Cannabis 4Q

Economic Indicators:

Nothing major scheduled

Expected Major Events for Monday

05:00/JPN: Jul Indexes of Business Conditions - Revision

08:00/ITA: Aug Foreign Trade non-EU

08:30/UK: Aug Capital issuance

12:30/US: Aug Advance Report on Durable Goods

14:30/US: Sep Texas Manufacturing Outlook Survey

23:01/UK: Aug Zoopla House Price Index

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

Expected Earnings for Monday

Adamis Pharmaceuticals Corp (ADMP) is expected to report $-0.04 for 2Q.

Allied Healthcare (AHPI) is expected to report for 4Q.

Aurora Cannabis Inc (ACB,ACB.T) is expected to report for 4Q.

Concentrix Corp (CNXC) is expected to report for 3Q.

Escalon Medical (ESMC) is expected to report for 4Q.

Espey Manufacturing & Electronics Corp (ESP) is expected to report for 4Q.

Fonar Corp (FONR) is expected to report for 4Q.

Natural Alternatives International Inc (NAII) is expected to report for 4Q.

Perpetua Resources Corp (PPTA.T) is expected to report for 3Q.

Pioneer Bancorp Inc (PBFS) is expected to report for 4Q.

S&W Seed (SANW) is expected to report $-0.16 for 4Q.

iBio Inc (IBIO) is expected to report $-0.04 for 4Q.

Powered by Kantar Media and Dow Jones.

ANALYST RATINGS ACTIONS

Allogene Therapeutics Raised to Outperform From Market Perform by Raymond James

BJ's Restaurants Raised to Buy From Hold by Jefferies

CenterPoint Energy Raised to Overweight From Sector Weight by Keybanc

Cheesecake Factory Raised to Buy From Hold by Jefferies

Chuy's Holdings Raised to Buy From Hold by Jefferies

Dave & Busters Raised to Buy From Hold by Jefferies

Hexcel Cut to Neutral From Buy by Seaport Global

Infinera Cut to Neutral From Buy by MKM Partners

Red Robin Raised to Buy From Hold by Jefferies

Roku Cut to Equal-Weight From Overweight by Wells Fargo

SL Green Realty Raised to Neutral From Underperform by B of A Securities

Spire Inc Raised to Buy From Neutral by Mizuho

Tenable Holdings Raised to Buy From Hold by Berenberg

Valley National Bancorp Raised to Neutral From Sell by Citigroup

Vornado Raised to Neutral From Underperform by B of A Securities

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

(END) Dow Jones Newswires

September 27, 2021 06:12 ET (10:12 GMT)

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