MARKET WRAPS

Watch For:

Employment Report for November; Canada Labour Force Survey for November; Ford November sales; Cracker Barrel Old Country Store earnings

Opening Call:

Today's Headlines/Must Reads

- November Employment Report Will Update on Tightness of Labor Market

- Cash-Hungry Companies Get Creative Raising Capital

- Blackstone Limits Redemptions From Real Estate Vehicle, Stock Sinks

- DOJ Watchdog Calls for Independent FTX Probe in Bankruptcy

- Chinese Solar Manufacturers Dodged U.S. Tariffs, Commerce Probe Finds

Follow WSJ markets coverage here .

Stock futures were steady on Friday as traders awaited the key nonfarm jobs report, which is expected to show a slowdown in both employment growth and pay.

The Labor Department is expected to report 200,000 new jobs were created in November, which would be the weakest showing in nearly two years. Average hourly pay is expected to ease to a 0.3% monthly rate.

"Today's job report will be crucial as it should provide investors with more hints on whether the Fed can really slow the pace of future rate hikes, or not," ActivTrades said.

Stocks to Watch

Aterian raised its revenue outlook for the fourth quarter based on a significant rise in Cyber Monday sales on its consumer products platform. Shares rose 4.5% in the after hours.

Marvell Technology posted disappointing third-quarter results, below consensus estimates. Shares dropped nearly 7% in after-hours trading.

Smartsheet reported better-than-expected quarterly results and guidance. Its shares rose 9% premarket.

UiPath shares rose 10% premarket after it issued revenue guidance for the current quarter above analysts' estimates.

Ulta Beauty reported higher third-quarter sales and raised its full-year outlook. Its shares gained 0.4% ahead of the bell.

Veeva Systems issued disappointing fourth-quarter guidance. Shares initially dropped 8% in after-hours trading before recovering.

Zscaler said that deals are taking months longer than usual to close and provided guidance slightly above analysts' forecasts. Its shares dropped 9% premarket.

Economic Insight

Moody's said China's financial system is exposed to rising risks amid the country's property woes and economic slowdown.

"Although the authorities continue to have tools to prevent a systemic financial crisis, some of these buffers are weakening, and could pose risks if the property downturn endures," Moody's said.

China's well-capitalized large banks can absorb significant losses, but the smaller banks are much more exposed to the property downturn, according to Moody's.

Forex:

The dollar hit its lowest in more than five months against a basket of currencies and the euro, as the pace of Fed interest-rate rises looks likely to slow, but the greenback's fall may not be as smooth as its rise was previously, Swissquote Bank said.

It noted the market's pricing of the peak in U.S. rates fell to 4.9% this week, but the Fed has indicated rates will probably go beyond 5%.

"Any piece of news or data that would rectify the Fed pricing could reverse the dollar's latest losses."

Read Weak Jobs Data More Likely to Move Dollar Than Strong Data

The euro rose to a five-month high against the dollar as markets seem to be ignoring the risks surrounding the energy crisis, ING said.

"The recovery in business sentiment in the eurozone has undoubtedly been the result of lower gas prices, which have benefitted from mild weather in Europe," ING said.

TTF natural gas contracts are trading at one-month highs and could see further upside volatility in the near-term as temperatures in northern Europe are expected to fall, ING said.

While EUR/USD could rise to 1.0600 in the near-term, a significant recovery in gas prices would make the pair's rally unsustainable.

ING also said sterling could rise further against the dollar if the nonfarm payrolls report fails to reverse the U.S. currency's downward trend, but the pound's gains will be limited, ING said.

The data may indicate the jobs market remained extremely tight, which may halt the dollar's fall but fail to invert it with the balance of risks "titled to the downside," ING said.

GBP/USD could rise to around 1.2300-1.2350 after the data, ING said. However, it isn't factoring in the implications of rebounding gas prices and weak economic fundamentals so a "return to 1.1500 around the turn of the year seems appropriate."

Bonds:

The sharp rally in Treasurys would suggest a turn is underway but it might not be the case just yet, Societe Generale said.

Jerome Powell is hopeful that inflation will moderate, "but it is too early to call the turn," SocGen said. "With expectations for 75-100 bps in rate hikes at upcoming [Fed] meetings, the rally in bonds seems a bit premature."

SocGen expects the 10-year Treasury yield at 3.65% at the end of the first quarter of 2023, before a gradual easing to 3.5% by end of the second quarter, 3.4% by end of the third quarter and 3.25% by end of the final quarter.

SocGen also said the 10-year Treasury-German Bund yield spread--currently 172 bps--could narrow close to 100 basis points in 2023.

Expectations that core inflation has likely peaked while this isn't the case for eurozone core HICP is one of the reasons why SocGen expects the spread to narrow.

A further reason is that the European Central Bank has more interest-rate rises to deliver into the spring, while the Fed is already "ahead of the game," with the EUR real curve consistent with a much more accommodative policy stance.

The ECB is also about to start quantitative tightening, while the Fed may consider its own QT, SocGen said.

Read Bond Yields Fall as Inflation Fears Ease

Energy:

Oil prices held minor gains in Europe as investors awaited the outcome of Sunday's OPEC+ meeting, with expectations the cartel is unlikely to reverse policy course and keep production flat.

This "despite expectations for a drop in Russian production following the imposition of the E.U.'s ban on seaborne imports of Russian crude and the G-7 price cap," Fitch said.

Traders will also keep a close watch on the upcoming jobs report for further clues about the health of the economy.

Read OPEC+ Likely Shy of Spotlight Ahead of Russian Price Cap, EU Ban

Metals:

Base metals edged higher in early London trade, with gold futures little changed.

Macro factors have been a heavy influence in metals pricing this year, and a weaker dollar on top of a change in the Fed's rate stance has helped copper rally 5% this week, while gold is up 3.5%.

Covid-19 controls in China are also easing in China, further helping metals demand, Marex said.

TODAY'S TOP HEADLINES

Elon Musk's SpaceX Wins Go-Ahead for 7,500 More Starlink Satellites, After Aiming for 30,000

U.S. regulators granted SpaceX permission to launch up to 7,500 upgraded satellites for its Starlink internet business, but withheld approval for a larger network sought by the Elon Musk-led business.

The Federal Communications Commission said Thursday that deploying more SpaceX satellites would be in the public interest, but it stopped short of immediately clearing the nearly 30,000 satellites it requested. The agency's order, however, left the door open for further deployments by the company in the future.

Blackstone Limits Redemptions From Real Estate Vehicle, Stock Sinks

Blackstone Inc. shares took a big hit after the investing giant's real-estate fund aimed at wealthy individuals said it would limit redemptions.

Blackstone Real Estate Income Trust Inc., more commonly known as BREIT, said Thursday in a letter posted to its website that the amount of withdrawals requested in October exceeded its monthly limit of 2% of its net-asset value and its quarterly threshold of 5%.

Layoffs Hit White-Collar Workers as Amazon, Walmart, Others Cut Jobs

Recent rounds of layoffs at large U.S. companies mark a departure from the usual pattern as executives navigate fears of an economic slowdown: This time, white-collar workers have been among the first and hardest hit.

Demand has fallen sharply for professionals in technology, legal, scientific and finance fields, and companies that ramped up staffing during the pandemic, including tech firms, are slowing down hiring or cutting jobs as they close down some projects or scale back others.

DOJ Watchdog Calls for Independent FTX Probe in Bankruptcy

A U.S. Justice Department bankruptcy watchdog called for an independent investigation into FTX's collapse, comparing the cryptocurrency platform's sudden failure to the fall of Lehman Brothers.

U.S. Trustee Andrew Vara, an official at the Justice Department unit monitoring bankruptcy courts, asked the judge overseeing FTX's chapter 11 case to appoint an independent examiner to provide a transparent account of FTX's failure because of the wider implications the exchange's collapse has on the crypto industry.

November Employment Report Will Update on Tightness of U.S. Labor Market

Friday's employment report will reveal how the labor market fared in November amid rising interest rates and high inflation.

The job market has remained resilient this year, with employers still seeking to hire despite an uncertain economic outlook and elevated recession fears. Low unemployment and wage gains have helped fuel consumer spending, the economy's main engine.

Gas Prices Are Dropping: Here's How Much Lower They Might Go

Gas prices are well below record highs hit earlier this year. Analysts think they could fall even farther.

The average cost of regular unleaded gasoline fell to $3.45 a gallon on Thursday, according to OPIS, an energy-data and analytics provider. That is among the lowest levels since Russia's invasion of Ukraine in February and a more than 30% drop from a record above $5 in June, according to OPIS.

When It Comes to Investments, the VIP Section Isn't Always Better

Congratulations. You've worked hard and made some money, and now you have access to a new class of investments. But when the velvet rope opens up, it can also close behind you.

On Thursday, investors in the $69 billion nontraded Blackstone Real Estate Income Trust, known as BREIT, were informed that their requests to take cash out of it had been limited. That highlighted the double-edged sword many relatively well-heeled investors are facing as they try to diversify their portfolios in a complex, rising-rate environment.

Cash-Hungry Companies Get Creative Raising Capital

The end of the era of easy money is forcing companies that need cash to get creative.

Dozens of companies have recently raised money through so-called structured private funding rounds, and bankers and lawyers say there are many more in the works.

Chinese Solar Manufacturers Dodged U.S. Tariffs, Probe Finds

WASHINGTON-Four leading Chinese solar-cell manufacturers circumvented U.S. tariffs by routing some of their operations through Southeast Asia, a Commerce Department investigation found, according to people familiar with it.

The preliminary findings from the closely watched probe-expected to be unveiled Friday-are likely to accelerate importers' race to find alternative sources either domestically or from other places abroad to meet soaring demand for solar panels.

Ukraine Hunts the World for Parts to Fix Crippled Energy Grid

As Russia targets Ukraine's energy grid with missiles and drones, Kyiv is running out of vital parts needed to repair a network that provides electricity for homes, businesses and hospitals.

Moscow has deliberately attacked Ukraine's ability to generate and transport power in a bid to sap the country's morale, leaving millions without heat and light as temperatures fall below freezing.

Kanye West Suspended From Twitter After Swastika Tweet

Twitter Inc. again suspended Kanye West's account after the musician and designer posted a swastika in a tweet that the social-media platform's owner, Elon Musk, said violated its rules.

Mr. West, who now legally goes by Ye and had recently returned from a previous suspension, on Thursday posted a picture of a swastika merged with the Star of David.

Biden Calls for South Carolina to Be First in Democratic Presidential Nomination Process

WASHINGTON-President Biden is suggesting a shake-up in the order of states that hold the first Democratic Party presidential nominating contests, proposing that South Carolina instead of Iowa be placed first in 2024, Democrats briefed on the plan said.

Mr. Biden would like to see New Hampshire and Nevada go next, on the same day, followed by Georgia and then Michigan on different, later days, these people said. With the exception of South Carolina, all of the states he is suggesting for early primary activity are typically battlegrounds in presidential general elections.

Senate Votes 80-15 to Pass Bill Blocking Nationwide Railroad Strike

WASHINGTON-The Senate voted to intervene to prevent a nationwide strike by railroad workers while rejecting a proposal to give them expanded paid sick leave, with lawmakers saying they reluctantly heeded President Biden's call to resolve the long-running labor dispute.

In a 80-15 vote, with one senator voting present, lawmakers agreed to force unions to adopt an earlier labor agreement mediated by the administration. The measure now goes to the White House, and Mr. Biden said he would sign it as soon as it got to his desk.

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

Earnings:

Canadian Western Bank 4Q

Goodfood Market 4Q

Economic Indicators (ET):

0830 Nov November estimates of production of principal field crops

0830 Nov Labour Force Survey

Stocks to Watch:

Advantage Energy: 2023 Cap Program to Be Focused on Prudent Cash Flow Per Shr Growth via High Rate-of-Return Development Drilling Into Existing Infrastructure; Top-Line Production Planned to Grow by 11%; All Free Cash Flow Will Remain Allocated to Shr Buyback Program; Sees 2023 Average Production 59,000-62,500 BOE/D

Advantage Energy Sees Annual Production Growing by at Least 10% in Each of Next Three Years, Exceeding 75,000 BOE/D by 2025; Expects Cash Used in Investing Activities to Remain Between C$250M and C$300M a Year; Will Plan to Renew Normal Course Issuer Bid in April; Additional Substantial Issuer Bids May Be Required to Achieve Net Debt Target

Advantage Energy Expects to Not Be Subject to Cash Taxes Until 2024 Due to More Than C$1B in High-Quality Tax Pools; Plans to Drill About 26 Net Wells Annually to Achieve Growth Targets

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AutoCanada Acquires Ontario-Based Dealership Sterling Honda; Acquired Dealership Generates More Than C$65M in Annual Revenue; Transaction to Be Funded From Drawdown of Credit Facility; Transaction Expected to Be Accretive to 2022 Earnings

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Theratechnologies: Decided to Pause the Enrollment of Patients in Phase 1 Clinical Trial of TH1902; Voluntarily Made the Decision to Pause Enrollment and Revisit the Study Design After Consulting With Investigators; Efficacy Results Observed Thus Far Were Not Convincing Enough to Pursue Enrolling Patients and Did Not Outweigh the Adverse Events Seen in Some Patients

Expected Major Events for Friday

00:01/UK: Nov BRC-Sensormatic IQ Footfall Monitor

07:00/GER: Oct Foreign trade price indices

07:00/GER: Oct Foreign Trade

07:45/FRA: Oct Industrial production index

09:30/UK: 3Q Bank of England external business stats

13:30/CAN: Nov November estimates of production of principal field crops

13:30/CAN: Nov Labour Force Survey

13:30/US: Nov U.S. Employment Report

All times in GMT. Powered by Onclusive and Dow Jones.

Expected Earnings for Friday

Canadian Western Bank (CWB.T) is expected to report $0.79 for 4Q.

Cracker Barrel Old Country Store Inc (CBRL) is expected to report $1.13 for 1Q.

Ford Motor Company (F) is expected to report.

Friedman Industries (FRD) is expected to report for 2Q.

Genesco Inc (GCO) is expected to report for 3Q.

Kirkland's Inc (KIRK) is expected to report $-0.19 for 3Q.

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ANALYST RATINGS ACTIONS

Ally Financial Inc Cut to Underweight From Equal-Weight by Morgan Stanley

B&G Foods Cut to Underweight From Equal-Weight by Consumer Edge Research

BioXcel Therapeutics Raised to Neutral From Sell by Goldman Sachs

Capital One Cut to Underweight From Equal-Weight by Morgan Stanley

CrowdStrike Holdings Cut to Peer Perform From Outperform by Wolfe Research

G-III Apparel Cut to Neutral From Buy by CL King

G-III Apparel Cut to Neutral From Overweight by Piper Sandler

Hubbell Cut to Underperform From Peer Perform by Wolfe Research

Lennox Raised to Overweight From Equal-Weight by Wells Fargo

Leslie's Cut to Hold From Buy by Stifel

Navient Raised to Equal-Weight From Underweight by Morgan Stanley

Oncocyte Cut to Hold From Buy by Lake Street

Oncorus Cut to Neutral From Buy by Chardan Capital

ONE Gas Cut to Sell From Neutral by Guggenheim

Otis Worldwide Cut to Equal-Weight From Overweight by Barclays

Parsons Cut to Underperform From Neutral by B of A Securities

Regal Rexnord Cut to Peer Perform From Outperform by Wolfe Research

Regions Financial Raised to Outperform From Peer Perform by Wolfe Research

Saia Cut to Underperform From Neutral by B of A Securities

Sirius XM Cut to Sell From Buy by Citigroup

SpartanNash Raised to Buy From Neutral by Northcoast Research

SQZ Biotechnologies Cut to Underperform From Buy by B of A Securities

Synchrony Financial Cut to Underweight From Equal-Weight by Morgan Stanley

US Bancorp Cut to Peer Perform From Outperform by Wolfe Research

Vertiv Holdings Raised to Outperform From Peer Perform by Wolfe Research

Victoria's Secret Cut to Neutral From Overweight by JP Morgan

Vontier Cut to Peer Perform From Outperform by Wolfe Research

Zebra Cut to Underperform From Peer Perform by Wolfe Research

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

(END) Dow Jones Newswires

December 02, 2022 06:20 ET (11:20 GMT)

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