Watch For:

Trade for October; Revised Productivity & Costs for 3Q; Canada Trade for October

Opening Call:

Stock futures pointed to a second day of gains on Tuesday, as investors continued to focus on the latest news on the Omicron variant of coronavirus.

Traders seem to be taking the view expressed by Dr. Anthony Fauci that early indications about Omicron are that it's less dangerous than the delta variant.

Further good news on the virus came as GlaxoSmithKline said that new preclinical studies demonstrated that its sotrovimab antibody retains activity the variant.

"Part of the recovery is no doubt due to growing optimism about the omicron variant, which may be extremely contagious but doesn't seem to be extremely dangerous," said Marshall Gittler, head of investment research at BDSwiss Holding.

Also buoying sentiment was China's decision on Monday to lower reserve requirements for banks.

More concerning to traders, however, is Russia's buildup of troops along the border of Ukraine. President Biden is due to hold a video call on Tuesday with Russian President Vladimir Putin.

On the corporate front, Intel shares surged in premarket trade on a plan to list shares in its Mobileye self-driving-car unit.


EUR/USD was flat even as the dollar weakened on reduced safe-haven demand after early hospital data from South Africa suggested Omicron could result in less severe illness than previous waves.

ING said the euro's role as a funding currency limits its scope to rise versus the dollar as investors return to risky assets following an easing of concerns about Omicron, said ING.

"With the eurozone growth outlook already partly compromised by restrictions in Germany and other eurozone countries, and the European Central Bank sticking to a broadly dovish tone, the euro may be facing more pressure regardless of Omicron-related sentiment," said ING, adding EUR/USD could re-test 1.1200 this week.

The Bank of England is likely to hold off on raising interest rates at its Dec. 16 meeting but that won't have a material impact on sterling, said Commerzbank.

"The current coronavirus situation and the uncertainty in this context make a rate hike in December seem increasingly unlikely," said Commerzbank currency analyst You-Na Park-Heger. However, this is largely priced in by the market so sterling could stabilize at current levels for now, she said.


Morgan Stanley Wealth Management estimates the 10-year Treasury yield will rise to 2.1% by December 2022, given forecasts for strong growth, receding but above-normal inflation and the Fed's patience over interest-rate hikes.

It attributes most of the expected upward move to 10-year real yields resetting to -0.30% from -1.06%, as inflation breakeven rates have likely peaked.


Crude futures rose more than 2% in Europe as fears over the impact of the Omicron variant eased and as Iranian oil seems unlikely to reach the market any time soon.

According to Commerzbank, prices are continuing their recovery after an almost 5% rebound on Monday, with Omicron appearing to be less severe than the previously dominant variant. "If this is confirmed, the effects on oil demand are likely to be far less severe than suggested by the dramatic collapse in price."

As far as Iran goes, Commerzbank said it expect U.S. sanctions to remain in place still for quite a while after last week's talks.

Gold gained ground as the dollar weakened. Oanda said the precious metal may consolidate in a $1,750-$1,800 trading range on growing optimism over Omicron.




Intel to List Shares in Mobileye Unit

Intel Corp. is planning to publicly list shares in its Mobileye self-driving-car unit, the latest move by Chief Executive Pat Gelsinger to revive the semiconductor giant's fortunes.

Intel said it would take the unit public in the U.S. in mid-2022 through an initial public offering of new Mobileye stock. The move, earlier reported by The Wall Street Journal, could value Mobileye at north of $50 billion, according to people familiar with the matter.


Glaxo Says Its Covid-19 Antibody Drug Works Against Omicron

GlaxoSmithKline PLC and Vir Biotechnology Inc. said their Covid-19 antibody treatment retained effectiveness against the Omicron variant in laboratory studies, even as early data suggests that similar treatments work less well against the highly mutated strain.

The results provide hope that at least one monoclonal antibody therapy-a form of treatment that has proven useful in blunting severe disease-will remain effective against Omicron, which has been detected in dozens of countries including the U.S. since it was identified by scientists in South Africa two weeks ago.


Elon Musk Comes Out Against Federal Electric-Vehicle Spending

Elon Musk took aim at a signature Biden administration legislative proposal and said China is adjusting to its growing position as a dominant world power in an interview with The Wall Street Journal.

The Tesla Inc. chief executive criticized federal efforts meant to spur electric-vehicle adoption, including a bill that would boost incentives for buying battery-powered cars.


Instagram Unveils Tools to Keep Teens Safe, Including Parental Controls

Instagram unveiled a raft of new features on Tuesday that it said will make its site safer for teenagers.

Among the measures, the popular photo-sharing service will be implementing tools to help users take breaks, or view new topics if they've been dwelling on one thing for too long, said Instagram head Adam Mosseri in a blog post.


Omicron Sends Bank Stocks Seesawing

Fears about the economic impact of the new Covid-19 variant have hit bank stocks hard, but they are still on track for their best year in more than two decades.

The KBW Nasdaq Bank Index, which measures the performance of big lenders including JPMorgan Chase & Co. and Bank of America Corp., was up nearly 44% in 2021 before Thanksgiving. At that rate, the KBW far outpaced the gains in the broader S&P 500 index, which was up about 25%.


Europe Tops China in Spawning $1 Billion Tech Startups

BRUSSELS-Europe has overtaken China in creating billion-dollar tech startups, according to a new analysis that points to Europe's rising status in the field and the effect of Beijing's crackdown on capitalist entrepreneurialism.

Over the past year, China has reined in its most successful and freewheeling tech giants, including Alibaba Group Holding Ltd., Tencent Holdings Ltd. and Didi Global Inc., casting a chill across the whole sector. Europe, meanwhile, has attracted further investment in its expanding tech industry, particularly from U.S. funds.


SEC Opens Probe Into Tesla Involving Solar-Cell Activity

The U.S. Securities and Exchange Commission has opened an investigation into Tesla Inc. that touches at least in part on the company's solar-cell activity.

The SEC acknowledged the probe in response to a Freedom of Information Act request filed by a former Tesla employee who previously filed a complaint with the SEC, according to documents viewed by The Wall Street Journal. The person alleged in the complaint to the regulator back in 2019 that Tesla and SolarCity, the solar-cell business it acquired, failed to properly notify shareholders and the public of fire risks associated with its equipment, according to one of the documents.


Samsung Replaces CEOs, Merges Mobile and Consumer Electronics Businesses

SEOUL-Samsung Electronics Co., in a surprise move, replaced the heads of its three major business units and merged the company's mobile and consumer electronics businesses into a single unit.

The shake-up leaves two co-CEOs atop the world's largest maker of smartphones, televisions and semiconductors. Samsung has ambitious investment plans to compete against Taiwan Semiconductor Manufacturing Co. on advanced chipmaking, while striving to fend off Chinese rivals with phones and other gadgets.


Alibaba Shares Rise on Shakeup Plans, Beijing Moves

Shares of Alibaba Group Holding Ltd. are leading tech shares higher in Hong Kong, tracking gains in the company's US-listed ADRs following a business reorganization as well as fresh moves by Beijing to stimulate China's slowing economy.

Alibaba's shares were up 10% at HK$124.20 on Tuesday afternoon. The company is on pace for its biggest one-day gain in more than a year, albeit still down 47% in the year to date.


Stellantis Aims for EUR20 Bln in Additional E-Vehicle Revenue by 2030

Stellantis NV said Tuesday that it is targeting around 20 billion euros ($22.57 billion) in additional annual revenue by 2030 through a rollout of new e-vehicle platforms.

The car maker said it would target EUR4 billion in incremental annual sales by 2026, generated by software-enabled products and subscriptions, rising to EUR20 billion by the end of the decade.


Elliott Calls on SSE to Restore Investor Confidence

Elliott Advisors (UK) Ltd., one of the largest shareholders in SSE PLC, on Tuesday called for the board to restore investor confidence and continued its push for the energy company to spin off its renewables division.

The Elliott Management Corp. subsidiary, which has been pushing for the separation of SSE's renewables business from the rest of the company, said in a letter to Chairman John Manzoni that it was challenging the energy company to provide a plan to address investor concerns around its corporate governance, its ability to fund growth in the long term, and its "persistent undervaluation."


Chinese Property Stocks Rally as Beijing Signals Support for Sector

Shares of Chinese developers are broadly higher in Hong Kong on Beijing's plans to stimulate China's slowing economy, a move that could add liquidity to the country's debt-laden property sector.

Sunac China Holdings Ltd. is leading gains, rising 14% in early afternoon trade, followed by China Aoyuan Group Ltd. with a gain of 12%.


German Economic Expectations Declined in December

Economic expectations in Germany dropped in December due to the worsening of the health situation, the ZEW economic research institute said Tuesday.

The measure of economic expectations fell to 29.9 in December from 31.7 in November. Economists polled by The Wall Street Journal forecast this component at 25.0 points.


German Industrial Production Rebounded in October, Beating Forecasts

German industrial production rose in October, although supply-chain bottlenecks continue.

Total industrial output--comprising production in manufacturing, energy and construction--increased 2.8% on month in October in calendar-adjusted terms, statistics office Destatis said Tuesday. Economists polled by The Wall Street Journal had forecast a 1.0% increase.


Eurozone Economy Grew Strongly in 3Q, Confirming Second Estimate

The eurozone economy expanded at a strong pace in the third quarter, almost fully recovering the gap from the Covid-19-induced recession, but growth is expected to slow sharply in the months ahead as the boost from the reopening fades.

The eurozone's gross domestic product expanded by 2.2% from July to September compared with the prior three-month period, according to the final GDP release of the European Union's statistics agency, confirming the second estimate released on Nov. 16.


China's Exports Stay Strong as Surplus Contracts in November

BEIJING-China's exports beat market expectations in November, though the growth rate decelerated from October due to a higher base compared with the same period a year earlier.

Outbound shipments rose 22% from a year earlier in November, slowing from a 27% increase in October, the General Administration of Customs said Tuesday. The result surpassed the 16.1% growth rate expected by economists polled by The Wall Street Journal.


RBA Says Omicron Won't Derail Economic Recovery

SYDNEY-The Reserve Bank of Australia left its official cash rate steady at 0.10% at its monthly policy meeting Tuesday, indicating it will be some time before the required conditions for an increase will be in place and addressing concerns about the Omicron variant of the Covid-19 virus.

"The emergence of the Omicron strain is a new source of uncertainty, but it is not expected to derail the recovery," RBA Gov. Philip Lowe said in a statement. "The economy is expected to return to its pre-Delta path in the first half of 2022."


U.S. Weighs New Rules for All-Cash Real-Estate Deals

The real-estate sector faces the possibility of stepped-up regulatory scrutiny comparable to the controls affecting banks, as part of a U.S. push to fight money laundering and corruption.

The Treasury Department's Financial Crimes Enforcement Network, an anti-money-laundering enforcer, said Monday that it was seeking public comment on its plan to apply more scrutiny to all-cash real-estate transactions.


McConnell Says Republican Party Needs to Move Forward

WASHINGTON-Senate Minority Leader Mitch McConnell (R., Ky.) stuck to his strategy Monday of trying to move Republicans past the Donald Trump era and the contentious 2020 election even as the former president remains a force in next year's contests.

"There always are a lot of voices," Mr. McConnell said at The Wall Street Journal's CEO Council Summit, when asked about Mr. Trump's role in the midterms. Keeping his focus on recapturing the Senate, which is split 50-50, Mr. McConnell said that if he were advising Senate candidates, "I'd be talking about what this administration is doing and how do you feel about it, because the American people are looking to the future."


CIA Chief Says Intelligence Agencies Haven't Concluded Russia Will Invade Ukraine

WASHINGTON-U. S. intelligence agencies haven't concluded that Russian President Vladimir Putin will invade Ukraine, but he has assembled military forces that "could act in a very sweeping way" and may see an opportunity to move this winter, CIA Director William Burns said Monday.

"I would never underestimate President Putin's risk appetite on Ukraine, " Mr. Burns said at The Wall Street Journal's CEO Council Summit. He noted remarks Mr. Putin has made that Moscow should have significant influence over Ukraine, a neighbor.


White House Commission Weighs In on Supreme Court

WASHINGTON-A presidential commission is scheduled to vote Tuesday to approve its report on the role and operation of the Supreme Court, a final draft of which was released by the White House late Monday.

The Presidential Commission on the Supreme Court was directed to research controversies regarding the court but not to recommend specific changes, and its report is unlikely to temper the debate over the high court.


Biden to Warn Putin Off Invasion of Ukraine

WASHINGTON-President Biden spoke Monday with European allies ahead of a call with Vladimir Putin in which he will warn the Russian president not to invade Ukraine, officials said.

Mr. Biden "will make clear that there will be very real costs should Russia choose to proceed, but he will also make clear that there is an effective way forward with respect to diplomacy," a senior administration official said about the call with Mr. Putin scheduled for Tuesday.




None scheduled

Economic Indicators (ET):

0830 Oct International merchandise trade

1000 Nov Ivey Purchasing Managers Index

Stocks to Watch:

Advantage Energy: Announces 2022 Budget, Including Strategic Growth of Liquids, Gas and Midstream Assets; Cap Program Will Be Focused on Growing Adjusted Funds Flow Per Shr by Continuing to Drill High Rate-Of-Return Targets in Areas With Existing Infrastructure Capacity; Escalating Emphasis Will Be Placed on Increasing Liquids Rev and Making Infrastructure Investments That Either Expand Third-Party Processing Rev or Advance Net-Zero 2025; Expect Bank Indebtedness to Fall to Zero in the Second Half of 2022 With Significant Free Cash Flow Available to Fortify the Foundations of Business; Corporate Production Is Expected to Grow by Approximately 8%, With Total Liquids Production Expected to Grow by More Than 25%

Celestica: Enhances Its Current Credit Facility, Including an Expansion of Its Borrowing Capacity With Improved Terms


Expected Major Events for Tuesday

00:01/UK: Nov BRC-KPMG Retail Sales Monitor

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

07:00/GER: Oct Industrial Production Index

07:00/UK: Nov Halifax House Price Index

07:45/FRA: Oct Foreign trade

07:45/FRA: Oct Balance of Payments

08:59/JPN: Oct Provisional Labour Survey - Earnings, Employment & Hours Worked

10:00/GER: Dec ZEW Indicator of Economic Sentiment

12:45/US: Weekly Chain Store Sales Index

13:30/CAN: Oct International merchandise trade

13:30/US: Oct U.S. International Trade in Goods & Services

13:30/US: 3Q Revised Productivity & Costs

13:55/US: 12/04 Johnson Redbook Retail Sales Index

15:00/CAN: Nov Ivey Purchasing Managers Index

15:00/US: 3Q Quarterly Financial Report - Industry

15:00/US: 3Q Quarterly Financial Report - Retail Trade

15:00/US: Dec IBD/TIPP Economic Optimism Index

20:00/US: Oct Consumer Credit

21:30/US: 12/03 API Weekly Statistical Bulletin

23:50/JPN: Nov Bank Lending

23:50/JPN: 3Q 2nd Preliminary Quarterly GDP Estimates

23:50/JPN: Oct Balance of Payments

23:50/JPN: Nov International Transactions in Securities

23:50/JPN: 3Q Quarterly External Debt & International Investment Position

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


Expected Earnings for Tuesday

AeroVironment (AVAV) is expected to report $0.27 for 2Q.

Alico (ALCO) is expected to report $-0.48 for 4Q.

AltiGen Communications (ATGN) is expected to report for 4Q.

Amrep Corp (AXR) is expected to report for 2Q.

Avid Bioservices Inc (CDMO) is expected to report $0.02 for 2Q.

BeyondSpring Inc (BYSI) is expected to report $-0.64 for 3Q.

Casey's General Stores (CASY) is expected to report $2.88 for 2Q.

ChargePoint Holdings Inc (CHPT) is expected to report for 3Q.

Conn's (CONN) is expected to report $0.58 for 3Q.

Core & Main Inc (CNM) is expected to report for 3Q.

Couchbase Inc (BASE) is expected to report for 3Q.

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

Dave & Buster's Entertainment Inc (PLAY) is expected to report $0.13 for 3Q.

Designer Brands Inc (DBI) is expected to report for 3Q.

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

IDT Corp (IDT) is expected to report for 1Q.

Inotiv Inc (NOTV) is expected to report for 4Q.

John Wiley & Sons Inc (JWA,JWB) is expected to report $1.15 for 2Q.

Oil Dri Corporation of America (ODC) is expected to report for 1Q.

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

PagerDuty Inc (PD) is expected to report for 3Q.

Powell Industries (POWL) is expected to report $-0.05 for 4Q.

SentinelOne Inc (S) is expected to report for 3Q.

Stitch Fix Inc (SFIX) is expected to report $-0.14 for 1Q.

Techprecision Corp (TPCS) is expected to report for 2Q.

Toll Brothers (TOL) is expected to report $2.48 for 4Q.

Powered by Kantar Media and Dow Jones.



Accel Entertainment Cut to Neutral From Buy by Goldman Sachs

American Airlines Group Raised to In-Line From Underperform by Evercore ISI Group

Bank of New York Mellon Cut to Underweight From Equal-Weight by Morgan Stanley

Beacon Roofing Supply Raised to Outperform From Market Perform by Raymond James

Best Buy Raised to Buy From Hold by R5 Capital

Boston Beer Raised to Market Perform From Underperform by Cowen & Co.

Boston Properties Raised to Outperform From In-Line by Evercore ISI Group

Chewy Cut to Neutral From Outperform by Wedbush

Citigroup Cut to Equal-Weight From Overweight by Morgan Stanley

DocuSign Cut to Peer Perform From Outperform by Wolfe Research

Edwards Lifesciences Raised to Overweight From Equal-Weight by Wells Fargo

Empire State Realty Trust Cut to In-Line From Outperform by Evercore ISI Group

Facebook Raised to Hold From Reduce by HSBC

Gates Industrial Cut to Equal-Weight From Overweight by Barclays

GMS Raised to Outperform From Market Perform by Raymond James

Goldman Sachs Raised to Equal-Weight From Underweight by Morgan Stanley

Hibbett Sports Raised to Outperform From Neutral by Baird

Home Depot Raised to Outperform From Perform by Oppenheimer

Lennox Raised to Buy From Hold by Deutsche Bank

MGM Growth Properties Cut to Neutral From Outperform by Macquarie

Nevro Raised to Overweight From Equal-Weight by Wells Fargo

New York Times Cut to Peer Perform From Outperform by Wolfe Research

Petco Health & Wellness Raised to Outperform From Neutral by Wedbush

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

ResMed Raised to Outperform From Neutral by Macquarie

Shockwave Medical Raised to Overweight From Equal-Weight by Wells Fargo

Southern Co Raised to Neutral From Underperform by Mizuho

Spirit Airlines Raised to Outperform From In-Line by Evercore ISI Group

Steven Madden Raised to Overweight From Neutral by Piper Sandler

SVB Financial Raised to Overweight From Equal-Weight by Morgan Stanley

Wells Fargo Raised to Overweight From Equal-Weight by Morgan Stanley

Zscaler Cut to Underperform From Neutral by Daiwa Capital

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


(END) Dow Jones Newswires

December 07, 2021 06:01 ET (11:01 GMT)

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