Trade for October; Revised Productivity & Costs for 3Q;
Canada Trade for October
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
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
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
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.
TODAY'S TOP HEADLINES
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
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
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
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
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
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
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.
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
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
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
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
Chinese Property Stocks Rally as Beijing Signals Support for
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
Sunac China Holdings Ltd. is leading gains, rising 14% in early
afternoon trade, followed by China Aoyuan Group Ltd. with a gain of
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
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%
Eurozone Economy Grew Strongly in 3Q, Confirming Second
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
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.
Write to firstname.lastname@example.org TODAY IN CANADA
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
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 &
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
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
BeyondSpring Inc (BYSI) is expected to report $-0.64 for 3Q.
Casey's General Stores (CASY) is expected to report $2.88 for
ChargePoint Holdings Inc (CHPT) is expected to report for
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
Oil Dri Corporation of America (ODC) is expected to report for
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
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.
ANALYST RATINGS ACTIONS
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
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
Boston Properties Raised to Outperform From In-Line by Evercore
Chewy Cut to Neutral From Outperform by Wedbush
Citigroup Cut to Equal-Weight From Overweight by Morgan
DocuSign Cut to Peer Perform From Outperform by Wolfe
Edwards Lifesciences Raised to Overweight From Equal-Weight by
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
GMS Raised to Outperform From Market Perform by Raymond
Goldman Sachs Raised to Equal-Weight From Underweight by Morgan
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
Nevro Raised to Overweight From Equal-Weight by Wells Fargo
New York Times Cut to Peer Perform From Outperform by Wolfe
Petco Health & Wellness Raised to Outperform From Neutral by
PNC Financial Cut to Underweight From Equal-Weight by Morgan
ResMed Raised to Outperform From Neutral by Macquarie
Shockwave Medical Raised to Overweight From Equal-Weight by
Southern Co Raised to Neutral From Underperform by Mizuho
Spirit Airlines Raised to Outperform From In-Line by Evercore
Steven Madden Raised to Overweight From Neutral by Piper
SVB Financial Raised to Overweight From Equal-Weight by Morgan
Wells Fargo Raised to Overweight From Equal-Weight by Morgan
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)
Copyright (c) 2021 Dow Jones & Company, Inc.
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From May 2021 to May 2022