Bank of Canada Rate Decision; EIA Weekly Petroleum Status
Stocks were poised for modest gains at the opening bell,
potentially pushing the S&P 500 toward record territory, on
optimism that the economic impact of Omicron will be less drastic
than first feared.
"The markets generally-if you look back in 2021-they have looked
through any of the episodes of even partial lockdowns or that kind
of risk," said Willem Sels, chief investment officer for private
banking and wealth at HSBC. "They assume vaccines would be
effective or partially effective."
Mr. Sels expects more volatility. "I think we're going to get a
lot of flip-flopping," he said, pointing to an uncertain outlook
for inflation and the potential for mixed economic data next
Global markets got another boost this week from Beijing's moves
to stimulate the slowing Chinese economy. Investors remain on edge,
however, about the Federal Reserve's plans to tighten monetary
policy to tap the brakes on inflation in 2022.
One reason why some investors expect inflation to persist is the
tight labor market. More evidence of hiring difficulties is
expected to emerge with the U.S. job openings and labor-turnover
survey, due at 10 a.m. ET. Economists forecast that the data will
show employers had more than 10 million unfilled positions in
Stocks to Watch:
As prices for battery metals surge, Fitch expects auto makers
world-wide will look to cushion the blow for consumers. It thinks
global EV sales will climb 40% in 2022 as demand continues to be
fueled by decarbonization efforts. However, EV adoption could
stumble in countries that don't give consumers incentives, such as
tax credits, to make the switch to electric. That makes them
vulnerable to further increases in already higher purchase costs of
EVs relative to traditional vehicles.
Fitch reckons auto makers could try to offset that by rolling
out mild and plug-in hybrid models for lower-income markets. It
expects Asia, Europe and North America to remain the dominant EV
markets over 2021-30, while developing countries keep lagging
The dollar dipped in Europe, but UniCredit said positive
sentiment, as reflected in strong global stock market gains hasn't
weakened the buck as much as it has in the past, as the currency
becomes less appealing as a safe haven.
"This represents an important change, which is mostly caused by
the increased importance of higher interest rates in the U.S. and
widening interest rate differentials with respect to the rest of
the world in driving the FX market."
Fitch said global interest rates may rise sooner than expected
as inflation risk looms. "The scale and longevity of the global
inflation shock has taken most forecasters and central banks by
surprise and is bringing forward the start of global monetary
It now expects the Fed to raise interest rates in September 2022
and the Bank of England to do so later this month. It also thinks
China's central bank will cut interest rates in 2022, but reckons
the European Central Bank will hold rates steady through 2023.
Goldman Sachs said China could cut its reserve requirement ratio
again in the first quarter of 2022. This would imply a total of
three RRR cuts including the July and December reductions, which is
on the lower end of historical precedents. It noted the 2015-2016
downturn saw five rounds of RRR cuts in total.
"Policymakers appear to be in the 'do just enough' mentality in
managing the balance between cyclical growth and structural
reforms," said Goldman Sachs. It said a first-quarter timing seems
likely because large numbers of USD bonds are due in January and
March, so there could be greater financial risks then.
Bitcoin was down 2.1%, but Swissquote Bank analyst Ipek
Ozkardeskaya said the recent improvement in market sentiment isn't
fully reflected in risk-sensitive cryptocurrencies.
"I believe that's because the latest 20% dive has wiped out a
good amount of leveraged positions and it will take a bit more time
to restore the risk appetite. But Bitcoin is consolidating above
the $50K mark, and the downside risks have reduced after a large
amount of leverage positions have been cleared."
Treasury yields edged down after Tuesday's gains, with investors
looking ahead to next week's Fed meeting.
Returns on government debt still remain relatively low, though,
considering the Fed is likely to announce a plan next week for
faster tapering of its monthly bond purchases to combat surging
inflation. The Fed's next policy gathering is set for Dec. 14-15
and policy makers are in a media blackout period until then.
"We continue to look for higher yields ahead of the Fed taper
between now and in early 2022," wrote Tom di Galoma, managing
director of Treasurys trading at Seaport Global Holdings, in a
Oil prices nudged higher after strong early week gains. "Around
two thirds of the previous price slide has been corrected, a
downswing that had been brought about by demand concerns sparked by
the new Omicron variant," said Commerzbank.
And while concerns over the newly-discovered strain appear to be
overstated and investors wait for a more solid assessment on
potential risks, the market also focuses on growing fears of a
Russian invasion of Ukraine.
European natural-gas prices rose after news reports that Nord
Stream 2 could be shut down if Russia invades Ukraine. The
controversial pipeline linking Russia and Germany had been expected
to start operations in 2022, helping to ease Europe's gas
Gold edged higher, helped by a slightly weaker dollar. According
to Commerzbank, the precious metal is currently benefiting from
escalating Russia, Ukraine tensions. Analysts at the bank expect
prices to move moderately until Friday, when the inflation data for
November is released.
TODAY'S TOP HEADLINES
Instagram Head Faces Senate Hearing on Potential Dangers for
WASHINGTON-Instagram's top executive is set to appear Wednesday
before a Senate panel investigating possible harm to young people
using the photo-sharing app and what its parent company knew.
Instagram head Adam Mosseri is expected to face questioning from
the Senate Commerce Committee's consumer-protection panel on
internal company research showing the app can worsen body-image
issues for some girls. Disclosure of the research in The Wall
Street Journal's Facebook Files series prompted several previous
China Evergrande Heads Toward Default as It Misses Payment
China Evergrande Group didn't make payments due on some U.S.
dollar bonds before a final deadline expired on Monday, people
familiar with the matter said, potentially setting the stage for a
massive default and one of the country's largest-ever debt
The giant property developer had been teetering on the brink of
failure for months after amassing more than $300 billion in
liabilities. Last Friday, Evergrande sought help from the
government of its home province of Guangdong, which agreed to send
a working group to assess and help sort out the company's issues.
The development was regarded by analysts as the start of a managed
restructuring of Evergrande, and a prelude to a default by the
Chinese Social-Media Giant Weibo Drops in Hong Kong Market
Shares in Weibo Corp. began trading in Hong Kong on Wednesday,
demonstrating the pull of the Asia financial hub as an alternative
venue for Chinese companies whose stocks are already trading in the
Weibo, which operates a Twitter-like microblogging platform in
China, has been listed on the Nasdaq Stock Market since 2014. It
raised the equivalent of $385 million from its Hong Kong share sale
ahead of the secondary listing.
Trafigura Scores $3 Billion Profit on Commodities Rebound
Trading house Trafigura Group Pte. Ltd. rode rising commodity
prices to post record profit, making it a big winner from the
pandemic economic rebound.
Trafigura reported $3.1 billion in net profit on $231.3 billion
in revenue in the 12 months through September. Wednesday's results
made the 2021 financial year the most profitable for the company
since it was founded in 1993.
Supply-Chain Problems Will Last Through 2023, Intel Chief
The supply-chain problems rippling across the U.S. economy are
improving for some companies, but long-term fixes might take much
longer, the heads of Intel Corp., Wayfair Inc. and Accenture PLC
said at The Wall Street Journal CEO Council Summit on Tuesday.
"The bottom was this past summer, but it's recovering slowly,"
said Niraj Shah, chief executive officer and co-founder of online
Facebook Parent to Allow Employees to Delay Return to
The parent company of Facebook said Tuesday it will fully reopen
its U.S. offices at the end of January, but will give workers a
chance to delay their scheduled return as late as June.
Meta Platforms Inc.'s new "office deferral program" is designed
to give employees flexibility in coming back to offices and
determining how they work, a spokesman said. The company previously
offered most of its employees the option to work remotely
BlackRock to Pull $2 Trillion in Assets From State Street
BlackRock Inc. is pulling some $2 trillion of assets out of
State Street Corp.'s safekeeping, a move that will reduce the
investing firm's reliance on a small number of parties and lower
the fees it pays for back-office work.
For more than a decade, State Street served as the sole
custodian to BlackRock's U.S. exchange-traded funds-low-cost
investment vehicles that have exploded in popularity in recent
years. State Street services all of the roughly $2.3 trillion
across those BlackRock funds.
Weibo Shares Fall in Hong Kong Trading Debut
Shares of Chinese social-media company Weibo Corp. fell in their
trading debut in Hong Kong on Wednesday morning amid a challenging
environment for Chinese technology stocks.
Shares of the Beijing-based company dropped as much as 7.2%
compared with its offering price of HK$272.80. They were last down
6.2% at HK$256.00.
Wynn Names Gambling-Industry Executive as CFO
Wynn Resorts Ltd. appointed a gambling-industry veteran to
oversee the casino operator's finances just weeks after the company
announced it would elevate its finance chief to the role of chief
Las Vegas-based Wynn on Tuesday said Julie Cameron-Doe would
join in the second quarter of next year. Ms. Cameron-Doe has served
as chief financial officer of Aristocrat Leisure Ltd., a Sydney,
Australia-based gambling-machine maker, since 2018.
Facebook's Head of Messenger to Leave Company Next Year
The person overseeing Facebook's Messenger said he would leave
the company next year, the latest executive to disclose departure
plans from the social-media platform.
Stan Chudnovsky, who has been running Messenger since 2018, said
he'll step down in the second quarter of next year. The 51-year old
said he has no plans to retire, but that he'll take a break after
"working nonstop" since he was 16.
Giant Gap Persists Between Job Openings and Available
U.S. job openings continue to far outpace the number of
available workers, with nearly five million more open positions
than people seeking work.
There are around 11 million job openings in the U.S., according
to estimates from job-search site ZipRecruiter, based on their
analysis of online job postings and government data sources. That
compares with 6.9 million people who are unemployed but say they
want to work.
Crypto CEOs to Testify Before Lawmakers Weighing Greater
WASHINGTON-The chief executive officers of half a dozen
cryptocurrency firms are set to appear before Congress on
Wednesday, as lawmakers and regulators wrestle with how to bring
the more than $2 trillion market under government oversight.
The House Financial Services Committee, led by Rep. Maxine
Waters (D., Calif.), called the hearing in hopes of improving
lawmakers' understanding of crypto assets and how the sector fits
into existing regulations.
Turkey's Woes Haven't Spread to Broader Emerging Markets
The world's biggest emerging markets have dodged contagion from
Turkey's currency implosion, but there are other threats looming on
Emerging markets such as Russia, Mexico and Brazil are
notoriously volatile and prone to getting hit when one of them
wobbles. So far, however, Turkey's problems have been contained. An
unorthodox series of rate increases has plunged its economy into a
spiral without causing much damage elsewhere.
Japan's Economy Shrank More Than Estimated in Third Quarter
Japan's economy shrank more than initially estimated in the
July-September quarter due to weaker spending by consumers and the
government, revised data showed Wednesday.
The world's third-largest economy after the U.S. and China
contracted 3.6% on an annualized basis, which reflects what would
happen if the third-quarter pace continued for a full year.
House Votes to Approve Bill Setting Up Process for Lifting Debt
WASHINGTON-Top Republicans and Democrats struck a deal for a
process to raise the debt ceiling in the Senate, with the House
passing a bill late Tuesday that paves the way for Congress to
prevent a calamitous default.
The bill, which also prevents cuts to Medicare and other
programs that threatened to kick in at the end of the year, is the
product of weeks of talks between Senate Majority Leader Chuck
Schumer (D., N.Y.) and Senate Minority Leader Mitch McConnell (R.,
Ky.). It doesn't itself raise the debt ceiling. Instead, it sets up
a procedure for an additional vote on the issue that would require
a simple majority in the Senate rather than the 60 votes needed for
Blinken Calls China, Russia Efforts to Disrupt Global Order
Attempts by China or Russia to expand their territory by
invasions of Taiwan or Ukraine, respectively, would be serious
mistakes with severe consequences, Secretary of State Antony
Blinken said Tuesday at The Wall Street Journal's CEO Council
President Biden's warning to Russian President Vladimir Putin on
a secure video call Tuesday about the consequences of a potential
invasion of Ukraine should "affect President Putin's calculus going
forward," Mr. Blinken said.
Sen. Joe Manchin Holds Back Support for Social-Spending Bill
WASHINGTON-Sen. Joe Manchin declined to commit to voting for
Democrats' roughly $2 trillion social-policy and climate package,
citing concerns about inflation and the length of programs, weeks
before the Christmas deadline party leaders are racing to meet.
Mr. Manchin, a West Virginia Democrat, made the remarks during
The Wall Street Journal's CEO Council Summit at a pivotal moment
for Democrats in Washington-and one where he has been a key figure.
Because Senate Democrats are using a special budget maneuver to
pass their education, healthcare and climate package without any
GOP support, they can't lose a single senator from their own
Commission Approves Report on Supreme Court Amid Partisan
WASHINGTON-A bipartisan commission appointed by President Biden
unanimously adopted a report detailing controversies over the
Supreme Court and assessing proposals to address them, but few
expected the 294-page document to resolve political divisions
concerning the judiciary that have intensified in recent years.
At Tuesday's meeting, members of the commission universally
praised the report-writing process for its civil dialogue and
regard for all views. However, the final report was neither
designed to nor did it produce consensus or any
China Aims to 'Revise the Global Rule Set,' Top U.S. General
WASHINGTON-China is expanding its military in a bid to "revise
the global rule set" and undo the post-World War II national
security framework, the highest ranking military officer said
Army Gen. Mark Milley, the Chairman of the Joint Chiefs of
Staff, said China's investment in its navy, hypersonic missiles,
cyber and other technologies are designed to ensure that it, along
with Russia and the U.S., are world-leading nations. Such a rise
would end a post-World War II era in which Russia and the U.S. were
the only superpowers.
Germany's Scholz Takes Power After Merkel's 16-Year Rule
BERLIN-Germany's parliament elected a new chancellor on
Wednesday, ending Angela Merkel's 16-year rule. The country's new
center-left leader inherits longstanding challenges from his
predecessor and faces a cluster of short-term crises that could
complicate his plans to modernize the German state and its
Olaf Scholz, 63, and his Green and free-market coalition
partners have agreed on a four-year program to overhaul Germany's
economy, fight climate change, digitize public services and reverse
its demographic decline.
Write to email@example.com TODAY IN CANADA
Evertz Tech 2Q
North West Company 3Q
Economic Indicators (ET):
1000 Bank of Canada interest rate announcement
Stocks to Watch:
Centamin Sees Gold Production Growing to 450,000-500,000 Ounces
Centamin said Wednesday that its Sukari gold mine in Egypt will
increase production over the next three years and reach between
450,000 and 500,000 ounces in 2024.
The FTSE 250 gold miner guided for production of 430,000-460,000
ounces in 2022 and 450,000-475,000 ounces in 2023. Capital
expenditure is expected to total $555 million in that three-year
The prospects of the mine have been enhanced by a 23% increase
in proven and probable mineral reserves, including a threefold
increase for underground reserves, Centamin said.
An expansion study on the development of Sukari's underground
pit is underway for completion in the second half of 2022.
Centamin said the new geological model for Sukari underpins a
mine schedule of at least 12 years, and that it has identified a
clear roadmap to constantly produce more than 500,000 ounces a year
over the next decade.
However, Chief Executive Martin Horgan said that the company can
increase production even further.
"That [production of 500,000 ounces per year] is what we can
demonstrate that we can--with a high level of
confidence--consistently deliver. But I think there is a chance to
beat that," Mr. Horgan told Dow Jones Newswires.
Centamin also said it plans to deliver an additional 2 million
ounces of mineral reserve growth by 2024 through a combination of
exploration at both Sukari underground and the Doropo project in
RBC Capital Markets said in a note Wednesday that 2022 cost
guidance was disappointing. Centamin forecast all-in sustaining
costs of $1,275-$1,425 an ounce for next year.
"We're not alone in Centamin. It's a sector-wide and global
issue around short-term cost inflation pressures. Fuel clearly is
an obvious one," Mr. Horgan said.
Shares in London were flat at 92.12 pence.
Centamin Delivers on Sukari Potential, But Cost Guidance
Centamin has announced a review for its flagship Sukari gold
mine in Egypt. Gold reserves have been increased by 1.1 million
ounces, enabling a mine schedule of at least 12 years which will
enable the company to reach annual production of 500,000
The update has delivered on Sukari's potential and suggests more
upside to come as exploration and underground expansion accrue over
time, RBC Capital Markets says. Also, with $256 million on the
balance sheet, the group might look to return some cash to
shareholders, RBC says.
On the downside, forward guidance, especially for 2022 costs, is
disappointing, the bank says. The new cost guidance midpoint of
$1,350 an ounce is ahead of $1,038 previously.
Expected Major Events for Wednesday
04:30/JPN: Nov Corporate Insolvencies
05:00/JPN: Nov Economy Watchers Survey
06:30/FRA: 3Q Job creation
11:00/FRA: Oct OECD Harmonised Unemployment Rates
12:00/US: 12/03 MBA Weekly Mortgage Applications Survey
15:00/CAN: Bank of Canada interest rate announcement
15:00/US: Nov Online Help Wanted Index
15:00/US: Oct Job Openings & Labor Turnover Survey
15:30/US: 12/03 EIA Weekly Petroleum Status Report
23:50/JPN: Nov Money Stock, Broadly-defined Liquidity
23:50/JPN: 4Q Business Outlook Survey
All times in GMT. Powered by Kantar Media and Dow Jones.
Expected Earnings for Wednesday
ADF Group (DRX.T) is expected to report for 3Q.
Argan Inc (AGX) is expected to report $0.46 for 3Q.
AstroNova Inc (ALOT) is expected to report for 3Q.
Brown-Forman Corp - B Share (BFA,BFB) is expected to report
$0.53 for 2Q.
CSP Inc (CSPI) is expected to report for 4Q.
Campbell Soup (CPB) is expected to report $0.79 for 1Q.
Dollarama (DLMAF,DOL.T) is expected to report $0.57 for 3Q.
Duckhorn Portfolio Inc (NAPA) is expected to report for 1Q.
Evertz Technologies (ET.T,EVTZF) is expected to report $0.21 for
Fluence Energy Inc (FLNC) is expected to report for 4Q.
GameStop Corp (GME,GMEB) is expected to report $-0.40 for
Gatos Silver Inc (GATO) is expected to report for 3Q.
Greif Inc - A Share (GEF,GEFB) is expected to report $1.45 for
Innovative Solutions & Support Inc (ISSC) is expected to
report for 4Q.
Kewaunee Scientific (KEQU) is expected to report for 2Q.
Korn Ferry (KFY) is expected to report $1.36 for 2Q.
Kronos Bio Inc (KRON) is expected to report for 3Q.
Lovesac Co (LOVE) is expected to report $-0.41 for 3Q.
MGIC Investment (MTG) is expected to report.
MIND Technology Inc (MIND) is expected to report for 3Q.
Mullen Group (MLLGF,MTL.T) is expected to report.
North West Co Inc (NWC.T) is expected to report $0.72 for
Oxford Industries (OXM) is expected to report $1.33 for 3Q.
Photronics (PLAB) is expected to report $0.25 for 4Q.
Phreesia Inc (PHR) is expected to report for 3Q.
RH (RH) is expected to report $6.59 for 3Q.
Solo Brands Inc (DTC) is expected to report for 3Q.
Sportsman's Warehouse Holdings Inc (SPWH) is expected to report
$0.50 for 3Q.
Star Group LP (SGU) is expected to report for 4Q.
Streamline Health (STRM) is expected to report $-0.05 for
Thor Industries (THO) is expected to report $3.19 for 1Q.
Torrid Holdings Inc (CURV) is expected to report for 3Q.
Udemy Inc (UDMY) is expected to report for 3Q.
UiPath Inc (PATH) is expected to report for 3Q.
United Natural Foods Inc (UNFI) is expected to report $0.40 for
Vera Bradley Inc (VRA) is expected to report $0.24 for 3Q.
Weber Inc (WEBR) is expected to report for 4Q.
Powered by Kantar Media and Dow Jones.
ANALYST RATINGS ACTIONS
Air Products & Chemicals Cut to In-Line From Outperform by
Evercore ISI Group
Bumble Raised to Overweight From Neutral by JP Morgan
CarMax Raised to Overweight From Neutral by JP Morgan
Cerence Raised to Outperform From Market Perform by Raymond
CNX Resources Cut to Neutral From Overweight by JP Morgan
CommScope Holding Raised to Buy From Hold by Jefferies
CVR Energy Raised to Neutral From Underperform by Credit
Del Taco Restaurants Cut to Hold From Buy by Benchmark
Del Taco Restaurants Cut to Hold From Buy by Jefferies
Del Taco Restaurants Cut to Neutral From Outperform by
Digital Turbine Raised to Outperform From Neutral by
First Wave BioPharma Cut to Hold From Buy by Maxim Group
Global Blood Therapeutics Raised to Outperform From Market
Perform by William Blair
HealthEquity Cut to Outperform From Strong Buy by Raymond
Helmerich & Payne Cut to Underweight From Equal-Weight by
Jack In The Box Raised to Buy From Hold by Deutsche Bank
Jackson Financial Cut to Equal-Weight From Overweight by Morgan
Juniper Networks Raised to Buy From Hold by Jefferies
Magnolia Oil & Gas Cut to Neutral From Overweight by JP
Merck Cut to Neutral From Buy by Guggenheim
Murphy Oil Raised to Overweight From Neutral by JP Morgan
OGE Energy Cut to Neutral From Buy by Mizuho
Patterson-UTI Raised to Overweight From Equal-Weight by Morgan
PLx Pharma Raised to Outperform From Market Perform by Raymond
PPG Industries Raised to Outperform From In-Line by Evercore ISI
RPM International Raised to Outperform From In-Line by Evercore
Shift Technologies Cut to Neutral From Overweight by JP
Starbucks Raised to Buy From Neutral by MKM Partners
Vroom Cut to Neutral From Overweight by JP Morgan
This article is a text version of a Wall Street Journal
newsletter published earlier today.
(END) Dow Jones Newswires
December 08, 2021 06:04 ET (11:04 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.