MARKET WRAPS
Watch For:
Earnings from Oracle
Today's Top Headlines/Must Reads:
- Powell's Inflation Fight Is Succeeding, Raising Questions
About Rate Cuts
- When Bond Yields Dropped, the Everything Rally Kicked Off
- Here's Where Prices Are Actually Coming Down
- Why Treasury Auctions Have Wall Street on Edge
Opening Call:
Stock futures were struggling for traction on Monday as
investors looked ahead to a busy week on the economic front, with
consumer prices and the last Federal Reserve meeting of the year
ahead.
Economists expect November consumer prices, due Tuesday, will
show soft headline inflation, but a firm core reading. Producer
prices are due on Wednesday with retail sales on Thursday.
On Wednesday, Jerome Powell and his colleagues will announce the
outcome of the two-day meeting, with the central bank expected to
hold its key benchmark interest rate steady in a range of 5.25% to
5.5%.
Friday's strong jobs data could have some bearing on what Powell
has to say this week, Noteris said.
"Despite the possibility of a seasonal effect, overall, the data
tend to highlight once again the resilience and tightness of the
employment market. The release may harden the Fed's hawkish stance
and contradict the market's expectations for an early rate cut,"
Noteris added.
The European Central Bank and Bank of England will each announce
policy decisions on Thursday. A Bank of Japan decision will come
next week.
Premarket Movers
HP Inc. was upgraded to Outperform from In Line at Evercore ISI
and the price target on the stock was raised to $40 from $33.
Shares rose 1.5%.
Humana shares were up 2.3% after Cigna stepped away from a
possible merger. Cigna rose 9.6%.
Macy's rose 19% after an investor group made a $5.8 billion
offer to buy the company , in a bid to take the famed
department-store chain private after stiff competition from online
rivals took a big bite out of its value.
Nordstrom and Kohl's shares rose roughly 5%, boosted by the jump
in Macy's stock.
Paramount Global was rising 2% on reports from Puck and The New
York Times that said Shari Redstone was in talks to sell
controlling interesting in National Amusements, the parent company
of Paramount, to Skydance Media.
Pinterest was up 4.8% after shares were upgraded to Outperform
from Sector Perform at RBC Capital Markets and the price target was
boosted to $46 from $32.
Friday's Post-Close Movers
Near Intelligence voluntarily filed for Chapter 11 bankruptcy
protections and will look to sell its assets. Shares fell 38%.
Nextracker CEO disclosed Friday that he recently purchased
nearly 38,000 shares of the company at an average price of $39.63.
The stock purchase has a total value of about $1.5 million. Shares
rose 4.6%.
Forex:
The U.S. economy is expected to slip into a recession next year,
prompting the Fed to start cutting interest rates before the ECB
and causing the dollar to weaken versus the euro, LBBW Research
said.
A recession should help U.S. inflation approach the 2% mark in
2H, and "against this backdrop, the Fed is likely to initiate a
phase of interest rate cuts as early as summer 2024," it said.
LBBW expects the ECB to start cutting rates next autumn. It
expects EUR/USD to remain stable at 1.08 in 1Q and 2Q before rising
to 1.10 by the end of next year.
Danske Bank Research is looking to buy EUR/USD on any dips in
the near term due to the impact of any weaker U.S. economic
data.
"The recent significant easing of financial conditions, the most
substantial monthly decrease since the April 2020 Covid shock,
suggests a favorable environment for EUR/USD in December," Danske
Bank Research said.
"We aim to counter the recent downward move, and hence we still
see upside potential for EUR/USD in the short term."
Energy:
Oil prices rose as U.S. demand outweighed worries over weak
global growth.
Prices gained some support after the U.S. energy department said
Friday that it will refill its strategic petroleum reserve through
to May, hoping to buy 3 million barrels of crude in March.
Still, worries remain over demand, with Brent down 17% this
quarter, amid slower global growth and market skepticism over OPEC+
cuts.
"The 1.7 million barrel a day reduction in output should provide
some support to physical balances but the market will have to be
convinced before any (of) these cuts are priced in," ANZ said.
Metals:
Base metals and gold prices were sliding, with investors
awaiting key central bank meetings due later this week.
"The macro environment is a tug-of-war between the dovish Fed
and risk-on trading and lower growth/demand expectations," Peak
Trading Research said.
Investors will be looking to see how Tuesday's U.S. consumer
inflation data as well as ECB and the Fed meetings, due later in
the week, shape the macroeconomic environment, Peak said.
Weak inflation and dovish comments from the Fed should weaken
the dollar, it added.
TODAY'S TOP HEADLINES
Boeing Has a Frontrunner to Be Its Next CEO
Boeing is elevating Stephanie Pope to become its No. 2
executive, setting her up as the heir apparent to Chief Executive
David Calhoun as the plane maker prepares for its next leadership
transition.
Pope, who heads Boeing's services arm, is expected to be named
chief operating officer as soon as Monday, according to people
familiar with the matter. The three-decade Boeing veteran beat out
other top executives for the role.
New York Joins IBM, Micron in $10 Billion Chip Research
Complex
New York state is joining chip companies to invest $10 billion
in a semiconductor research facility at the University at Albany
that is set to include some of the most advanced chip-making
equipment in the world.
NY Creates, a nonprofit that oversees the Albany NanoTech
Complex where the facility is to be built, will coordinate its
construction. It will also use state funds to acquire chip-making
equipment from ASML Holding, a Dutch company whose machines can
cost hundreds of millions of dollars and are key to making the most
advanced chips possible.
A Spot Bitcoin ETF Is Easy. What Comes Next Could Get
Dangerous.
Giving fund managers easier access to bitcoin is already a
contentious topic for regulators. It is nothing next to the
Pandora's box that could be opened with its crypto peer ether.
The price of bitcoin has surged roughly 14% this past month to
around $42,000. Investors believe U.S. regulators will soon green
light exchange-traded funds, or ETFs, that hold spot bitcoins,
bringing billions of dollars into the market.
BOJ Should Raise Interest Rates Before Next Summer, Suntory CEO
Says
TOKYO-Takeshi Niinami, chief executive of beverage maker Suntory
Holdings and the head of a Japanese business lobby, called on the
Bank of Japan to raise interest rates, saying it would help boost
the Japanese economy's productivity and competitiveness.
If the Bank of Japan raises interest rates, "the Japanese
business community would be ready-which means they should raise
interest rates, both long and short," Niinami said in an interview
with The Wall Street Journal on Monday.
The Adrenaline-Fueled Trades Sweeping the Market
Oodles of risk. Bold bets on artificial intelligence.
Round-the-clock activity. The options market is booming like never
before.
About 44 million options contracts have changed hands on an
average day in 2023, on track for an annual record based on Options
Clearing Corp. data going back to 1973 and more than double the
figure from five years ago.
Majority of Americans Back Israel as Democrats Split Over War
With Hamas, WSJ Poll Finds
WASHINGTON-U.S. public opinion remains favorable toward Israel
in its war with Hamas, but just over a third of Americans say they
are equally sympathetic to both the Israeli and Palestinian people,
a new Wall Street Journal poll finds.
Fifty-five percent of those polled said they believe Israel is
taking the military action needed to defend itself and prevent
another attack by Hamas, compared with 25% of respondents who said
Israel's military action is disproportionate and going too far.
Hate Crimes in U.S. Increase Amid Israel-Hamas War
Shots fired in the parking lot of a synagogue in New York. A
6-year-old Palestinian-American boy fatally stabbed outside
Chicago. Violent assaults on people in religious and cultural
attire.
Police in major cities including Los Angeles, New York, Chicago
and San Francisco have seen a rise in reports of hateful events,
including hate crimes, after the Oct. 7 Hamas attack on Israel and
the nation's subsequent military campaign in Gaza. Jews are often
on the receiving end, according to cities that have broken down
data, while reported attacks on Muslims-which include some of the
most violent instances reported recently-are also on the rise.
Write to ina.kreutz@wsj.com
TODAY IN CANADA
Earnings:
Nothing scheduled
Economic Calendar (ET):
Nothing scheduled
Stocks to Watch:
Barrick Gold: Porgera Gold Mine in Papua New Guinea Set to
Restart Production This Month; Porgera Expected to Start Pouring
Gold Again in 1Q 2024; Reopening Follows Satisfaction of Conditions
in Porgera Project Commencement Agreement, in Which New Ownership
Structure Was Agreed; Equity in New Porgera Shared 51% by PNG
Stakeholders, Including Local Landowners and Enga Provincial Govt;
49% Is Held by Barrick Niugini, a JV Between Barrick and Zijin; BNL
Will Operate Mine; PNG Shareholders to Receive 53% of Porgera's
Economic Benefits
Expected Major Events for Monday
00:01/UK: CBI Economic Forecast
00:01/UK: Nov UK Regional PMI
00:01/UK: Dec Rightmove House Price Index
06:00/JPN: Nov Preliminary Machine Tool Orders
07:00/GER: 3Q Labour cost index
15:00/US: Nov Employment Trends Index
23:50/JPN: Nov Corporate Goods Price Index
All times in GMT. Powered by Kantar Media and Dow Jones.
Expected Earnings for Monday
Air Industries Group (AIRI) is expected to report for 3Q.
Arcimoto Inc (FUV) is expected to report for 3Q.
Blue Bird Corp (BLBD) is expected to report $0.48 for 4Q.
California First Leasing Corp (CFNB) is expected to report for
1Q.
Casey's General Stores (CASY) is expected to report $3.97 for
2Q.
Chicken Soup for the Soul Entertainment Inc (CSSE) is expected
to report $-0.77 for 3Q.
Drive Shack Inc (DSHK) is expected to report $-0.06 for 3Q.
Fluence Energy Inc (FLNC) is expected to report for 4Q.
Gelesis Holdings Inc (GLSHQ) is expected to report for 3Q.
Infinity Pharmaceuticals Inc (INFIQ) is expected to report $0.03
for 3Q.
Inotiv Inc (NOTV) is expected to report for 4Q.
National American University Holding Inc (NAUH) is expected to
report for 2Q.
Odyssey Marine Exploration Inc (OMEX) is expected to report for
3Q.
Oil Dri Corporation of America (ODC) is expected to report for
1Q.
Oracle Corp (ORCL) is expected to report $0.91 for 2Q.
OrganiGram Holdings Inc (OGI,OGI.T) is expected to report for
4Q.
SeaChange International Inc (SEAC) is expected to report for
3Q.
Sunlight Financial Holdings Inc (SUNLQ) is expected to report
for 3Q.
Williams Industrial Services Group Inc (WLMSQ) is expected to
report $-0.03 for 3Q.
Zynerba Pharmaceuticals Inc (ZYNE) is expected to report $-0.19
for 3Q.
Powered by Kantar Media and Dow Jones.
ANALYST RATINGS ACTIONS
Airbnb Cut to Hold From Buy by DBS Bank
ALX Oncology Raised to Buy From Hold by Jefferies
American Woodmark Raised to Hold From Sell by Deutsche Bank
Apple Hospitality REIT Cut to Equal-Weight From Overweight by
Wells Fargo
Azek Cut to Hold From Buy by Deutsche Bank
Beam Therapeutics Cut to Hold From Buy by Jefferies
bluebird bio Raised to Equal-Weight From Underweight by Morgan
Stanley
Broadcom Raised to Buy From Hold by Summit Insights Group
Casey's General Stores Cut to Market Perform From Outperform by
BMO Capital
Cerevel Therapeutics Cut to Market Perform From Outperform by TD
Cowen
Cintas Cut to Hold From Buy by Deutsche Bank
CleanSpark Cut to Neutral From Overweight by JP Morgan
Deckers Outdoor Cut to Neutral From Buy by Citigroup
Diamondrock Cut to Equal-Weight From Overweight by Wells
Fargo
Equifax Raised to Buy From Hold by Deutsche Bank
FactSet Research Cut to Hold From Buy by Deutsche Bank
First Solar Raised to Overweight From Equal-Weight by Morgan
Stanley
HashiCorp Cut to Market Perform From Outperform by TD Cowen
KB Home Cut to Sell From Hold by Deutsche Bank
Lam Research Cut to Equal-Weight From Overweight by Morgan
Stanley
MBIA Cut to Neutral From Buy by Roth MKM
NOV Raised to Overweight From Neutral by JP Morgan
Owens Corning Raised to Buy From Hold by Deutsche Bank
Planet Labs PBC Cut to Hold From Buy by Craig-Hallum
Pool Corp Cut to Hold From Buy by Deutsche Bank
Qorvo Raised to Overweight From Equal-Weight by Morgan
Stanley
Qualcomm Cut to Equal-Weight From Overweight by Morgan
Stanley
Riot Blockchain Raised to Neutral From Underweight by JP
Morgan
Sallie Mae Raised to Overweight From Equal-Weight by Wells
Fargo
SiteOne Landscape Supply Cut to Sell From Hold by Deutsche
Bank
Sunstone Hotel Investors Cut to Underweight From Equal-Weight by
Wells Fargo
Taylor Morrison Home Raised to Buy From Hold by Deutsche
Bank
Verisk Analytics Cut to Hold From Buy by Deutsche Bank
This article is a text version of a Wall Street Journal
newsletter published earlier today.
(END) Dow Jones Newswires
December 11, 2023 06:14 ET (11:14 GMT)
Copyright (c) 2023 Dow Jones & Company, Inc.
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