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MARKET WRAPS

Watch For:

Trade Deficit; Consumer Credit for April; EIA Weekly Petroleum Status Report; Canada International Merchandise Trade for April; Bank of Canada Rate Decision

Today's Top Headlines/Must Reads:

- Treasury's $1 Trillion Debt Deluge Threatens Market Calm

- Why All the Recession Chatter? Let's Talk About a Slower Economy

- Lawmakers Try Again to Curb Visa, Mastercard Fees, With Broader Support

- U.S. Nears Deal to Produce GE Jet-Fighter Engine in India

Follow WSJ market coverage here

Opening Call:

Stock futures edged lower on Wednesday, weighed down by a bigger-than-expected drop in Chinese exports.

China's exports dropped 7.5% from a year ago in May, far outpacing the 1% decline expected by economists. The slowdown is the latest sign that the world's second-largest economy is contending with a fading recovery, stoking fresh concerns about global growth. Read more here .

Europe's Stoxx 600 edged down 0.2%. In mainland China, the Shanghai Composite gained 0.1%. Hong Kong's Hang Seng added 0.8%, while Japan's Nikkei 225 fell 1.8%.

Stocks to Watch

Coinbase shares have dropped sharply for two straight sessions, after it and rival Binance were both sued by the SEC. Early trading Wednesday pointed to a modest recovery, with Coinbase stock rising 2% ahead of the opening bell.

Couchbase revenue guidance for the second quarter came short of analysts' estimates. Shares fell 18% in after-hours trading.

Casey's General Stores profit and revenue declined in the fourth quarter. Shares fell 4.6% in aftermarket trading.

Cue Health said its Covid-19 molecular test has received a De Novo marketing authorization from the FDA. Shares fell 3.7% in after-hours trading.

Dave & Buster's Entertainment shares rose off-hours, after it posted profit that beat analysts' estimates.

Shopify extended its rise in extended trading. Shares had risen more than 6% Tuesday after the company completed the sale of its logistics business.

Stitch Fix gained 7.6% in premarket trading. The company reported a fiscal third-quarter loss narrower than analysts' expectations and announced more cost-cutting initiatives.

Yext rose more than 17% after the company raised its fiscal-year revenue and profit guidance.

Forex:

The dollar edged higher as traders are wary of selling the currency before inflation data due on Tuesday, despite growing speculation that the Fed could pause raising interest rates next week, ING said.

"The dollar's resilience probably denotes reluctance to add dollar shorts ahead of the U.S. CPI risk event on 13th June - which is still seen as having the potential to tilt the balance to a hike the following day."

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The Turkish lira sank to new lows against the dollar on Wednesday, as concerns mounted over challenges facing the country's new finance minister, and a report emerged that state lenders have stopped selling dollars to defend it.

Citing traders, Bloomberg reported that state lenders were no longer trying to prop up the lira with costly dollar sales, which could be a sign of the new incoming finance minister's promise of a more "rational economic policy."

The report noted that the country's state banks don't comment on market interventions. Read more here .

Read Sterling Could Fall as Higher UK Rates May Hit Economy

Energy:

Oil prices were lower for a second day in Europe, with Chinese trade data showing a slump in exports and imports and as the EIA said U.S. demand will rise at a slower pace than expected this year.

Metals:

Base metals were mixed with gold lower in early London trade, as demand concerns and macro headwinds continued to weigh and despite bright spots in commodity data coming from China, ANZ said, with imports in May beating expectations.

"The prospects of new stimulus should support commodities demand," ANZ added.

Copper M&A

Valuation remains a headwind for M&A in the North American copper industry, with building a mine still cheaper than buying one despite inflation, Citi said.

"Building a new mine is increasingly expensive (circa $30,000/ton) but still cheaper than buying (circa $45,000/ton)."

Nonetheless, history suggests strong copper prices will result in more dealmaking, according to Citi, which said investor interest in copper M&A is very high.

"The most likely target in our coverage still appears to be" First Quantum. Freeport McMoRan "is a potential consolidator, but the company message remains focused on organic opportunities."

Read Iron Ore Uptick Unlikely to Last

TODAY'S TOP HEADLINES

The Global Brands Coming to a Shopping Mall Near You

American consumers have long been renowned for their spending power. Now global retailers want a bigger slice of the action.

Once wary of America, foreign fashion brands such as Mango, Uniqlo and Zara are joining retail giants including Lego and IKEA in pursuing major U.S. expansions. Executives say they are encouraged by the country's upbeat economic prospects relative to other parts of the world, and a growing sense that American shoppers have become more receptive to new brands.

PGA Tour Deal With LIV Golf Puts Sponsors on the Spot

Sponsors and other companies affiliated with the PGA Tour will face a reckoning in the wake of the golf powerhouse's decision to combine with the Saudi-backed upstart LIV Golf, marketing executives said.

Golf sponsorship has historically offered brands from FedEx to Rolex the opportunity to reach affluent audiences for hours or days at a time via a sport that has for the most part avoided sociopolitical controversies.

German Industrial Production Rose Less Than Expected in April as Car Production Weighs

Industrial production in Germany ticked up less than expected in April, as motor-vehicle manufacturing dipped, adding to concerns about the country's key manufacturing base.

Industrial output-comprising production in manufacturing, energy and construction-rose 0.3% in April compared with the previous month on a price, seasonally and calendar-adjusted basis, from an upwardly revised 2.1% fall in March, data from the German statistics office Destatis showed Wednesday.

China's EV Juggernaut Is a Warning for the West

China rocked the auto world twice this year. First, its electric vehicles stunned Western rivals at the Shanghai auto show with their quality, features and price. Then came reports that in the first quarter of 2023 it dethroned Japan as the world's largest auto exporter.

How is China in contention to lead the world's most lucrative and prestigious consumer goods market, one long dominated by American, European, Japanese and South Korean nameplates? The answer is a unique combination of industrial policy, protectionism and homegrown competitive dynamism. Western policy makers and business leaders are better prepared for the first two than the third.

Southern Ukrainian Towns Inundated as Floodwaters From Burst Dam Rise

Floodwaters continued to rise on Wednesday after a major dam and power station in a Russian-occupied part of Ukraine were destroyed, forcing thousands of people to flee their homes and throwing a curveball on the battlefield.

The rupture on Tuesday has added another dimension to a humanitarian crisis resulting from a war that has killed tens of thousands and displaced millions. It unleashed a torrent of water that inundated dozens of towns and villages along the Dnipro River separating Russian and Ukrainian-held parts of the southern Kherson region.

Chinese, Hong Kong, Iranian Firms Sanctioned for Allegedly Aiding Iran Missile Program

The U.S. Treasury has placed sanctions on six entities and seven individuals in China, Hong Kong and Iran for allegedly helping Iran obtain technology for use in its ballistic missile program.

The Treasury's Office of Foreign Assets Control alleges that the businesses and individuals obtained component materials for some of the biggest players in Iran's ballistic missile development program. These include Iran's Ministry of Defense and Armed Forces Logistics, and affiliated groups such as Parchin Chemical Industry and P.B. Sadr, which served as an intermediary helping Parchin to acquire missile propellant, according to the Treasury.

Write to ina.kreutz@wsj.com TODAY IN CANADA

Earnings:

D2L 1Q

Dollarama 1Q

mdf commerce 4Q

Transcontinental 2Q

VersaBank 2Q

Economic Calendar (ET):

0830 Q1 Labour productivity, hourly compensation & unit labour cost

0830 Apr International merchandise trade

1000 Bank of Canada interest rate announcement

Stocks to Watch:

C21 Investments Receives Cease Trade Order Due to Delay in Filing Annual Financial Results; Filing Delayed to Allow Auditors to Address Error in Tax Provision for Prior Years; Working With Auditors to Restate 2022 Financials, Complete Audit of Statements

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Champion Iron Provides Update on Effect of Quebec Forest Fires; No Damages to Facilities; Not Aware of Any Significant Damages to Railway or Third-Party Infrastructure; Sees Services to Resume in Near-Term; Sees Material Delays in Sales of Iron Ore Produced Due to Service Interruption of Railway

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Stingray 4Q EPS C$0.06; 4Q Rev C$78.9M; 4Q Adj EPS C$0.21

Expected Major Events for Wednesday

05:00/JPN: Apr Indexes of Business Conditions - Preliminary Release

06:00/UK: May Halifax House Price Index

06:00/GER: Apr Industrial Production Index

06:45/FRA: Apr Foreign trade

06:45/FRA: Apr Balance of payments

08:00/ITA: Apr Retail Sales

08:30/UK: May Narrow money (Notes & Coin) and reserve balances

08:30/UK: 1Q Household Finance Review

11:00/US: 06/02 MBA Weekly Mortgage Applications Survey

12:30/CAN: 1Q Labour productivity, hourly compensation & unit labour cost

12:30/CAN: Apr International merchandise trade

12:30/US: Apr U.S. International Trade in Goods & Services

14:00/CAN: Bank of Canada interest rate announcement

14:00/US: May Online Help Wanted Index

14:30/US: 06/02 EIA Weekly Petroleum Status Report

19:00/US: Apr Consumer Credit

23:01/UK: May RICS Residential Market Survey

23:01/UK: May KPMG and REC UK Report on Jobs

23:50/JPN: May Bank Lending

23:50/JPN: 1Q 2nd Preliminary Quarterly GDP Estimates

23:50/JPN: May International Transactions in Securities

23:50/JPN: 1Q Quarterly External Debt & International Investment Position

23:50/JPN: Apr Balance of Payments

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Expected Earnings for Wednesday

ADF Group (DRX.T) is expected to report for 1Q.

Aceragen Inc (ACGN) is expected to report for 1Q.

Advaxis Inc (ADXS) is expected to report for 2Q.

BMTC Group Inc (GBT.T) is expected to report for 1Q.

BeyondSpring Inc (BYSI) is expected to report $-0.67 for 1Q.

Brown-Forman Corp - B Share (BFA,BFB) is expected to report $0.41 for 4Q.

Campbell Soup (CPB) is expected to report $0.63 for 3Q.

Clearday Inc (CLRD) is expected to report for 1Q.

Crown Crafts (CRWS) is expected to report for 4Q.

DXI Capital Corp (DXI.H.V) is expected to report for 1Q.

Daktronics (DAKT) is expected to report $0.14 for 4Q.

Dollarama (DLMAF,DOL.T) is expected to report $0.59 for 1Q.

GameStop Corp (GME,GMEB) is expected to report $-0.15 for 1Q.

Greif Inc - A Share (GEF,GEFB) is expected to report $1.31 for 2Q.

HashiCorp Inc (HCP) is expected to report for 1Q.

Ideanomics Inc (IDEX) is expected to report for 1Q.

J W Mays Inc (MAYS) is expected to report for 3Q.

J.Jill (JILL) is expected to report for 1Q.

Lakeland Industries (LAKE) is expected to report $0.12 for 1Q.

Lovesac Co (LOVE) is expected to report $-0.42 for 1Q.

North West Co Inc (NWC.T) is expected to report for 1Q.

Ollie's Bargain Outlet Holdings Inc (OLLI) is expected to report $0.46 for 1Q.

Oxford Industries (OXM) is expected to report $1.33 for 1Q.

Rent the Runway Inc (RENT) is expected to report for 1Q.

Royale Energy (ROYL) is expected to report for 1Q.

Semtech (SMTC) is expected to report $-0.60 for 1Q.

Silver Bull Resources Inc (SVB.T) is expected to report for 2Q.

Smartsheet Inc (SMAR) is expected to report $-0.34 for 1Q.

TVI Pacific Inc (TVI.V,TVIPF) is expected to report for 1Q.

Torrid Holdings Inc (CURV) is expected to report for 1Q.

Transcontinental Inc - Class A (TCL.A.T,TCL.B.T,TCLAF) is expected to report for 2Q.

https://urldefense.com/v3/__http://Trip.com__;!!F0Stn7g!HghTF-vSrfIQkU2eI8HTlq4DwI88FLVM11EqOVz6sNmmi0mvUd2G2TW7uimQ-y55MJO6hQ0tk7_RaGQ2wqJxzJyFcMJX7mED-3IptYpQvD0$ Group Ltd (https://urldefense.com/v3/__http://K3RD.SG__;!!F0Stn7g!HghTF-vSrfIQkU2eI8HTlq4DwI88FLVM11EqOVz6sNmmi0mvUd2G2TW7uimQ-y55MJO6hQ0tk7_RaGQ2wqJxzJyFcMJX7mED-3IpbS3JH3g$ ,TCOM) is expected to report for 1Q.

Tupperware Brands Corp (TUP) is expected to report $0.92 for 1Q.

United Natural Foods Inc (UNFI) is expected to report $0.46 for 3Q.

Vera Bradley Inc (VRA) is expected to report $-0.24 for 1Q.

Verint (VRNT) is expected to report $-0.05 for 1Q.

VersaBank (VBNK.T) is expected to report $0.34 for 2Q.

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ANALYST RATINGS ACTIONS

AMC Networks Cut to Underweight From Equal-Weight by Morgan Stanley

Amedisys Cut to Neutral From Outperform by Credit Suisse

American Electric Power Cut to Neutral From Buy by UBS

Apple Cut to Neutral From Buy by DA Davidson

AT&T Raised to Market Perform From Underperform by MoffettNathanson

Bellerophon Therapeutics Cut to Hold From Buy by Laidlaw & Co.

Cabot Corp Cut to Neutral From Overweight by JP Morgan

CenterPoint Energy Cut to Neutral From Buy by UBS

Cigna Raised to Buy From Neutral by B of A Securities

CMS Energy Raised to Buy From Neutral by UBS

Community Bank System Raised to Outperform From Market Perform by Raymond James

Dollar General Cut to Neutral From Outperform by Daiwa Capital

DTE Energy Raised to Buy From Neutral by UBS

EPAM Systems Cut to Equal-Weight From Overweight by Barclays

EPAM Systems Cut to Neutral From Buy by Citigroup

EPAM Systems Cut to Neutral From Overweight by Piper Sandler

EPAM Systems Cut to Sector Weight From Overweight by Keybanc

Lennox Raised to Overweight From Sector Weight by Keybanc

Lumen Technologies Raised to Market Perform From Underperform by Raymond James

Molson Coors Beverage Raised to Neutral From Underperform by B of A Securities

NBT Bancorp Cut to Outperform From Strong Buy by Raymond James

NiSource Raised to Buy From Neutral by UBS

Oscar Health Raised to Neutral From Underperform by B of A Securities

SiteOne Landscape Supply Raised to Buy From Hold by Truist Securities

SJW Group Cut to Neutral From Buy by UBS

Ultragenyx Pharma Raised to Outperform From In-Line by Evercore ISI Group

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

(END) Dow Jones Newswires

June 07, 2023 06:07 ET (10:07 GMT)

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