U.S. Housing Starts for September; Johnson & Johnson 3Q
results; Procter & Gamble 1Q results.
Stock futures ticked up ahead of a slew of earnings that
investors will parse for insight into how companies are faring with
inflation and supply-chain disruptions.
A spate of companies are due to report quarterly earnings ahead
of the market open, including Johnson & Johnson, Bank of New
York Mellon, Travelers, Procter & Gamble and Philip Morris
International. Netflix will report earnings after the closing
Investors are using earnings and companies' guidance for the
future to assess how corporations are faring with a number of
issues. Inflation is expected to be stickier than originally
anticipated by central-bank officials, exacerbated by continued
supply-chain disruptions, higher energy costs and labor
About 81% of S&P 500 companies that have reported so far
have beat earnings-per-share expectations, according to FactSet
data through early Monday.
"It is a market now where you're going to see more
differentiation because it is a more challenging environment," said
Daniel Morris, chief market strategist at BNP Paribas Asset
Management. "If you look at earnings so far, ex-financials, it's
been very good."
U.S. housing starts, which are due at 8:30 a.m. ET, are expected
to have moderated in September. Builders have been caught between
strong demand from buyers-spurred in part by low interest rates-and
shortages of materials, labor and lots.
The dollar fell broadly, with the DXY dollar index dropping 0.4%
to a three-week low of 93.5850, as risk appetite improves and amid
uncertainty over whether U.S. President Joe Biden will give Federal
Reserve Chairman Jerome Powell a second term, MUFG said.
Although Powell remains favorite to keep the job, questionable
trading activities by two Fed bank presidents cast a cloud over his
prospects, The Wall Street Journal reported last week.
"The decision does not appear as much as a done deal as before
which has increased uncertainty and downside risks for the U.S.
dollar," MUFG currency analyst Lee Hardman said. He added that
recent dollar weakness has coincided with a rebound in global
Bitcoin's dollar value edged up 1.3% from its 5 p.m. ET level
Monday, trading at $62,258.17 Tuesday. The U.S.'s first bitcoin
exchange-traded fund will start trading Tuesday under the ticker
symbol BITO. Cryptocurrency analysts say they will be watching to
see how strong flows into the fund are, to assess whether the
cryptocurrency's recent price rally will hold.
The Bank of England could start raising interest rates in
November but the pound is still likely to depreciate in coming
months, MUFG Bank said.
"GBP is more likely to weaken heading into year-end given the
more challenging backdrop of slowing global growth, higher
inflation and tightening liquidity conditions, which should be less
supportive for risk assets and high beta currencies like the
pound," MUFG currency analyst Lee Hardman said.
BOE policy tightening could also be viewed as a policy mistake
if the U.K. economy slows more notably, which would dent sterling,
Inflation pressures are persistent but are likely to ease, said
BlackRock, which doesn't consider the current situation as
The asset manager keeps its moderately pro-risk investment
stance on a tactical basis, even as it sees a narrower path for
risk assets to rise.
It attributes inflationary pressures to the economic restart
after the pandemic rather than to rising energy prices and it
expects the near-term supply-demand imbalances to ease.
"We see the restart price pressures eventually resolving
themselves, and believe central banks with credible policy
frameworks will look through most of them," BlackRock said.
J.P.Morgan expects the European Central Bank's monetary policy
meeting on Oct. 28 to provide some clarity on the form of monetary
policy accommodation for the era after the Pandemic Emergency
Purchase Programme, said rates strategists Fabio Bassi and Sampathh
Vijay. In the short term, European rates will face uncertainty
around the Bank of England's delivery in early November, they
However, JPM remains confident in fading the amount of excessive
tightening expectations that are currently priced at the short end
of the EUR curve. Eurozone government bonds sold off heavily
Monday, causing yields to rise, amid inflation fears and some
spillover from U.K. rate-rise expectations, but yields trade lower
Oil prices were higher, with both benchmarks paring most of
their gentle Monday losses that came with the news of a fall in U.S
industrial production and weaker GDP numbers out of China according
to ING's Warren Patterson.
Markets were generally calm Tuesday, though investors are
awaiting the release of the API's weekly inventory figures later in
the day and the EIA's inventory data due Wednesday.
Benchmark European gas prices were down 2.3% after a volatile
Monday during which worries that Russian producers won't follow
through with more supply caused temporary price spikes.
Gold gained as the dollar slipped and investors worry about the
impact of the energy crunch on inflation. Expectations that central
banks will raise interest rates to tamp down inflation are keeping
the precious metal in check, said TD Securities.
However, investors are likely overestimating how quickly the Fed
will move to raise rates. The Fed is likely to look through
inflation driven by the energy shock, they said. "This suggests
gold is an ideal hedge against rising stagflationary winds, and
reasons to own the yellow metal are growing more compelling," the
Copper prices rose on a weaker dollar and worries about supply
disruptions in major producer Peru. A Peruvian community said
they'd block a key road used by mining companies in protest over
pollution and poverty.
Analysts said that even without those disruptions, the
background for copper is bullish. Inventories are dwindling while
demand remains strong, said Anna Stablum, at the brokerage Marex.
"Focus was still on the tightening of spreads as traders scrambled
to get hold of available metals and scrap markets were tight," she
TODAY'S TOP HEADLINES
Ericsson Net Profit Beats Despite China Sales Drop and
Ericsson AB on Tuesday posted a third-quarter net profit that
beat expectations, as strong sales of 5G equipment in North
America, Europe and Latin America helped offset a hefty sales
decline in mainland China.
The telecommunications-equipment company reported second-quarter
net profit attributable to shareholders of 5.75 billion kronor
($665 million) compared with SEK5.35 billion for the year-earlier
Read More ->
App Deal Highlights a Push to Lure Workers Back Into Offices
Real-estate software and data firm VTS has agreed to acquire an
app company that aims to simplify office life as more workers are
heading back to their desks.
VTS, whose primary business is providing online tools to
landlords for managing leases and tenant data, said it is buying
Toronto-based Lane Technologies Inc. The price is about $200
million, according to people familiar with the matter, making it
one of the largest proptech acquisitions ever.
Read More ->
BHP First-Quarter Iron Ore, Copper Output Falls
BHP Group Ltd. produced less iron ore, copper and steelmaking
coal in its first fiscal quarter mostly because of planned
maintenance work at its operations.
The world's biggest mining company by market value said it
produced 63.3 million metric tons of iron ore in the three months
through September, down 4% year-over-year and 3% lower than the
quarter immediately prior.
Read More ->
Chip-Designer Arm Sees Chip Shortage Lasting Through Next
The boss of chip-design specialist Arm Holdings says the
semiconductor shortage will persist through next year, joining the
growing list of executives forecasting that crippling supply
pressures won't disappear soon.
"What we're seeing from our licensees is that they could all be
selling more, if only...there was more capacity to go around.
Everyone is seeing huge demand," Arm Chief Executive Simon Segars
said Monday at The Wall Street Journal's Tech Live conference.
Read More ->
J&J Used Lenient Bankruptcy Rules to Push Talc Liabilities
Johnson & Johnson used the lenient venue-selection rules of
U.S. bankruptcy law to push tens of thousands of talc-related
cancer claims to its bankruptcy court of choice, roughly 600 miles
south of the company's New Jersey headquarters.
The New Brunswick, N.J consumer goods giant follows other
companies and nonprofits that have filed chapter 11 cases in venues
far from their headquarters to weather lawsuits over harmful
products or other alleged wrongdoing. Known as forum-shopping, the
strategy of steering chapter 11 cases to specific courts feeds the
perception that bankruptcy rules tilt the playing field in favor of
large institutions, according to some scholars.
Read More ->
Microsoft Xbox Chief Sees Game-Buying Spree Continuing
Microsoft isn't done with its acquisition spree in gaming as it
looks for more companies to help make content for its popular Xbox,
the software giant's gaming chief said.
"We're always out there looking for people who we think would be
a good match and teams that would be a good match with our
strategy, so we're definitely not done," Phil Spencer, Microsoft's
executive vice president of gaming, said at The Wall Street
Journal's Tech Live conference Monday.
Read More ->
'CoComelon' Owner Moonbug Weighs Sale, IPO
Moonbug Entertainment Ltd., the company behind the hit
children's show "CoComelon," is looking to cash in on its
popularity by either selling itself or going public, according to
people familiar with the matter.
"CoComelon," with its lilting nursery rhymes on subjects like
putting on shoes, has been a breakout hit of the Covid-19 pandemic,
with busy parents parking their children in front of the TV to sing
along with computer-generated toddlers. It became even more popular
when Netflix Inc. in July struck a deal to launch a spinoff of the
series for three seasons.
Read More ->
Reddit Seeking More Individual Investors to Participate in Its
Reddit Inc. is considering ways to make its share offering more
accessible to individual investors as it plans to go public, Chief
Executive Steve Huffman said.
Mr. Huffman the market is evolving in a way that makes it easier
for even small investors to buy into new offerings, he said at The
Wall Street Journal's Tech Live conference Monday. It is often
difficult for individual investors to buy into hot initial public
Read More ->
U.S. Lawmakers Step Up Pressure to Adopt Tougher Tech Laws
WASHINGTON-Legislation to curb the influence of big technology
companies, including putting new restrictions on online content, is
starting to gain traction in Congress as lawmakers narrow their
targets and seek to build on public attention.
A bipartisan group of senators including Amy Klobuchar (D.,
Minn.) and Chuck Grassley (R., Iowa) came out last week in favor of
legislation that would prohibit dominant platforms from favoring
their own products or services, boosting similar efforts already
under way in the House.
Read More ->
Yellen Says Debt-Limit Deal Will Keep Government Funded Through
Treasury Secretary Janet Yellen on Monday said the debt-limit
deal enacted by Congress last week will allow the government to
keep paying its bills through Dec. 3.
In a letter to Capitol Hill leaders, Ms. Yellen said the deal
"provides only a temporary reprieve" and urged lawmakers to take
further action to ensure that the government can continue to borrow
Read More ->
Behind the Energy Crisis: Fossil Fuel Investment Drops, and
Renewables Aren't Ready
An energy price shock is serving as a reminder of the world's
continued dependency on fossil fuels-even amid efforts to shift to
renewable sources of energy.
Demand for oil, coal and natural gas has skyrocketed world-wide
in recent weeks as unusual weather conditions and resurgent
economies emerging from the pandemic combine to create energy
shortages from China to Brazil to the U.K.
Read More ->
Global Climate Finance Falling Short of What Is Needed, Report
Global investment in climate-change-related projects rose in
2019 and 2020, but remained far below the level that would be
needed to finance the transition to a low-carbon economy and
minimize the impacts of climate change, new data showed.
The Climate Policy Initiative, a nonprofit research group that
publishes a survey of climate finance every two years, identified
$623 billion of climate-related investment in 2019 and $640 billion
in 2020. Those were record figures, but growth has slowed,
according to the CPI. It monitors a broad spectrum of public and
private spending, spanning areas such as electric-car purchases and
Read More ->
SEC's GameStop Report Questions 'Game-Like' Trading Apps
WASHINGTON-A trading frenzy in shares of GameStop Corp. earlier
this year should lead regulators to consider whether "game-like"
brokerage apps are encouraging investors to trade too much, the
Securities and Exchange Commission said on Monday.
The highly anticipated SEC report attributed the episode
primarily to a rapid increase in trading by individual investors,
many of whom used social-media platforms like Redditto swap ideas
and strategies. The agency poured cold water on a number of
alternative hypotheses for why the struggling videogame retailer's
share price soared from less than $20 at the end of 2020 to an
intraday high of $483 on Jan. 28.
Read More ->
North Korea Fires Ballistic Missile off East Coast, South Korea
SEOUL-North Korea launched a ballistic missile off its east
coast Tuesday, Seoul's military said, in what is Pyongyang's fifth
weapons test in recent weeks.
The weapon was fired at 10:17 a.m. local time from the Sinpo
area in North Korea's South Hamgyong province, according to Seoul's
military. The distance flown and altitude were not immediately
known. South Korea is closely monitoring the situation with the
U.S., Seoul's military said, while maintaining military
Read More ->
Biden Administration to Constrain Use of Sanctions in
WASHINGTON-The Biden administration plans to limit the use of
economic and financial sanctions in a shift that Treasury
Department officials said should strengthen the impact of a tactic
that U.S. foreign policy has relied on in recent years.
After a nine-month Treasury-led audit of sanctions policy, the
officials said Monday that sanctions will remain a critical policy
tool but need to be better calibrated. To that end, the officials
said, the interagency vetting process for sanctions will be
refocused to more heavily weigh the potential for unintended harm
to vulnerable groups, resistance from allies and other economic and
Read More ->
FDA Nearing Approval for Mixing and Matching Covid-19 Booster
The Food and Drug Administration is moving to soon allow people
to receive booster shots that are different from their first
Covid-19 vaccine doses, people familiar with the matter said.
The FDA won't recommend any booster over the others but will
permit people to get a booster shot that is different from the shot
they first received, one of the people familiar with the matter
Read More ->
Donald Trump Sues to Prevent Records From Being Disclosed to
Jan. 6 Committee
WASHINGTON-Former President Donald Trump filed suit Monday to
block records from his time in the White House from being turned
over to the House committee investigating the Jan. 6 assault on the
In a lawsuit filed in federal court in Washington, D.C., an
attorney representing the former president asked a federal judge to
stop the National Archives from turning over records from Mr.
Trump's time in office to Capitol Hill investigators, alleging that
the requests were improper and the documents contained privileged
Read More ->
Write to firstname.lastname@example.org
TODAY IN CANADA
Canadian Natl Railway (CNR.T) 3Q
Economic Indicators (ET):
Nothing major scheduled
Stocks to Watch:
Invesco Suddenly Pulls Its Bitcoin ETF Application --
The Bitcoin ETF race just got a little less crowded.
Invesco, which appeared just days away from launching an
exchange-traded fund that would track Bitcoin futures, pulled its
application on Monday.
Given that the Securities and Exchange Commission had not
objected to the application, it was expected to start trading as
soon as Wednesday. Invesco, which oversees $1.5 trillion in assets,
was expected to be a major player in the market once its ETF
"We have determined not to pursue the launch of a Bitcoin
futures ETF in the immediate near-term; however we will continue to
work in partnership with Galaxy Digital to offer investors full
shelf of products with exposure to this transformative asset class,
including pursuing a physically backed, digital asset ETF," the
company said in a statement.
ProShares, another fund provider, is ready to list the first
U.S.-traded Bitcoin ETF on Tuesday after the SEC declined to object
to its filing.
Invesco's latest filing had included a slightly different set of
investments than ProShares. The company had said it would invest in
futures, but also might invest in other Bitcon-related assets,
including Canadian ETFs that hold Bitcoin itself and the Grayscale
Bitcoin Investment Trust (ticker: GBTC), a closed-end fund provided
by digital asset manager Grayscale.
Bank of Canada Survey Finds Widespread Hiring, Investment
Businesses in Canada say they are planning to increase their
investments and hire staff as they deal with continued supply-chain
disruptions and labor shortages, a Bank of Canada survey found.
The central bank's quarterly business outlook survey, released
Monday, found companies' domestic and foreign sales prospects
remained strong in the late summer, with businesses that provide
in-person services expecting to benefit from easing Covid-19
restrictions and pent-up consumer demand. However, some businesses
said continuing supply constraints could limit their future
"To meet demand and alleviate capacity constraints, most
businesses plan to increase their capital expenditures and staffing
levels over the next year," the bank said in a report detailing the
Businesses said supply-chain disruptions have worsened since the
previous quarter and are expected to continue until the second half
of 2022, the survey found, longer than previously anticipated. A
growing proportion of companies also said that labor shortages are
preventing them from meeting growing demand, compared with prior
North American Companies Register More Bonds, Equity to Sell in
U.S. and Canadian companies registered more debt and equity to
sell in the markets in September, CUSIP Global Services said
Monday. Requests for corporate CUSIP codes, which are akin to
serial numbers for securities, climbed 3.3% in September compared
with the previous month, said CUSIP, which registers the codes. On
a year-over-year basis, corporate CUSIP requests were up by
Bank of Canada Could Raise Rates in July 2022 On Business
Optimism, Inflation Worries
The results of the Bank of Canada's latest business outlook
survey could help convince policy makers to raise interest rates a
little sooner than anticipated, Desjardins Securities chief
economist Jimmy Jean says. Jean says the firm now expects an
initial, post-pandemic rate increase in July 2022, about three
months ahead of its earlier forecast. The business outlook survey
showed widespread confidence and higher expectations for inflation
and wage growth, Jean said. He also pointed to remarks from Gov.
Tiff Macklem last week, which he said suggest the central bank's
tolerance for high inflation has limits.
Expected Major Events for Tuesday
11:45/US: Weekly Chain Store Sales Index
12:30/US: Sep New Residential Construction - Housing Starts and
12:55/US: 10/16 Johnson Redbook Retail Sales Index
18:00/US: Sep Monthly Treasury Statement of Receipts &
Outlays of the U.S. Govt
20:30/US: 10/15 API Weekly Statistical Bulletin
23:01/UK: Sep Scottish Retail Sales Monitor
23:50/JPN: Sep Provisional Trade Statistics for the Month
All times in GMT. Powered by Kantar Media and Dow Jones.
Expected Earnings for Tuesday
AmeriServ Financial Inc (ASRV) is expected to report for 3Q.
Bank First Corp (BFC) is expected to report $1.42 for 3Q.
Bank of New York Mellon Corp (BK) is expected to report $1.01
CCUR Holdings Inc (CCUR) is expected to report for 4Q.
Cambridge Bancorp (CATC) is expected to report $1.83 for 3Q.
Canadian National Railway Co (CNI,CNR.T) is expected to report
$1.42 for 3Q.
Century Bancorp (CNBKA,CNBKB) is expected to report for 3Q.
Commerce Bancshares Inc (CBSH) is expected to report $0.99 for
Dover Corp (DOV) is expected to report $1.67 for 3Q.
Equity BancShares Inc (EQBK) is expected to report $0.72 for
FTI Consulting (FCN) is expected to report $1.49 for 4Q.
Fifth Third Bancorp (FITB) is expected to report $0.91 for
First Midwest Bancorp (FMBI) is expected to report $0.42 for
Halliburton Co (HAL) is expected to report $0.28 for 3Q.
Hingham Institution for Savings (HIFS) is expected to report for
Intuitive Surgical Inc (ISRG) is expected to report $0.88 for
Iridium Communications Inc (IRDM) is expected to report $-0.02
Johnson & Johnson (JNJ) is expected to report $2.31 for
Kansas City Southern (KSU) is expected to report $2.02 for
MainStreet Bancshares Inc (MNSB) is expected to report $0.55 for
Manhattan Bridge Capital (LOAN) is expected to report $0.11 for
ManpowerGroup (MAN) is expected to report $1.91 for 3Q.
Mercantile Bank Corp (MBWM) is expected to report $0.85 for
Mueller Industries (MLI) is expected to report for 3Q.
NanoViricides Inc (NNVC) is expected to report for 4Q.
Netflix Inc (NFLX) is expected to report $2.57 for 3Q.
Ocwen Financial Corp (OCN) is expected to report for 3Q.
Old National Bancorp (ONB) is expected to report $0.36 for
OrganiGram Holdings Inc (OGI,OGI.T) is expected to report $-0.04
Philip Morris International (PM) is expected to report $1.57 for
Procter & Gamble (PG) is expected to report $1.59 for
Signature Bank (SBNY) is expected to report $3.72 for 3Q.
Silvergate Capital Corp (SI) is expected to report for 3Q.
Synchrony Financial (SYF) is expected to report $1.44 for
Synovus Financial (SNV) is expected to report $1.08 for 3Q.
TSR (TSRI) is expected to report for 1Q.
The Travelers Companies (TRV) is expected to report $2.09 for
United Airlines Holdings Inc (UAL) is expected to report $-0.81
United Bancorp Inc (UBCP) is expected to report $0.26 for
WD 40 (WDFC) is expected to report $1.16 for 4Q.
Powered by Kantar Media and Dow Jones.
ANALYST RATINGS ACTIONS
Antero Resources Raised to Buy From Neutral by Mizuho
Apple Hospitality REIT Cut to Underweight From Equal-Weight by
Avaya Holdings Cut to Neutral From Overweight by JP Morgan
CatchMark Timber Trust Cut to Underperform From Outperform by
Consolidated Edison Cut to Underperform From Neutral by B of A
Contura Energy Raised to Buy From Neutral by Mizuho
Corteva Cut to Hold From Buy by Loop Capital
DexCom Cut to Neutral From Buy by Guggenheim
Disney Cut to Equal-Weight From Overweight by Barclays
Dow Cut to Underperform From Peer Perform by Wolfe Research
Five9 Raised to Overweight From Equal-Weight by Morgan
Fortune Brands Raised to Outperform From Sector Perform by RBC
Goosehead Insurance Cut to Underperform From Neutral by B of A
Hersha Hospitality Raised to Overweight From Equal-Weight by
Host Hotels & Resorts Raised to Equal-Weight From
Underweight by Wells Fargo
Infinera Cut to Underweight From Neutral by JP Morgan
Latch Cut to Neutral From Buy by Goldman Sachs
Martin Marietta Raised to Buy From Neutral by DA Davidson
NetApp Cut to Sell From Neutral by Goldman Sachs
Occidental Petroleum Raised to Buy From Hold by Truist
Ocular Therapeutix Is Maintained at Strong Buy by Raymond
Park Hotels & Resorts Cut to Equal-Weight From Overweight by
PTC Therapeutics Cut to Underperform From Neutral by B of A
Public Storage Raised to Outperform From Peer Perform by Wolfe
Service Properties Trust Cut to Underweight From Equal-Weight by
Snap Is Maintained at Outperform by Credit Suisse
Steel Dynamics Cut to Equal-Weight From Overweight by Morgan
Summit Materials Cut to Sector Perform From Outperform by RBC
Upstart Holdings Cut to Underperform From Neutral by B of A
US Steel Cut to Underweight From Overweight by Morgan
Virgin Galactic Cut to Sell From Neutral by UBS
Vulcan Materials Raised to Buy From Neutral by DA Davidson
Westlake Chemical Raised to Buy From Neutral by B of A
Williams Cos Is Maintained at Strong Buy by Raymond James
This article is a text version of a Wall Street Journal
newsletter published earlier today.
(END) Dow Jones Newswires
October 19, 2021 06:12 ET (10:12 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.