MARKET WRAPS

Watch For:

S&P CoreLogic Case-Shiller Home Prices Index for September; Chicago Business Barometer for November; Conference Board Consumer Confidence for November; Canada GDP for September

Opening Call:

Stock futures tumbled anew on Tuesday after Moderna's chief executive officer Stéphane Bancel predicted that current vaccines would be less effective against the new omicron variant of Covid.

Just as markets appeared to be finding their footing after the worst session in more than a year on Friday, downbeat comments from vaccine maker Moderna's CEO about the prospects for vaccines against the new omicron variant put them back on shaky ground.

"There is no world, I think, where [the effectiveness] is the same level...we had with delta," Bancel told the Financial Times in an interview that published early Tuesday. He said the scientists he has spoken to expect a "material drop" in effectiveness of current vaccines against omicron.

Bancel cited the much higher number of mutations on the spike protein of the omicron variant and the speed at which it's currently spreading across Africa as reasons. He predicted vaccine manufacturers would need several months to mass produce a vaccine that would be effective against omicron.

"His tone contrasts with the likes of Pfizer and BioNTech who suggested any new vaccine would be able to modified fairly quickly. His rather candid comments have also seen oil prices slide back sharply, as an increasingly jittery market react with concern to the prospects of further restrictions and lower demand," said Michael Hewson, chief market analyst at CMC Markets.

"As we look ahead to the rest of the week, this morning's drop in markets shows that sentiment is set to remain extremely fickle until we get a clearer idea of what comes next when it comes to the new variant," said Hewson.

Investors awaited testimony from Jerome Powell on Tuesday for clues on how the new variant might impact the outlook for inflation and interest-rate rises. Mr. Powell is expected to say that the new strain could intensify the supply-chain issues that have fueled a spike in inflation.

Should the Omicron strain prompt fresh lockdowns it would put the central bank in a difficult position by worsening inflation and strengthening calls for rate rises just as the economy and markets take a hit, said Seema Shah, chief strategist at Principal Global Investors.

"We had been starting to see this glimmer of hope that some of the supply-side constraints were starting to ease," she said. "If we go back into fear mode you would be looking at those supply-side bottlenecks being exacerbated."

Also in focus Tuesday will be data on house prices and consumer confidence, set to be released at 9 a.m. ET and 10 a.m., respectively. Earnings from Salesforce.com and Hewlett Packard Enterprise are due after markets close.

Overseas, the Stoxx Europe 600 dropped 1.3% led by oil and travel stocks. In Asia, stock markets closed mixed.

Stocks to Watch:

For American Airlines, an uneventful Thanksgiving was welcome. The airline beat its operational goals for the busy holiday week, with 85.3% of flights arriving on time and just 0.5% cancelled--its most reliable operation over Thanksgiving since 2017, according to a memo to employees from COO David Seymour.

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Food manufacturer J.M. Smucker is closely watching the new Omicron variant, CFO Tucker Marshall said. "I think it's early innings for us to understand the impact of the new variant," Mr. Marshall said, adding that Smucker hasn't taken any specific actions in response to the variant that was confirmed last week.

Smucker, which reported higher sales during its most recent quarter, is bracing for continued uncertainty --especially in terms of supply chains -- as well as inflation, Mr. Marshall said. "The outlook continues to demonstrate that we are an inflationary environment and we will have to continue to manage those cost increases with productivity savings, along with taking pricing actions where appropriate."

Smucker, which saw its gross margin fall to 34.7% during the second quarter, from 40.2% a year earlier, expects its margin will improve during its next fiscal year, Mr. Marshall said.

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Truckload carrier Werner Enterprises has added to its last-mile delivery services with an acquisition of a last-mile delivery specialist. Werner has bought NEHDS Logistics and its fleet of more than 400 delivery trucks for $64 million.

Forex:

The dollar was lower in Europe, particularly against the low-yielding euro, yen and Swiss franc, as market sentiment was jolted by renewed concern about the Omicron variant of Covid-19. The buck's fall was exacerbated by Jerome Powell's comments that the variant could exacerbate inflation uncertainty and slow labor-market progress.

"Omicron fears have prompted market participants to scale back expectations for tighter Fed policy, which is also helping to trigger the correction lower in U.S. yields and USD/JPY," said MUFG currency analyst Lee Hardman.

Swings in market sentiment related to the Omicron variant are likely to be the main driver of the euro Tuesday, ING said.

"A popular funding currency before the Omicron-induced correction, it is likely that we need to see some confidence being re-built into risk trades to see the EUR depreciate across the board," ING forex strategist Francesco Pesole said. The low-yielding euro is used to fund the purchase of more risky currencies with higher yields in so-called carry trades.

ING said Omicron poses a threat to the pound's outlook. "A worsening of the virus situation globally and specifically in the U.K. may not only put upward pressure on EUR/GBP due to the pound's higher sensitivity to risk sentiment but may also mean markets could increasingly price out a December [interest] rate hike by the Bank of England."

While it's too early to draw conclusions on that, a "choppy risk environment" may lift EUR/GBP on Tuesday, ING forex strategist Francesco Pesole said.

Bonds:

The yield on the benchmark 10-year Treasury note, viewed as a safe asset to hold, fell to 1.443%. Eurozone government bond yields were also lower as the market shifted into a risk-off mood.

"Relief sentiment is already fading on sobering vaccine news," Michael Leister, head of interest rates strategy at Commerzbank said.

Deutsche Bank said the 10-year German Bund yield is set to turn into positive territory for the first time in years in 2022, forecasting the end-2022 level at 0.20%.

Long-term Treasury yields should continue to be driven by the continuing recovery in economic indicators, particularly on the labor side, Deutsche added.

Ulrich Stephan, chief investment strategist for private and corporate clients sees the yield on the 10-year Treasury yield at 2% by the end of 2022, but he doesn't rule out an overshooting of that level in the first half of the year.

Commodities:

Oil fell sharply in Europe, with prices now around flat for the week so far after volatility Friday and Monday over the feared effects of the Omicron coronavirus variant.

However "it is still too early to sensibly assess the risk that Omicron poses and this uncertainty is likely to add further volatility to the oil market," said ING's Warren Patterson. "The uncertainty of this latest variant will also make the job of OPEC+ more difficult."

OPEC's preliminary meetings have been delayed to later in the week, and with the full meeting going ahead Thursday "we would not rule out the group pausing its supply increases over January," Patterson said.

Copper prices also fell, with ING saying that while the severity of Omicron remains a big uncertainty, it casts a shadow over demand growth in the near future and further complicates the supply chain.

TODAY'S TOP HEADLINES

Merck's Covid-19 Pill to Be Reviewed by FDA Advisers

An outside panel of scientific advisers to the Food and Drug Administration is scheduled to meet Tuesday to discuss the experimental Covid-19 oral antiviral from Merck & Co. and partner Ridgeback Biotherapeutics LP.

At the end of the meeting, the panel, known as the Antimicrobial Drugs Advisory Committee, is expected to vote on whether to recommend that the agency clear the pill for emergency use, which may be limited to only high-risk people.

Appliance Business Cast Off by GE Thrives Under Chinese Ownership

LOUISVILLE, Ky.-When General Electric Co. agreed to sell its appliance unit to a Chinese manufacturer in 2016, the future wasn't clear for the business, its workers or the tens of millions of U.S. households owning GE appliances.

Nearly six years later, GE Appliances is growing, having increased its U.S. market share every year since 2017. Since being bought by Qingdao, China-based Haier Group, GE Appliances has invested about $1.5 billion in technology and new products, and added about 3,000 jobs for a total U.S. workforce of 15,000. In October, the company announced an additional $450 million investment and 1,000 new jobs at its main Appliance Park campus in Louisville that makes washers, dryers, dishwashers and refrigerators.

Manulife Banks Nearly $4.7 Billion for Second Infrastructure Investment Fund

Manulife Investment Management has raised $4.65 billion to invest in infrastructure, a sector where investors' hopes have been sparked by the transition to renewable energy and the possibility of increased U.S. government spending.

FDA Moving to Authorize Pfizer-BioNTech Booster for 16-, 17-Year-Olds

The Food and Drug Administration could authorize Covid-19 boosters from Pfizer Inc. and BioNTech SE for use in 16- and 17-year olds as soon as next week as concerns rise over a new, possibly more transmissible variant, according to a person familiar with the planning.

The agency is planning to move rapidly to take action on a request by the companies to authorize boosters for 16- and-17 year olds, according to a person familiar with the matter. So far, only people 18 years and older are eligible for boosters.

FTC Asks Amazon, Walmart for Information About Supply-Chain Issues

The Federal Trade Commission is seeking information from Amazon.com Inc., Procter & Gamble Co., Walmart Inc. and others about how they are handling supply-chain snarls, part of a study into whether the problems have led to anticompetitive behavior and higher prices.

The document request isn't part of any law-enforcement action, the FTC said in a press release. Instead, the agency said it is looking to understand the reasons behind the widespread supply-chain problems that have crimped economic growth.

Lululemon Hits Back at Peloton, Sues Over Allegedly Copied Designs

Lululemon and Peloton used to make workout clothes together. Now, they're locked in a legal battle.

The first lawsuit came last week, when Peloton Interactive Inc. pre-emptively sued Lululemon Athletica Inc. in the Southern District of New York, asking a federal court to declare that it didn't infringe on Lululemon's designs.

Amazon Alabama Workers to Hold New Union Vote, Federal Labor Official Rules

A federal official has ordered a new unionization vote for Amazon.com Inc. workers in Alabama, saying the company violated labor law in its campaign against organizing earlier this year, according to the National Labor Relations Board.

The ruling sets the stage for a new vote in a contest that drew attention to the working conditions of warehouse employees at Amazon, the nation's second-largest private employer. President Biden voiced his support for the workers, and a number of Democratic politicians and celebrities also joined their cause.

Schick Owner Edgewell Personal Care Buys Women's Razor Brand Billie

The maker of Schick razors has acquired women's razor maker Billie Inc., after federal antitrust regulators scuttled an attempt by rival Procter & Gamble Co. to buy the online startup.

Edgewell Personal Care Co. said Monday it paid $310 million for Billie, which also sells body lotion, lip balm and other personal care products online. Billie's annual revenue is around $90 million, the company said.

CNN to Review Records Showing Chris Cuomo's Involvement in Coaching Brother

CNN said it would review newly released records that show anchor Chris Cuomo coaching his brother, former New York Gov. Andrew Cuomo, on possible responses to allegations of sexual harassment.

The records, which were released Monday by the office of New York Attorney General Letitia James from an investigation conducted into allegations of sexual harassment against Andrew Cuomo, include text messages sent by Chris Cuomo to one of his brother's top aides and a transcript of an interview with Chris Cuomo conducted by investigators working for Ms. James.

Theranos Founder Elizabeth Holmes Testifies Balwani Berated, Abused Her

In tearful and intense testimony, Elizabeth Holmes said from the witness stand Monday that she had been raped while studying at Stanford University and not long after entered into an abusive relationship with the man who would become her top deputy at Theranos Inc.

"He told me that I didn't know what I was doing in business, that my convictions were wrong, that he was astonished at my mediocrity, and that if I followed my instincts I was going to fail," Ms. Holmes said.

Covid-19 Variant Omicron Threatens U.S., Global Economies

The global economy could suffer a modest blow from the Omicron variant of Covid-19, though the scale of damage will hinge on the potency of the strain itself, economists say.

Tourism spending will likely weaken, and perhaps so too will restaurant spending and shopping at stores. But compared with the initial wave of Covid-19 in March 2020 and the Delta variant this summer, Omicron's threat to economies will likely be less severe, economists say, in part because each new virus strain has had a diminished economic impact.

Gas Prices Pressure Drivers' Finances

Rachel Gould spends $50 on gas taking her two special-needs children on the three-hour trip from her home in Central Illinois to a hospital in St. Louis. That is roughly a 60% increase from the same time last year.

"You have to have gas and have to pay for it either way you look at it," said Mrs. Gould, who drives a Dodge Caravan that gets 23 miles to the gallon.

America's Power Plants Are Low on Coal

A lump of coal would be a welcome gift for many U.S. utilities.

Coal piles at power plants have dwindled to their lowest point since the 1970s, and the race to build up inventories ahead of heating season has sent domestic thermal coal prices to their highest levels in more than a decade.

New Omicron Variant Exacerbates Inflation Uncertainty, Powell Says

The new Omicron coronavirus variant risks intensifying supply-chain disruptions that have fueled a surge in inflation this year, Federal Reserve Chairman Jerome Powell said in testimony released Monday afternoon.

Mr. Powell is set to appear before the Senate Banking Committee alongside Treasury Secretary Janet Yellen on Tuesday morning.

China Manufacturing Gauge Shows Rebound in November

BEIJING-An official gauge of China's manufacturing unexpectedly rebounded to expansion in November, ending a two-month contraction resulting from a power crunch.

The official manufacturing purchasing managers index rose to 50.1 in November from October's 49.2, the National Bureau of Statistics said Tuesday.

Cyber Monday Sales Flat as Smaller Savings Curb Incentive to Spend

U.S. online sales were flat throughout Cyber Monday, as smaller discounts gave shoppers less incentive to spend, but analysts say sales could finish slightly higher than last year by the time West Coast shoppers finish for the night.

Shoppers spent $7.1 billion online as of 9 p.m. eastern time in the U.S., according to transaction data compiled by the Adobe Digital Economy Index. Shoppers are expected to spend between $10.4 billion and $11.1 billion on Cyber Monday, Adobe said. American consumers spent $10.8 billion online last year.

FTC Asks Amazon, Walmart for Information About Supply-Chain Issues

The Federal Trade Commission is seeking information from Amazon.com Inc., Procter & Gamble Co., Walmart Inc. and others about how they are handling supply-chain snarls, part of a study into whether the problems have led to anticompetitive behavior and higher prices.

The document request isn't part of any law-enforcement action, the FTC said in a press release. Instead, the agency said it is looking to understand the reasons behind the widespread supply-chain problems that have crimped economic growth.

U.S., Allies Weigh Response to Russian Military Buildup Around Ukraine

RIGA, Latvia-NATO foreign ministers are meeting here Tuesday to calibrate a response to Russia's military buildup around Ukraine, seeking to deter the Kremlin from any potential assault while making clear the limits of its support.

Concern over the Russian buildup has risen in recent weeks. The U.S. has briefed allies that Moscow could launch a new military operation in Ukraine, following its seizing of Crimea and covert invasion of its neighbor's east in 2014. Russia, which wants to draw the former Soviet republic back into its orbit, says it has no plans to invade and can move troops as it wishes on its sovereign territory.

FDA Moving to Authorize Pfizer-BioNTech Booster for 16-, 17-Year-Olds

The Food and Drug Administration could authorize Covid-19 boosters from Pfizer Inc. and BioNTech SE for use in 16- and 17-year olds as soon as next week as concerns rise over a new, possibly more transmissible variant, according to a person familiar with the planning.

The agency is planning to move rapidly to take action on a request by the companies to authorize boosters for 16- and-17 year olds, according to a person familiar with the matter. So far, only people 18 years and older are eligible for boosters.

Omicron Crept Into Australia After Strict Border Rules Were Eased

Two days before Australia tightened border controls in response to the new Omicron variant of Covid-19, a woman arrived in Sydney on a one-stop flight from southern Africa and visited several shops before heading up the coast.

Health officials in New South Wales, the country's most populous state, said the woman was infected with the Omicron variant of Covid-19. They are now racing to map her movements and identify contacts in an effort to prevent the virus from spreading in the community.

CDC Says Everyone 18 and Older Should Get Covid-19 Booster Due to Omicron Variant

The Centers for Disease Control and Prevention strengthened its Covid-19 booster-shot recommendations, reflecting the potential threat the new Omicron variant poses to the pandemic response in the U.S. and world-wide.

The CDC on Monday recommended that everyone 18 and older get an additional shot after completing a first course of Covid-19 vaccination. The agency earlier this month encouraged boosters only for those 50 and above, adding that people ages 18 and above could get an additional dose.

Pentagon to Investigate 2019 Syria Airstrike That Killed Women and Children

WASHINGTON-Defense Secretary Lloyd Austin has ordered an investigation into a 2019 U.S. strike in Syria that killed dozens of people, including women and children, but that wasn't publicly acknowledged by the military until this year, the Defense Department said Monday.

Gen. Michael X. Garrett, who is in charge of Army Forces Command, will lead the inquiry and will look at the number of civilians killed, whether the U.S. complied with the laws of war in launching the attack, how the military records such events, and whether anyone should be held accountable for the deaths, Pentagon spokesman John Kirby said.

Write to paul.larkins@dowjones.com TODAY IN CANADA

Earnings:

Bank of Nova Scotia 4Q

Economic Indicators (ET):

0830 Sep GDP

0830 3Q Quarterly GDP

Stocks to Watch:

Amarillo to Be Acquired by Hochschild for C$0.40/Share, Shares in New Company Lavras; Amarillo Transaction Value is C$164.5M Excluding Lavras Asset Value, C$10M Cash; Amarillo Shareholders Will Receive 1 Share of Lavras for Every Amarillo Share Held; Lavras Will Hold All Assets, Rights Related to Lavras do Sul Gold Project in Southern Brazil

InPlay, Prairie Storm Get Shareholder, Court Approvals for Business Combination; InPlay to Acquire All Prairie Storm Shares in Exchange for 0.0524 of an InPlay Share, C$0.2514 Cash for Each Outstanding Prairie Storm Share

MEG Energy Sets 2022 Capital Budget of C$375M; Expects 2022 Production of 94,000 to 97,000 Barrels Per Day

Nickel Creek Platinum: Drilling Component of the 2021 Exploration Program Comprised 12 Holes; Drilling Has 'Clearly Shown the Capability of Nickel Shäw to Host Near Surface Massive Sulphide and TPM Mineralization With Significant Nickel, Copper, Platinum and Palladium Grades'

Expected Major Events for Tuesday

00:01/UK: CBI Service Sector Survey

04:30/JPN: Oct Preliminary Report on Petroleum Statistics

05:00/JPN: Oct Construction Orders

05:00/JPN: Oct Housing Starts

07:45/FRA: Oct Housing starts

07:45/FRA: Oct Household consumption expenditure in manufactured goods

07:45/FRA: Oct PPI

07:45/FRA: Nov Provisional CPI

07:45/FRA: 3Q GDP - detailed figures

08:55/GER: Nov Labour market statistics (incl unemployment)

09:00/GER: Nov Brandenburg CPI

09:00/ITA: 3Q GDP

10:00/ITA: Nov Provisional CPI

10:00/ITA: Nov Cities CPI

12:45/US: Weekly Chain Store Sales Index

13:30/CAN: Sep GDP

13:30/CAN: 3Q Quarterly GDP

13:55/US: 11/27 Johnson Redbook Retail Sales Index

14:00/US: 3Q U.S. Quarterly House Price Index

14:00/US: Sep U.S. Monthly House Price Index

14:00/US: Sep S&P CoreLogic Case-Shiller Indices

14:45/US: Nov Chicago Business Barometer - ISM-Chicago Business Survey - Chicago PMI

15:00/US: Nov Consumer Confidence Index

20:00/US: Oct Agricultural Prices

21:30/US: 11/26 API Weekly Statistical Bulletin

23:50/JPN: 3Q Quarterly Financial Statements Statistics of Corporations

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

Expected Earnings for Tuesday

Allbirds Inc (BIRD) is expected to report for 3Q.

Ambarella Inc (AMBA) is expected to report $-0.04 for 3Q.

Amerityre Corp (AMTY) is expected to report for 1Q.

Bank of Nova Scotia (BNS,BNS.T) is expected to report $1.90 for 4Q.

Barnes & Noble Education Inc (BNED) is expected to report $0.58 for 2Q.

BeyondSpring Inc (BYSI) is expected to report $-0.55 for 3Q.

Box Inc (BOX) is expected to report $-0.07 for 3Q.

Chico's FAS Inc (CHS) is expected to report $0.01 for 3Q.

Citi Trends Inc (CTRN) is expected to report $0.43 for 3Q.

DXI Capital Corp (DXI.H.V) is expected to report for 3Q.

Emcore (EMKR) is expected to report $0.16 for 4Q.

FTI Consulting (FCN) is expected to report $1.20 for 4Q.

GlobalFoundries Inc (GFS) is expected to report for 3Q.

Hennessy Advisors Inc (HNNA) is expected to report for 4Q.

Hewlett Packard Enterprise Co (HPE) is expected to report $0.19 for 4Q.

Home Financial Bancorp (HWEN) is expected to report for 1Q.

Informatica Inc (INFA) is expected to report for 3Q.

NetApp Inc (NTAP) is expected to report $1.02 for 2Q.

Orvana Minerals (ORV.T,ORVMF) is expected to report for 4Q.

Salesforce.com Inc (CRM) is expected to report $-0.04 for 3Q.

Smart Share Global Ltd - ADR (EM) is expected to report for 3Q.

Trip.com Group Ltd (K3RD.SG,TCOM) is expected to report for 3Q.

Powered by Kantar Media and Dow Jones.

ANALYST RATINGS ACTIONS

Adagio Therapeutics Raised to Overweight From Equal-Weight by Morgan Stanley

Apellis Pharmaceuticals Cut to Neutral From Buy by Roth Capital

Balchem Cut to Neutral From Buy by Sidoti & Co.

Beacon Roofing Supply Cut to Hold From Buy by Truist Securities

Bumble Raised to Outperform From Market Perform by Raymond James

Burlington Stores Raised to Buy From Neutral by Citigroup

CyrusOne Cut to Hold From Buy by Jefferies

FMC Corporation Raised to Buy From Neutral by B of A Securities

Greif Cut to Equal-Weight From Overweight by Wells Fargo

Hudson Pacific Properties Cut to Neutral From Overweight by Piper Sandler

Hyatt Hotels Raised to Overweight From Neutral by JP Morgan

Merck Cut to Neutral From Buy by Citigroup

MGP Ingredients Raised to Buy From Hold by Truist Securities

Saia Cut to Hold From Buy by Deutsche Bank

South Jersey Industries Cut to Equal-Weight From Overweight by Wells Fargo

Surgery Partners Raised to Buy From Hold by Stifel

Truist Financial Raised to Overweight From Equal-Weight by Stephens & Co.

United Parcel Service Cut to Hold From Buy by Deutsche Bank

US Bancorp Cut to Equal-Weight From Overweight by Stephens & Co.

Wells Fargo Raised to Buy From Hold by Odeon Capital

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

(END) Dow Jones Newswires

November 30, 2021 06:06 ET (11:06 GMT)

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