MARKET WRAPS
Watch For:
EU flash estimate euro area inflation, PPI; Italy provisional
CPI; trading updates from Sodexo, Norwegian Air, Finnair
Opening Call:
European shares look poised to open lower ahead of eurozone
inflation data and the U.S. jobs report. Asian stock benchmarks
were mixed; the dollar and Treasury yields were steady; oil futures
rose and gold edged higher.
Equities:
Stock futures fell early Friday ahead of a number of economic
data releases on the docket, including eurozone inflation and the
U.S. jobs report.
A fresh batch of U.S. labor-market data on Thursday sparked
renewed concerns about the Federal Reserve's monetary-tightening
path in 2024.
"Short- and long-term interest rates rose modestly following the
releases, due to that belief that the Federal Reserve may hold off
on cutting rates in the short term if the labor market remains
strong," said Sam Millette, fixed income director at Commonwealth
Financial Network.
"With that being said all eyes will be on [Friday's] nonfarm
payrolls report to see if headline job figures in December follow a
similar pattern to ADP and initial claims."
Meanwhile, markets will look to eurozone inflation and producer
prices to consider whether the recent trend of cooling prices will
be enough for the European Central Bank to signal cuts to interest
rates.
Forex:
There's potential for upcoming U.S. economic data to be more
subdued, said Fawad Razaqzada, market analyst at City Index and
FOREX.com. The greenback could easily resume its weakness again, as
the Fed has made it clear that rates might be cut at least three
times this year, he added.
Bonds:
Treasury yields were little changed in Asia after ending at
their highest levels in weeks overnight following data showing the
U.S. labor market continued to remain solid.
"Several labor-market indicators from [Thursday] looked
favorable, particularly with respect to the layoff side of things,"
said economist Daniel Silver of JPMorgan Chase & Co.
"These reports don't give us a particularly reliable signal
about the BLS data that will be released [Friday], but they seem to
suggest that job growth has continued at a solid rate lately,"
Silver said.
Energy:
Oil futures rose in Asia, rebounding following declines
overnight. WTI crude oil fell more than 1% to as low as $71.14/bbl,
while Brent crude oil dropped to an intraday low of $76.58/bbl,
said TD Securities, noting EIA data released Thursday spurred
concerns that U.S. demand is on the slide.
Metals:
Gold edged higher early Friday, and is likely to be supported by
Fed rate-cut hopes. The precious metal is expected to rise further,
as USD and Treasury yields fall in anticipation that the Fed will
begin cutting rates as early as March, ICICI Direct Research
said.
Also, worries over slower global economic growth and escalating
geopolitical tensions in the Middle East may continue to make gold
valuable as a hedge against uncertainties, ICICI added.
-
Copper prices gained, but the metal is entering the off-peak
season for consumption, Huatai Futures said. The upward momentum
for copper will likely be limited due to the recent rebound in the
U.S. dollar, Huatai said. Investors are waiting for more signals on
supply from copper mines.
-
Iron-ore prices declined amid a possible technical correction
after climbing to multimonth highs. The recent rally in iron-ore
prices has been driven by the prospect of more property-easing
measures in China, Donghai Futures said.
Steel mills have reduced production significantly due to poor
profits, weighing on iron-ore demand. However, the mills' winter
replenishment needs might provide some support on the demand side,
Donghai said. Meanwhile, soaring iron-ore prices could trigger
regulatory risks again, it added.
TODAY'S TOP HEADLINES
Markets Moving in Lockstep Threaten to Make for a Trying
2024
Some investors hold that as goes January, so goes the year. The
performance so far-with the S&P 500 down 1.7% by Thursday's
close-doesn't hold out great hope. But the first three trading days
of the year offered a useful run-through of three of the ways that
inflation and the economy affect your portfolio.
The year started the way the last one ended, with all the focus
on the Fed and inflation, only in the opposite direction.
What to Watch in the Jobs Report: Slower Hiring Adds to Case for
Soft Landing
The December employment report will show the labor market
continued to cool but still added jobs at a solid pace as
unemployment remained low, analysts estimate.
U.K. Economy Faces Mounting Uncertainties in 2024
The only certainty in 2024 could be uncertainty for the British
economy, still reeling from sky-high inflation and rapidly rising
interest rates, and gearing up for a general-election.
Indeed, the U.K. is probably the macroeconomic environment where
uncertainty is the highest, according to Julien Lafargue, chief
market strategist at Barclays Private Bank.
Islamic State Claims Responsibility for Deadly Bomb Attack at
Soleimani Memorial
Islamic State militants claimed responsibility Thursday for a
pair of bombings that killed dozens of people a day earlier in the
largest attack in Iran since the country's 1979 Islamic Revolution,
dispelling suspicions that Israel might have been behind the attack
amid worries of a broadening regional conflagration.
The blasts took place with the Middle East on edge because of
the war in Gaza between Israel and Hamas-an Islamist militant group
that has moved closer to Iran in recent years-and increasing
tensions between the U.S. and Israel on one side and other
Iranian-backed militant groups in Lebanon, Syria, Iraq and Yemen on
the other.
Supermarket Giant Drops Pepsi and Lay's Over Price Increases
One of the world's biggest supermarket chains said it would drop
several PepsiCo products to protest what it called unacceptable
price increases, a rare public standoff between a grocer and food
maker after more than two years of rising prices.
Carrefour, which operates thousands of stores across more than
30 countries, said it would stop selling Pepsi, Doritos and other
products in France, Italy, Spain and Belgium. A spokesman for the
French company said Thursday that it had decided to add notes to
store shelves to explain the changes to customers.
Amer Sports files initial public offering with 21 underwriters
and $3.5 billion in 2022 revenue
Amer Sports Inc. on Thursday filed its initial public offering
with plans to trade on the New York Stock Exchange under the symbol
AS, five years after it was acquired by a Chinese consortium for
about $5 billion.
The Helsinki, Finland-based company is going public with 21
underwriters including Goldman Sachs, BofA Securities, JPMorgan and
Morgan Stanley as joint book-running managers, in a sign of a large
deal.
Octopus Energy Has Texas-Size Ambitions
The U.K.'s largest electricity provider is powering its
Texas-size energy ambitions with an Uber-like approach to renewable
retailing.
Octopus Energy Group, a British energy conglomerate, entered the
U.S. market through its acquisition of Houston and Silicon
Valley-based startup Evolve Energy for $5 million in 2020. Now,
Octopus is ramping up its Texas focus, using its
renewable-energy-management system to offer cheaper prices to
customers that have agreed to allow the platform to shift their
demand from times of shortage to when there is abundant supply.
Walgreens' stock turns sharply lower after dividend halved to
bolster cash flow
Shares of Walgreens Boots Alliance Inc. pulled a sharp U-turn
into negative territory Thursday, after the drugstore chain nearly
halved its dividend to bolster cash flows and provided a downbeat
outlook on consumer spending.
The company lowered its quarterly dividend to 25 cents a share
from 48 cents a share, with shareholders of record on Feb. 20
receiving the new dividend on March 12.
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Expected Major Events for Friday
00:01/UK: Dec BRC-Sensormatic IQ Footfall Monitor
05:30/NED: Dec Flash Estimate CPI
07:00/GER: Nov Retail Trade
07:00/DEN: Nov Unemployment
07:00/UK: Dec Halifax House Price Index
07:00/UK: 4Q Halifax House Price Index: UK Regional Breakdown
quarterly release
07:30/HUN: Nov PPI
07:30/HUN: Nov Employment & unemployment
08:00/AUT: Dec Wholesale Price Index
08:30/EU: Dec EuroCOIN indicator of euro area economic
activity
09:00/UK: Dec UK monthly car registrations figures
09:00/ITA: 3Q General Govt Quarterly Accounts
09:00/ICE: Dec External trade, preliminary figures
09:30/UK: Dec S&P Global UK Construction PMI
10:00/ITA: Dec Provisional CPI
10:00/ITA: Dec Cities CPI
10:00/EU: Nov PPI
10:00/EU: Dec Flash Estimate euro area inflation
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(END) Dow Jones Newswires
January 05, 2024 00:16 ET (05:16 GMT)
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