MARKET WRAPS
Watch For:
University of Michigan Preliminary Consumer Survey for August;
World Agricultural Supply & Demand Estimates
Opening Call:
Stock futures traded higher Friday as more signs emerged that
inflation in the U.S. has been cooling.
Inflation, and the Federal Reserve's quest to conquer it by
raising interest rates, have dominated the attention of markets in
recent months and largely drove their direction this week.
"The data keep piling up that the corner has been turned on
inflation," said Jamie Cox, managing partner at Harris Financial
Group. "The Fed no longer needs to apply emergency brake monetary
policy, and that's a good thing. Soft landing runway is in
sight."
However, San Francisco Fed President Mary Daly said the central
bank's fight against rising inflation wasn't over. She told
Bloomberg Television that inflation data for July are "significant
in that they are saying that we're seeing some improvement but
they're not victory."
Daly added her base case calls for an interest-rate hike of 50
basis points when the Fed next meets in September, following the
last two more aggressive rates boosts of 75 basis points. But the
Fed president told Bloomberg she has an "open mind" if the data
point to another large increase being necessary.
A consumer sentiment gauge from the University of Michigan due
Friday could further clarify how consumers are feeling about
prices. It also might offer investors an extra clue about how
consumer demand could evolve in the coming weeks and months.
Michigan's survey is expected to report midmonth sentiment of
52.5, according to two dozen economists surveyed by The Wall Street
Journal. That would mark a slight improvement from July's final
reading of 51.5. The survey's consumer-confidence index has
plummeted this year, nearing the lowest level in the indicator's
roughly six-decade history.
"We are living through a very confusing economic moment," Ross
Mayfield, an investment strategy analyst at Baird Private Wealth
Management, said. "Thanks to the millions of aftershock effects of
the Covid-19 pandemic and Russia-Ukraine war, it can feel like up
is down and bad is good.
"Inflation still reigns supreme in the minds of investors,"
Mayfield added. "And whether the stock market has officially
bottomed or not, the path forward will be determined by inflation
and the reaction of the Fed."
John Lynch, chief investment officer at Comerica Wealth
Management, said while he was encouraged by the moderation in
pricing pressures, "investors must recognize the Fed's challenge in
reducing inflation."
Lynch said that "simply shifting to a pattern of 50 basis points
[interest rate hikes] doesn't eliminate the risk to the economy or
the financial markets."
The CME FedWatch tool indicates that a majority of investors,
59.5%, are anticipating the Fed will boost rates by 0.5 a
percentage point in September. The probability for a rate hike of
0.75 a percentage point was at 40.5%. The probabilities were more
or less reversed earlier in the week before the inflation data were
issued.
Forex:
The dollar was slightly higher in Europe against a basket of
currencies but may weaken again as "Fed pivot" bets grow, analysts
said.
If the Fed meets market expectations to raise rates by only 50
basis points in September, this will likely mark the peak of its
aggressive rate-increase cycle, according to CMC Markets.
However, other central banks may keep pace on tightening,
especially the European Central Bank which appears to have just
begun its aggressive rate-increase cycle and which may cause
further dollar weakness.
---
Sterling is more likely to be driven by broad risk appetite than
Friday's better-than-expected U.K. economic growth data, said MUFG
Bank.
"In reality the better June print doesn't change the overall
backdrop and won't alter at all the Bank of England's outlook and
hence its policy outlook," MUFG said.
The U.K. economy contracted 0.6% on month in June, less than the
1.3% decline expected by economists in a WSJ survey. For the second
quarter, the economy contracted by 0.1% on quarter against
expectations for a 0.2% drop.
Bonds:
The 10-year Treasury yield has probably reached bottom, based on
technical charts, according to UOB Global Economics & Markets
Research.
On Thursday, the 10-year yield rose to breach resistance on a
declining trendline and the 55-day exponential moving average.
These developments and the yield's movements suggest the 10-year
yield's downside risk has dissipated and the 2.516% level is likely
a bottom which may hold for at least several weeks.
Going forward, the 10-year yield is expected to move between
2.516% and 3.103%, UOB said.
Energy:
Oil prices ticked higher in early European trade and remained on
course for a weekly rise as concerns about limited supplies
persist.
Recession fears have undermined the demand outlook for oil and
weakened prices in recent days but investors remain concerned about
extreme tightness in the market, limited spare capacity, and a lack
of investment in new supplies, said Neuberger Berman.
"We know supply across the board is visibly tight due to
underinvestment and supply is going to remain very tight."
Metals:
Base metals and gold were holding steady in London, with
sentiment wavering over mixed macro signals.
Figures from the U.K. showed the economy contracted 0.1% in the
three months to June, with a recession likely from October
onward.
In Asia, "sentiment onshore is still generally positive this
week, especially when domestic demand is expected to improve in the
second half of 2022," according to Marex.
TODAY'S TOP HEADLINES
J&J to Stop Selling Talc-Based Baby Powder Globally Next
Year
Johnson & Johnson will stop selling baby powder made with
talc globally in 2023, the company said Thursday.
The decision comes after the New Brunswick, N.J.-based company
stopped selling the product in the U.S. and Canada in 2020, citing
a decline in customer demand amid safety concerns about one of its
most famous products.
Meditation App Calm Lays Off 20% of Staff
Calm.com Inc., maker of popular meditation and wellness app
Calm, has laid off 20% of its staff, according to a memo sent by
Chief Executive David Ko to employees on Thursday.
People familiar with the matter said San Francisco-based Calm
employed roughly 400 people, and that approximately 90 were laid
off.
Rivian's Losses Nearly Triple to $1.7 Billion
Rivian Automotive Inc. reported its net loss in the second
quarter nearly tripled to $1.7 billion, further pressuring the
electric-vehicle startup to conserve cash and move quickly to fill
customer orders.
The California-based SUV and truck maker said revenue for the
quarter was about $364 million as it increased production and
deliveries of its first three models. Rivian started manufacturing
vehicles for the first time late last year.
GSK, Sanofi, Haleon Shares Recover Some Recent Losses After
Zantac Drug Responses
Shares in GSK PLC, Sanofi and Haleon PLC all rose on
Friday--recouping some of their losses over the past few
days--after the companies issued statements responding to recent
comments related to the U.S. lawsuits over discontinued heartburn
drug Zantac.
Shares of GSK are currently trading 2.0% higher at 1,427.60
pence, Sanofi 0.4% higher at EUR85.18 and Haleon 0.3% higher at
266.70 pence.
UK Economy Contracted in 2Q As Inflation and Ukraine War Takes
Toll
The U.K. economy contracted in the second quarter, as inflation
and uncertainty from Russia's invasion of Ukraine took their toll
on the economy.
U.K. gross domestic product fell 0.1% from April to June
compared with the preceding quarter, the Office for National
Statistics said Friday, easing from the 0.8% expansion registered
in the first quarter. Economists polled by The Wall Street Journal
expected the economy to contract by 0.2%.
Trump Won't Oppose Release of Search Warrant
WASHINGTON-The Justice Department on Thursday asked a Florida
judge to unseal the warrant FBI agents used to search former
President Donald Trump's Mar-a-Lago home this week, along with a
list of items they took from the property.
The request raises the prospect that underlying reasons for the
extraordinary search of the former president's home could soon
become public.
Write to paul.larkins@dowjones.com TODAY IN CANADA
Earnings:
2Q unless stated otherwise
Anaergia
Aya Gold & Silver
dentalcorp
Fennec Pharma
Karora Resources
MDA
Neo Performance
Q4
Softchoice
Economic Indicators:
None scheduled
Stocks to Watch:
Algonquin Power 2Q Rev $624.3M; 2Q Adj EPS 16c; 2Q Loss/Shr
5c
---
Avcorp 2Q Loss/Shr C$0.02; 2Q Rev C$29.3M
---
Epsilon Energy 2Q EPS 44c
---
Farmers Edge 2Q Loss/Shr C$0.56 Vs. Loss C$0.24; 2Q Rev C$7.7M
Vs. C$6.15M
---
FG Financial Group 2Q Loss/Shr 87c; 2Q Loss $5.48M
---
Global Atomic 2Q EPS C$0.00; 2Q Rev C$397,862
---
Hardwoods Distribution 2Q EPS $1.76; 2Q Sales $700.2M
---
High Arctic 2Q Rev C$25.7M Vs. C$16.4M; Rev Rose Across
Drilling, Ancillary Services, Canadian Production Services
Segments; Loss/Shr C$0.42 Vs. Loss C$0.08; 6-Mos Loss/Shr C$0.47
Vs. Loss C$0.19; 6-Mos Rev C$54.4M Vs. C$34.1M; Maintained Strong
Balance Sheet, With Working Cap Balance of C$27.5M; to Focus on
Growth Opportunities in PNG; Might Return Surplus Cash From
Canadian Well-Servicing Business Sale to Shareholders
---
Intermap 2Q Loss/Shr 2c
---
Mdf Commerce 1Q Rev C$32.2M Vs. C$22.6M; 1Q Loss/Shr C$0.14 Vs.
Loss C$0.15
---
Nexus Industrial REIT 2Q Property Rev C$34.1M Vs. C$18.7M; NAV
Per Unit at C$12.41 as of End June Vs. C$12.35 End March; C$11.21
End June 2021; 2Q FFO C$15.7M Vs. C$8.9M; 2Q Distributions Per Unit
C$0.160 Vs. C$0.160; 2Q Net Operating Income of C$24.0M, Up 96%; to
Make Aug Cash Distribution of C$0.05333/Unit
---
Northland Power 2Q Sales C$556.8M Vs. C$408.3M; Basic EPS C$1.01
Vs. Loss C$0.06; 6-Mos Sales C$1.25B Vs. C$1.02B; 6-Mos Basic EPS
C$2.01 Vs. C$0.40; Sees FY Adjusted Ebitda at C$1.25B-C$1.35B Vs.
C$1.15B to C$1.25B Previously; Sees FY Adjusted Free Cash Flow Per
Shr at C$1.85-C$2.05 Vs. C$1.65-C$1.85; Sees FY Free Cash Flow Per
Share at C$1.40-C$1.60 Vs. C$1.20-C$1.40; Financial Position Still
Strong, Co Well-Placed to Fund Growth Objectives
---
NXT Energy Solutions 2Q Loss/Shr C$0.03; YTD Loss/Shr C$0.06;
Cash & Short-Term Investments at June 30 Were C$1.12M
---
Tetra Bio-Pharma Secures $6.0M Financing From Alpha Blue Ocean;
Tetra Bio-Pharma Agrees to Issue to Investor Debentures,
Warrants
---
VitalHub 2Q Rev C$9.5M, Up 64%; Cash on Hand as of End June at
C$36.8M Vs C$16.4M as of End Dec 2021
Expected Major Events for Friday
05:30/FRA: 2Q ILO Unemployment and Labour Market-related
indicators
06:00/UK: Jun Index of Production
06:00/UK: Jun UK trade
06:00/UK: Jun Index of services
06:00/UK: 2Q First quarterly estimate of GDP
06:00/UK: Jun Monthly GDP estimates
06:45/FRA: Jul CPI
08:00/ITA: Jun Foreign Trade EU
08:30/UK: 2Q Business investment in the UK: provisional
results
11:30/UK: Jul NIESR Monthly GDP Tracker
12:30/US: Jul Import & Export Price Indexes
14:00/US: Aug University of Michigan Survey of Consumers -
preliminary
16:00/US: World Agricultural Supply & Demand Estimates
(WASDE)
All times in GMT. Powered by Onclusive and Dow Jones.
Expected Earnings for Friday
Acorn Energy (ACFN) is expected to report for 2Q.
Aimia (AIM.T) is expected to report for 2Q.
Airsculpt Technologies Inc (AIRS) is expected to report for
2Q.
Boston Omaha Corp (BOC) is expected to report for 2Q.
Broadridge Financial Solutions Inc (BR) is expected to report
$2.19 for 4Q.
CASI Pharmaceuticals (CASI) is expected to report for 2Q.
Cadiz Inc (CDZI) is expected to report $-0.10 for 2Q.
Canlan Ice Sports (ICE.T) is expected to report for 2Q.
Carver Bancorp Inc (CARV) is expected to report for 1Q.
Charles Schwab (SCHW) is expected to report.
Constellation Energy Corp (CEG) is expected to report for
2Q.
ContraFect Corp (CFRX) is expected to report for 2Q.
DATATRAK International Inc (DTRK) is expected to report for
2Q.
EBET Inc (EBET) is expected to report for 3Q.
Enterprise Group (E.T) is expected to report for 2Q.
GLG Life Tech Corp (GLG.T,GLGLF) is expected to report for
2Q.
Honest Company Inc (HNST) is expected to report for 2Q.
Houston American Energy Corp (HUSA) is expected to report for
2Q.
Hugoton Royalty Trust (HGTXU) is expected to report for 2Q.
Humacyte Inc (HUMA) is expected to report for 2Q.
Inrad Optics (INRD) is expected to report for 2Q.
KLX Energy Services Holdings Inc (KLXE) is expected to report
for 2Q.
Lassonde (LAS.A.T) is expected to report for 2Q.
Oconee Federal Financial Corp (OFED) is expected to report for
4Q.
Odyssey Marine Exploration Inc (OMEX) is expected to report for
2Q.
POINT Biopharma Global Inc (PNT) is expected to report for
2Q.
Power REIT (PW) is expected to report for 2Q.
PureCycle Technologies Inc (PCT) is expected to report for
2Q.
Sabina Gold & Silver Corp (SBB.T,SGSVF) is expected to
report for 2Q.
Soligenix Inc (SNGX) is expected to report $-0.08 for 2Q.
Sonida Senior Living Corp (SNDA) is expected to report for
2Q.
Sonnet BioTherapeutics Holdings Inc (SONN) is expected to report
for 3Q.
SouthGobi Resources Ltd (1878.HK,SGQ.T,SGQRF) is expected to
report for 2Q.
Spectral Medical Inc (EDT.T) is expected to report $-0.01 for
2Q.
Spectrum Brands Holdings Inc (SPB) is expected to report $1.33
for 3Q.
Star Equity Holdings Inc (STRR) is expected to report for
2Q.
Statera Biopharma Inc (STAB) is expected to report for 1Q.
TeraWulf Inc (WULF) is expected to report for 2Q.
Twin Disc Inc (TWIN) is expected to report $0.17 for 4Q.
Venus Concept Inc (VERO) is expected to report for 2Q.
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ANALYST RATINGS ACTIONS
Barings BDC Cut to Outperform From Strong Buy by Raymond
James
BBQ Holdings Cut to Hold From Buy by Craig-Hallum
Bolt Biotherapeutics Cut to Market Perform From Outperform by
SVB Leerink
Boot Barn Holdings Raised to Buy From Neutral by Seaport
Global
BuzzFeed Cut to Underperform From Neutral by B of A
Securities
Cheniere Energy Partners Raised to Outperform From In-Line by
Evercore ISI Group
Deere & Co Raised to Outperform From In-Line by Evercore ISI
Group
Disney Raised to Buy From Neutral by Guggenheim
Elastic Cut to Neutral From Buy by Monness, Crespi, Hardt
Expensify Raised to Buy From Hold by Loop Capital
First Solar Raised to Overweight From Sector Weight by
Keybanc
Fiserv Raised to Outperform From In-Line by Evercore ISI
Group
Fisker Cut to Neutral From Outperform by Exane BNP Paribas
Gates Industrial Cut to In-Line From Outperform by Evercore ISI
Group
Getty Images Holdings Cut to Hold From Buy by Benchmark
Healthcare Realty Raised to Outperform From Neutral by SMBC
Nikko
Hyliion Holdings Cut to Neutral From Overweight by Cantor
Fitzgerald
Hyperfine Cut to Equal-Weight From Overweight by Wells Fargo
IsoPlexis Cut to Equal-Weight From Overweight by Morgan
Stanley
IsoPlexis Cut to Market Perform From Outperform by SVB
Leerink
Landec Raised to Outperform From Market Perform by Barrington
Research
Life Time Group Holdings Cut to Underweight From Equal-Weight by
Wells Fargo
Lowe's Cut to Neutral From Buy by Citigroup
Marqeta Cut to Equal-Weight From Overweight by Wells Fargo
OppFi Cut to Neutral From Buy by DA Davidson
Paccar Cut to In-Line From Outperform by Evercore ISI Group
Professional Holding Cut to Market Perform From Outperform by
Keefe, Bruyette & Woods
Rackspace Technology Cut to Market Perform From Outperform by
William Blair
Rackspace Technology Cut to Sector Perform From Outperform by
RBC Capital
Red Robin Cut to Hold From Buy by Benchmark
Seer Cut to Neutral From Overweight by JP Morgan
Traeger Cut to Market Perform From Outperform by William
Blair
Traeger Cut to Neutral From Outperform by Baird
Trinseo Cut to Hold From Buy by Deutsche Bank
Unifi Cut to Market Perform From Market Outperform by CJS
Securities
Upstart Holdings Cut to Underweight From Neutral by Atlantic
Equities
Welltower Cut to Neutral From Outperform by SMBC Nikko
This article is a text version of a Wall Street Journal
newsletter published earlier today.
(END) Dow Jones Newswires
August 12, 2022 05:10 ET (09:10 GMT)
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