Weekly Jobless Claims; Existing Home Sales for September;
results from AT&T, Intel; OMFIF Live Broadcast with Federal
Reserve Board Governor Christopher Waller
Stock indexes were poised for muted opening losses as investors
awaited another batch of earnings reports and data on the labor
Stocks have risen in recent days, after solid earnings helping
quell concerns that sent markets lower at the start of fall. Among
those worries: A slowdown in China's economy, supply-chain
blockages that have hampered sectors such as manufacturing and
inflation pressures that could prompt central banks to withdraw
Of the 80 companies on the S&P 500 to have reported through
Wednesday, 81% had topped analysts' earnings forecasts, according
to FactSet, better than three-quarters that did so each quarter in
"We've gone through a period of hesitation that's brought a bit
of volatility but I think stocks will keep trending higher," said
Paul Jackson, head of asset allocation research at Invesco. He
expects households to keep spending savings accumulated during the
On the economic front, data due at 8:30 a.m. ET are expected to
show jobless claims remained near pandemic lows for the week ended
Oct. 16. Figures from earlier in the month show companies have been
holding on tightly to existing employees while hiring is
Existing-home sales are expected to have rebounded in September
after an August slowdown. The data are scheduled for 10 a.m.
Overseas markets were broadly lower. Shares of China Evergrande
Group slumped 13% in Hong Kong after the embattled developer
canceled plans to sell a majority stake in its property-management
unit, a setback in attempts to ease its ongoing cash crisis.
Stocks to Watch:
The supply chain challenges brought on by the pandemic have
forced CSX to leave some business on the table.
"We're clearly constrained," the railroad's CEO Jim Foote said
on an earnings call. "There was more business out there this
quarter...that we could not handle." He said the primary reason was
the labor shortage and difficulty hiring workers. That's easing a
bit and CSX thinks it will be in better shape to capitalize on
strong demand for transportation services.
HP is building its bet on peripherals as a growth engine around
booming business in gaming, video conferencing and retail point of
The peripherals business, from headsets to USB microphones and
console accessories, offers high profit margins and refresh rates,
company officials said during a conference call with analysts,
pointing to what they see as a big business opportunity with an
estimated 8.9% CAGR.
Gaming, now a more than $2 billion business for HP, offers a
significant expansion opportunity; but it's work and learn, which
includes remote and hybrid arrangements that got a pandemic
tailwind, that HP sees as posing the biggest opportunity.
Las Vegas Sands CEO Rob Goldstein said the company isn't
concerned about the Macau government's next steps on issuing casino
"We've always found the government very reasonable, very
thoughtful and very fair," Goldstein said on a call with
In September, the Macau government announced a 45-day process
for revising its gambling laws, a step toward issuing casino
licenses. The government has said it's considering increased
scrutiny and control over casino operations. The six licenses
expire in June.
Goldstein doesn't see a scenario where the company isn't
operating in Macau. "We have no trepidation...that there will be an
issue with this. We knew this was coming...and we're prepared for
it. And we're also prepared to wait until the government tells us
how they want to proceed."
Car dealership chain Lithia Motors expects consumer demand for
vehicles will remain high in the final months of the year.
"What we see in [the third quarter], we expect that to continue
to [the fourth quarter]," said CFO Tina Miller, referring to demand
for the company's products during the latest quarter.
Pinterest is rolling out a redesign of the feed that breaks the
user experience into two tabs. The browse tab retains the
platform's traditional grid layout, while the new watch tab
presents a scroll of full-screen Idea Pins, posts made up of
multiple clips and images, created by influencers.
Pinterest is trying to connect users to influencers as well as
respond to changes in how consumers want to interact with content,
said Naveen Gavini, senior vice president of products. "The whole
goal for us in the next few years and how we think about ourselves
is really like an inspiration-to-realization platform," Gavini
Tesla CFO Zachary Kirkhorn said the first vehicles from the new
plants near Austin and Berlin shouldn't be expected to make it into
customer hands this year.
The company still aims to have production at the sites starting
before year end, but beginning deliveries will take a bit longer,
including for regulatory reasons and to ensure a certain level of
production quality. How fast production can ramp up also is
uncertain, he said. "There is quite an execution challenge ahead of
The dollar was slightly higher in Europe and Morgan Stanley said
it stands to benefit from higher oil prices.
Forex strategist James Lord said the currency used to have a
negative relationship with oil prices when the U.S. was a big
energy importer but that is no longer the case, as the country has
become self-sufficient. The prospect of the Federal Reserve taking
action in response to energy-led price pressures will also support
the dollar, Lord said.
"The Fed is quite sensitive to inflation and inflation
expectations at the moment so I think as oil prices go up, it will
put more pressure on the Fed to sound more hawkish compared to
other central banks."
Recent weakness in havens such as the yen and the dollar may be
limited by renewed concerns about Evergrande after the sale of its
property-management unit was abandoned. This has increased pressure
on Evergrande to raise cash elsewhere, as the 30-day grace period
on some of its interest payments comes to an end this week, said
Bank of America said ahead of the next FOMC meeting in November,
at which the start of bond tapering is expected to be announced,
"we expect the USD to be supported and the U.S. to continue to act
as the main driver of global FX market." BofA said previous sharp
rises in global yields during the June 2013 taper tantrum,
September 2019's money-market squeeze and June's hawkish FOMC
meeting were bullish for the dollar.
However, Ebury said the dollar should weaken over the next year
even though the Federal Reserve could start tapering asset
purchases as soon as November and raise interest rates in the
second half of 2022.
Analysts at the London-based financial services firm said the
dollar has continued to benefit from concerns about coronavirus and
rising inflation pressures slowing the global recovery but these
worries are perhaps "slightly overblown." Market sentiment will
"take a turn for the better," especially once developing nations
have rolled out vaccines to a larger share of their populations,
Ebury expects EUR/USD to rise to 1.22 and GBP/USD to rise to
1.45 by the end of 2022.
Treasury yields remained elevated, with the 10-year note yield
holding at a five-month high following Wednesday's 20-year auction
and the Beige Book report, which indicated the U.S. economy was
growing at a "modest to moderate rate" amid a low supply of workers
and elevated prices.
Bond investors are particularly attuned to the prospects of a
potentially faster pace of Fed tapering, which would suggest that
the central bank may be inclined to raise interest rates faster
than expected to quell intensifying pricing pressures.
Pimco expects bonds to continue to provide diversification
benefits in terms of overall asset allocation.
"While return expectations should be muted across asset classes,
there are states of the world in which bonds could outperform
equities--especially on the basis of return per unit of
A period of high inflation is not Pimco's baseline outlook,
nonetheless. It remains of the view that Treasury
inflation-protected securities, or TIPS, commodities and other real
assets make sense to help hedge against inflation risks.
"Although we see upside risks to interest rates over the short
term as economies continue to recover, over the secular horizon we
expect rates to remain relatively range-bound, enabling lower but
positive returns for core bond allocations."
Oil futures were lower in Europe, giving back the modest gains
made Wednesday after the EIA released bullish weekly data,
according to ING's Warren Patterson.
Crude stocks at the key distribution hub of Cushing, which was
in danger of running out of storage space last spring, are now at
their lowest since 2018.
"Continued strength in oil prices means that pressure on OPEC+
to pump more will only grow," Patterson said. He said that while
the U.S., India and Japan have all called for more crude, "the
reluctance of OPEC+ to pump more in the short term suggests that
oil prices will remain well supported...this year."
Gold prices were flat, with the precious metal caught between a
stronger dollar and investors' concerns about stagflation.
Concerns about rising inflation and flagging growth could keep
the metal-supported in the coming months, said Giovanni Staunovo, a
strategist at UBS. "Inflation expectations are rising and growth
expectations softening for the short run." He added, however, that
stagnation concerns will likely be short-lived as the Fed is likely
to raise rates.
UBS expects gold prices to edge down to $1,700 an ounce by the
end of the first quarter of next year, falling to $1,600 an ounce
by the end of 2022.
TODAY'S TOP HEADLINES
China Evergrande Calls Off Plans to Sell Key Unit for $2.6
SINGAPORE-China Evergrande Group called off plans to sell a
majority stake in its property-management unit for the equivalent
of $2.6 billion, a major setback in the real-estate giant's
attempts to ease its liquidity crunch.
The cash-strapped developer said Wednesday that it had planned
to sell 50.1% of the profitable subsidiary, Evergrande Property
Services Group Ltd., to a unit of rival developer Hopson
Development Holdings Ltd.
Read More ->
Barclays Profit Rises on Investment Banking
Barclays PLC said its net profit more than doubled in the third
quarter, driven by a continued strong performance at its investment
Read More ->
Amazon Employee Group Seeks Worker Vote on Unionization
An Amazon.com Inc. employee group formed by warehouse workers in
New York's Staten Island announced its goal to vote on
unionization, becoming the latest labor-organizing effort from
workers at one of the nation's largest employers.
The independent group of Amazon employees, called the Amazon
Labor Union, plans to file with the National Labor Relations Board
on Oct. 25 for an election. The organizing involves more than 2,000
workers across four Amazon facilities in Staten Island who have
signed on to the effort, according to a statement from the
Read More ->
WeWork Set to Go Public via SPAC Deal, Two Years After Failed
The shared-office company WeWork is set to trade publicly
Thursday, capping a journey to a listing that included the
implosion of its initial public offering in 2019.
WeWork is going public through a combination with BowX
Acquisition Corp., a special-purpose acquisition company.
Read More ->
Plaid Pushes Into Payments Business After Scuttled Visa Deal
Financial-technology startup Plaid Inc. is making a move into
the payments business, less than a year after an antitrust lawsuit
scuttled its high-price sale to Visa Inc.
Plaid makes software that allows banks and other fintech
companies to plug into their users' financial accounts, with their
permission, and access their financial data to look up account
balances or authenticate personal financial details. Plaid plans to
unveil a new program Thursday that will use the software to make it
easier and cheaper for consumers and businesses to make digital
payments funded by their bank accounts.
Read More ->
China's Modern Land Withdraws Debt Extension Request on
Modern Land (China) Co. has withdrawn its plan seeking
permission from its debtholders to allow the Chinese property
developer to delay repaying a $250 million bond, citing liquidity
The company, which along with many Chinese developers are facing
financial stress, said late Wednesday that it is in talks to engage
a financial adviser to help assess Modern Land's capital structure,
liquidity profile and financial condition.
Read More ->
PayPal's Vision Board Comes Into Focus With Pinterest
Enough with the idle pinning. PayPal Holdings might be hoping it
can inspire Pinterest's users to start spending real money.
Read More ->
Trump's New Social-Media Company Plans to Go Public via SPAC
Former President Donald Trump unveiled a new digital-media
venture Wednesday and said it would go public by merging with a
special-purpose acquisition company.
Trump Media & Technology Group will create a social network
called Truth Social to fight such companies as Facebook Inc. and
Twitter Inc., the Trump company said in a press release late
Wednesday. Mr. Trump's access to several social-media platforms was
restricted following the Jan. 6 assault on the U.S. Capitol.
Read More ->
Moderna and J&J Covid-19 Boosters, Mixing and Matching
Authorized by the FDA
U.S. health regulators significantly widened the nation's
Covid-19 booster campaign, clearing use of extra doses of Moderna
Inc. and Johnson & Johnson vaccines and also saying people can
get a shot that is different from what they had previously
The moves, announced by the Food and Drug Administration on
Wednesday, will make boosters available to the majority of adults
who have been fully vaccinated and have passed the recommended
Read More ->
Elliott Management Has Large Position in Canadian National
Activist investor Elliott Management Corp. has a big stake in
Canadian National Railway Co., people familiar with the matter
said, adding to pressure on the railroad after its CEO resigned
following a failed bid for rival Kansas City Southern.
Canadian National, facing a proxy fight from another activist,
TCI Fund Management Ltd., said Tuesday Chief Executive Jean-Jacques
Ruest is stepping down. TCI is seeking four board seats in a vote
set to take place early next year.
Read More ->
Chinese Developer Defaults Pile Up as Evergrande Contagion
HONG KONG-The pain is spreading in the market for Chinese junk
Dollar-bond defaults from Chinese property developers are rising
quickly as the country's housing market slumps, and the problem
could worsen as a wave of debt from the beleaguered industry comes
due in the coming months.
Read More ->
Tight Labor Market Keeps Jobless Claims Near Pandemic Lows
Unemployment claims are trending near the lowest levels since
the Covid-19 pandemic hit in the spring of 2020, as companies are
reluctant to lay off workers amid labor shortages.
Economists surveyed by The Wall Street Journal estimate jobless
claims ticked up to 300,000 last week from a pandemic low of
293,000 a week earlier. Claims, a proxy for layoffs, are holding
well below a recent peak of 424,000 in mid-July but remain above
2019's weekly average of 218,000.
Read More ->
Crypto Miners Struggle to Cut Carbon Emissions
Bitcoin mining has earned a bad reputation for guzzling cheap
electricity in the pursuit of profit. Now bitcoin miners are trying
to go green, to a point.
Companies that mine bitcoin are aiming to power their computers
with renewable energy or sign up for data centers that rely on the
sun or wind. Falling prices for renewables and rising prices for
bitcoin make it possible to still earn a profit.
Read More ->
Critics Blast Private Equity at Senate Hearing
At a Senate hearing Wednesday, private-equity critics denounced
what they characterized as buyout managers' abusive practices, as
some Democratic lawmakers seek to rein in the rapidly growing
Sen. Elizabeth Warren (D., Mass.) led the hearing of the U.S.
Senate Committee on Banking, Housing and Urban Affairs, at which
workers, an academic and a state treasurer loosed volleys of
criticism against private-equity managers and asked lawmakers to
increase federal oversight of them.
Read More ->
Trump Organization Faces Another New York Criminal Probe After
Local prosecutors are investigating financial dealings at a
Trump Organization golf course north of New York City, according to
people familiar with the matter, compounding the legal pressure on
former President Donald Trump's company, which is already under
The criminal investigation, conducted by the office of
Westchester County District Attorney Miriam Rocah, a Democrat, is
examining whether the Trump Organization made misrepresentations to
local officials related to the valuation of Trump National Golf
Club, a private course in Briarcliff Manor, N.Y., the people
familiar with the matter said. The Westchester district attorney's
office has subpoenaed information about the course, the people
Read More ->
Write to firstname.lastname@example.org TODAY IN CANADA
Precision Drilling 3Q
Rogers Commun 3Q
Score Media and Gaming 4Q
Economic Indicators (ET):
0830 Sep New Housing Price Index
0830 Aug Employment Insurance
Bank of Canada May Need to Start Raising Policy Rate
Aggressively: Bank of Nova Scotia economists expect Canadian core
inflation to rise well above the Bank of Canada's 2% target next
year and in 2023, which would prompt aggressive rate increases
starting in July 2022.
The bank said inflationary pressure from supply-chain
bottlenecks have been underestimated. Scotiabank also expects
inflationary pressure on the wage front, due to acute labor
shortages, and in real estate, given shortage of housing units in
Scotiabank anticipates BOC will raise its policy rate by a full
percentage point in 2H 2022, to reach 1.25%, and another full
percentage point for all of 2023, to 2.25%. "If inflation rises
more rapidly than we expect, we may need to forecast an earlier
tightening," Scotiabank said.
Expected Major Events for Thursday
05:00/JPN: Sep Supermarket sales
06:00/JPN: Sep Revised Machine Tool Orders
06:00/UK: Sep Public sector finances
06:45/FRA: Oct Monthly business survey (goods-producing
08:00/ITA: Aug Industrial turnover & orders
10:00/FRA: 2Q OECD Quarterly Employment Situation
10:00/UK: Oct CBI Industrial Trends Survey
12:30/US: Oct Philadelphia Fed Business Outlook Survey
12:30/CAN: Sep New Housing Price Index
12:30/CAN: Aug Employment Insurance
12:30/US: 10/16 Unemployment Insurance Weekly Claims Report -
12:30/US: U.S. Weekly Export Sales
13:00/RUS: Weekly International Reserves
13:45/US: Bloomberg Consumer Comfort Index
14:00/US: Sep Leading Indicators
14:00/US: Sep Existing Home Sales
14:30/US: 10/15 EIA Weekly Natural Gas Storage Report
20:30/US: Foreign Central Bank Holdings
20:30/US: Federal Discount Window Borrowings
23:01/UK: Oct UK Consumer Confidence Survey
23:30/JPN: Sep CPI (Nation), CPI ex-Food (Nation)
All times in GMT. Powered by Kantar Media and Dow Jones.
Expected Earnings for Thursday
AT&T Inc (T) is expected to report $0.64 for 3Q.
Alaska Air Group Inc (ALK) is expected to report $1.41 for
Ally Financial Inc (ALLY) is expected to report $1.94 for
AutoNation (AN) is expected to report $4.21 for 3Q.
Banc Of California Inc (BANC) is expected to report $0.13 for
Brainstorm Cell Therapeutics Inc (BCLI) is expected to report
$-0.20 for 3Q.
Bryn Mawr Bank Corp (BMTC) is expected to report $0.71 for
Chart Industries Inc (GTLS) is expected to report $0.81 for
City Holding Co (CHCO) is expected to report $1.24 for 3Q.
Dow Inc (DOW) is expected to report $2.54 for 3Q.
East West Bancorp (EWBC) is expected to report $1.51 for 3Q.
First American Financial (FAF) is expected to report $1.84 for
Freeport-McMoRan Inc (FCX) is expected to report $0.81 for
Gatx Corp (GATX) is expected to report $1.09 for 3Q.
Genuine Parts Company (GPC) is expected to report $1.64 for
Herc Holdings Inc (HRI) is expected to report $2.33 for 3Q.
Heritage Financial Corp (HFWA) is expected to report $0.52 for
Home BancShares Inc (HOMB) is expected to report $0.44 for
IQVIA Holdings Inc (IQV) is expected to report $1.06 for 3Q.
Insteel Industries (IIIN) is expected to report $0.98 for
Interpublic Group of Cos (IPG) is expected to report $0.46 for
J.W. Mays Inc (MAYS) is expected to report for 4Q.
KeyCorp (KEY) is expected to report $0.57 for 3Q.
Lindsay Corp (LNN) is expected to report $0.79 for 4Q.
NVR Inc (NVR) is expected to report $88.77 for 3Q.
Nucor Corp (NUE) is expected to report $7.14 for 3Q.
Precision Drilling (PD.T,PDS) is expected to report for 3Q.
Quest Diagnostics (DGX) is expected to report $2.69 for 3Q.
Rogers Communications Inc - Class B (RCI,RCI.A.T,RCI.B.T) is
expected to report $1.04 for 3Q.
S&T Bancorp Inc (STBA) is expected to report $0.63 for
Sandy Spring Bancorp Inc (SASR) is expected to report $1.10 for
Schnitzer Steel Industries Inc (SCHN) is expected to report
$1.48 for 4Q.
Snap-On Inc (SNA) is expected to report $3.33 for 3Q.
Southwest Airlines (LUV) is expected to report $-0.12 for
Tractor Supply Company (TSCO) is expected to report $1.68 for
Tri Pointe Homes Inc (TPH) is expected to report $0.88 for
Trinity Industries (TRN) is expected to report $0.18 for 3Q.
Union Pacific (UNP) is expected to report $2.52 for 3Q.
Valero Energy Corp (VLO) is expected to report $0.91 for 3Q.
Webster Financial Corporation (WBS) is expected to report $1.05
Powered by Kantar Media and Dow Jones.
ANALYST RATINGS ACTIONS
Array Technologies Cut to Underweight From Equal-Weight by
Clearwater Paper Corporation Raised to Outperform From Sector
Perform by RBC Capital
Healthcare Services Cut to Market Perform From Outperform by
This article is a text version of a Wall Street Journal
newsletter published earlier today.
(END) Dow Jones Newswires
October 21, 2021 05:53 ET (09:53 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.