U.S. Weekly Jobless Claims; Oracle 2Q earnings.
Stock futures edged down as investors assessed the latest
headlines on restrictions to limit the spread of the Omicron
Stocks have swung in recent weeks, buffeted by conflicting
headlines on the Omicron coronavirus variant and mixed signals on
the health of the economy. Investors are still awaiting further
data on the strain's severity and vaccine efficacy. Some
pharmaceutical companies including Pfizer and GlaxoSmithKline have
said this week that their shot and antibody treatment appear to
work in early-stage studies.
European governments have moved to tighten restrictions,
spurring concerns about setbacks to the economic recovery. U.K.
Prime Minister Johnson outlined a new work-from-home mandate and
mask guidelines on Wednesday evening. A study released by a
Japanese scientist said the variant was four times more
transmissible than the Delta strain.
"There's still a lot we don't know, we're waiting for details to
emerge, " said Arun Sai, a multiasset strategist at Pictet Asset
Management. On restrictions, "as long as it's temporary, it doesn't
completely derail the recovery. We now know the playbook. We're
talking about a one or two quarter postponement of a recovery in
services, that's the critical element that's at risk here."
Cloud-computing firm Oracle, network company Broadcom and
wholesaler Costco are set to report Thursday after market close.
Popular meme stock GameStop declined 3.2% in off-hours trading
after the company posted earnings that showed a widening loss last
"Earnings have been strong overall, it's a really positive
underlying driver for equity markets," said Kiran Ganesh, a
multiasset strategist at UBS Global Wealth Management.
Shares of Amazon.com declined 0.2% premarket after the Italian
government fined it $1.3 billion for alleged abuse of market
dominance. The European Union is also investigating the e-commerce
giant in a similar antitrust case.
Fresh data on U.S. jobless claims, a proxy for layoffs, is set
to go out at 8:30 a.m. ET. Economists are forecasting that the
level will remain near pandemic lows. It has come close to the
pre-pandemic average in recent weeks in a sign that the labor
market is improving.
In Asia, China's producer-price index showed a 12.9% increase in
November from a year earlier, a decline from the previous month but
still more than economists expected. Consumer prices also rose.
"Factory gate prices only showed modest signs of slowing," which
may signal that higher inflation will remain in place in the coming
months, said Michael Hewson, a chief markets analyst at CMC
Markets. China's producer prices drive consumer prices around the
world, he added.
The dollar was higher in Europe, with the USD Index back above
96.00, as investors looked ahead to data Friday that are expected
to show inflation accelerated further in November, which would
support bets the Federal Reserve will speed up the withdrawal of
On Wednesday the dollar "emerged as an underperformer" on
reduced safe haven flows after the Pfizer/BioNTech announcement,
said ING analysts. "Investors may be attracted by current levels
[in particular against low-yielders] to build back some dollar
longs ahead of the CPI report and the Fed meeting next week, so we
would expect the dollar to start finding some support as early as
Sterling is likely to weaken versus the dollar if the Bank of
England delays raising interest rates and the Fed accelerates the
tapering of asset purchases, MUFG Bank said.
The BOE will likely keep rates unchanged until at least February
after the U.K. government tightened coronavirus restrictions and
following recently cautious comments from BOE officials, MUFG's Lee
Meanwhile, the Fed should speed up tapering at its December
14-15 meeting, he said. "The time gap between the first BOE and Fed
rate hikes is likely to be much shorter now than initially expected
which should keep downward pressure on cable heading into year end
and moving it closer to the 1.3000-level."
Bitcoin reversed direction after four days of gains, slipping 2%
from its level at 5 p.m. Wednesday. It traded below $50,000, a 28%
drop from its record high set in November.
The yield on the benchmark 10-year Treasury note edged down to
1.494% Thursday from 1.508% Wednesday.
Long-dated yields for government debt edged higher still in
Europe, after they posted their biggest three-day rise in weeks
following the Pfizer/BioNTech Omicron report. Meanwhile, the 2-year
yield, which is most closely associated with the near-term path of
Fed policy, declined on Wednesday.
Bank of America said the yield curve will keep flattening: "The
hawkish Fed pivot suggests risks of further curve flattening and
further pull forward of rate hikes."
Higher U.S. front-end rates "are a clear reflection of the
recent shift in Fed policy due to elevated inflation concerns,"
while fears of policy errors help drive the long-end trend, as
tightening begins when the economy still struggles, said BofA.
The European Central Bank's first interest rate rise could come
at the beginning of 2024, with a 25 basis point increase, said
Barclays. It sees some risks of a rate hike already a quarter
earlier, or even in mid-2023, subject to inflationary
"If inflation does not fall below 1.5% in 4Q 2022-1Q 2023, as
per our and the ECB's current forecasts, but converges to 2% from
above, the lift-off date would likely be brought forward to 1H
2023," Barclays said.
Brent crude could climb even further after a recent rebound as
structural deficits keep supporting prices, Goldman Sachs said.
Brent has already recovered about half of the ground it lost as the
emergence of the Omicron variant fueled concerns about oil
"We therefore recommend investors re-engage some long positions,
but caution that oil markets may see substantial increases in
volatility and decreases in liquidity in coming weeks," it
Iron ore has become Morgan Stanley's top mined-commodities pick
on a six-month horizon, citing an expected recovery in Chinese
steel output following the Beijing Winter Olympics in February.
A recent slip in aluminum prices should give investors a good
entry point to buy into that commodity as well in the coming
months, supported by constrained Chinese supply, said Morgan
"We also highlight nickel's strong demand story, supported by
both stainless steel output and EVs, and supply risks in
Indonesia." Coal and zinc are toward the bottom of its list of
picks, given Beijing has intervened to boost coal supply and zinc
is facing risks to demand.
Meantime, Citi expects a U-shaped swing in iron-ore prices in
2022 as an easing in Chinese credit will likely prompt a recovery
in property starts and sales in the second half of 2022, following
major declines in the first half. Citi said China already has
plenty of iron ore sitting in stockpiles at its ports to meet
upticks in demand.
"Steel mills' weak appetite for purchasing iron ore, owing to
lower output and rising use of steel scrap, has resulted in
30-million-ton inventory builds at Chinese ports since July
Gold was flat in early European trade with investors focusing on
upcoming U.S. inflation data due this week. Geopolitical tensions
between the U.S. and Russia may help support demand for safe-haven
assets like gold in the near term, Commerzbank said.
TODAY'S TOP HEADLINES
Robinhood's Stock Fizzles After Splashy Public Offering
It has been a rough few weeks for Robinhood Markets Inc.'s
Shares of the retail-trading platform have tumbled lately and
reached an all-time intraday low this week. Robinhood's stock has
been trading for more than four weeks below its initial public
offering price of $38 a share. It closed Wednesday at $23.72, a 38%
decline from its IPO price and a 72% drop from its intraday high of
$85 reached earlier this year.
Italy's UniCredit Unveils New Strategy as Restructuring Ends
ROME-UniCredit SpA said it plans to expand by hiring staff and
investing in digitization as part of a three-year strategic plan
that includes share buybacks and bigger dividends.
The plan, the first since Chief Executive Andrea Orceltook the
helm in April, targets annual revenue growth of about 2% and profit
growth of 10% through 2024.
Chinese Developer Kaisa Defaults, Fitch Says, as Industry's Debt
Kaisa Group Holdings Ltd., which in 2015 became one of the first
Chinese developers to default abroad, has defaulted again after not
repaying a $400 million bond that came due this week, Fitch Ratings
Failures to repay investors are piling up in China's property
sector, as real-estate companies buckle under the strain of falling
home sales, government curbs on borrowing, and a bond-market
selloff that has all but shut the market for new deals.
Uber Workers Would Be Classed as Employees Under EU Proposal
Uber Technologies Inc., Amazon.com Inc.-backed Deliveroo PLC and
other gig-economy companies could be forced to give more benefits
to their drivers and delivery personnel under a European Union
proposal that would reclassify many of their jobs as
The draft bill, proposed Thursday by the EU's executive arm,
would establish a presumption that many of the companies in what is
often called the gig economy actually employ workers, depending on
the level of control the companies exercise over how workers
perform their jobs. Until now, most such companies have deemed the
majority of their workers to be independent contractors.
Amazon Fined $1.3 Billion in Italian Antitrust Case
Italy's antitrust regulator fined Amazon.com Inc. $1.3 billion
for harming competitors by favoring third-party sellers that use
the U.S. company's logistics services.
The fine of 1.13 billion euros comes as Amazon awaits the
outcome of a similar investigation being carried out by the
European Union. The EU last year separately filed antitrust charges
against Amazon for allegedly using nonpublic data from third-party
sellers to compete against them.
Senators Want Social-Media Apps to Share Research
A bipartisan group of U.S. senators plans to introduce
legislation that would require Meta Platforms Inc. and other
social-media companies to provide outside researchers with data
The bill, to be announced Thursday by Sens. Chris Coons (D.,
Del.) Rob Portman (R., Ohio) and Amy Klobuchar (D.,Minn.), would
allow researchers to submit proposals to the National Science
Foundation. If the NSF supports a proposal, social-media platforms
would be required to furnish the needed data, subject to privacy
protections that could include anonymizing it or "white rooms" in
which researchers could review sensitive material.
SoundCloud Plans to Expand Free Services to Attract New
SoundCloud Ltd., the music-streaming platform known for
launching the careers of Billie Eilish, Post Malone and other
artists, plans to offer additional services for free to attract
more musicians to its platform, the company's chief financial
AstraZeneca Covid-19 Antibody Authorized by FDA as Novel Tool to
Prevent Symptomatic Disease
The U.S. Food and Drug Administration authorized a preventive
antibody combination from AstraZeneca PLC that has shown strong
efficacy in reducing risk of symptomatic Covid-19, offering a
first-of-its-kind alternative for a minority of people for whom
vaccines are considered less effective.
The antibody cocktail, called Evusheld, is aimed primarily for
use in a minority of adolescents and adults age 12 and older with
moderate to severely compromised immune systems. That may be
because they have cancer or another illness or take medications or
undergo treatments such as chemotherapy that inhibit an immune
response to Covid-19 vaccines, the FDA said in a statement.
Mambu Valued at $5.3 Billion in Investment Led by Private-Equity
A group led by private-equity company EQT AB is acquiring a
minority stake in banking-software firm Mambu, a deal that values
the financial-technology company at more than $5.3 billion, the
The investment is the latest bet on European technology
providers that are taking advantage of the switch to
digital-banking services by consumers and businesses.
Jobless Claims Are Stabilizing at Pre-Pandemic Levels
Worker filings for unemployment benefits are settling at
pre-pandemic levels as a tight labor market keeps layoffs low.
Economists surveyed by The Wall Street Journal expect jobless
claims, a proxy for layoffs, fell to 211,000 for the week ended
Dec. 4 from 222,000 the previous week. The Labor Department will
report last week's jobless claims figures on Thursday at 8:30 a.m.
Market Can Weather Evergrande Crisis, China's Top Central Banker
Financial stress at China Evergrande Group and a few of its
peers won't cause longer-term damage to the Hong Kong market, and
broader problems with debt at Chinese property developers should be
dealt with according to market principles, China's top central
Hong Kong-listed Evergrande, which is one of China's largest
developers and has close to $20 billion in U.S. dollar bonds
outstanding, didn't make overdue payments on some bonds before a
final deadline Monday, potentially setting the stage for Asia's
largest default. Fitch Ratings downgraded Evergrande and two key
subsidiaries to a "restricted default" rating on Thursday, citing
the missed coupon payments.
China Reopens a Funding Spigot for Property Developers
HONG KONG-Chinese regulators have quietly reopened an onshore
funding spigot for the country's property developers, enabling some
firms to tap into an obscure form of debt financing that helps pay
Over the past four years, real-estate developers from China
Evergrande Group to Country Garden Holdings Co. were regular users
of yuan-denominated debt instruments known in the industry as
"supply chain asset-backed securities." Property firms were behind
the equivalent of more than $38.6 billion in such bonds that were
issued last year, according to Wind data, a huge jump from $12.4
billion in 2019. The actual totals are likely higher, because some
deals from developers weren't classified as such.
China's Factory-Gate Inflation Softens in November
HONG KONG-China's factory-gate inflation ebbed in November after
hitting a 26-year high, which economists say will give policy
makers more room for easing to bolster a slowing economy.
The producer-price index rose 12.9% from a year earlier in
November, down from 13.5% growth in October, which was the fastest
increase since 1995, according to data released by the National
Bureau of Statistics. The reading beats the 12% increase expected
by economists polled by The Wall Street Journal.
Covid Spurs Biggest Rise in Life-Insurance Payouts in a
The Covid-19 pandemic last year drove the biggest increase in
death benefits paid by U.S. life insurers since the 1918 influenza
epidemic, an industry trade group said.
Death-benefit payments rose 15.4% in 2020 to $90.43 billion,
mostly due to the pandemic, according to the American Council of
Life Insurers. In 1918, payments surged 41%.
German Exports Rose in October, Beating Forecasts
German exports increased in October, beating forecasts and
surpassing pre-pandemic levels.
Exports rose 4.1% on month in adjusted terms, statistics office
Destatis said Thursday. Economists had forecast a 1.1% increase in
adjusted terms, according to a poll by The Wall Street Journal.
U.S. Moves to Tighten Iran Sanctions Enforcement as Nuclear
The Biden administration is moving to tighten enforcement of
sanctions against Iran, according to senior U.S. officials, the
first sign of Washington increasing economic pressure on Tehran as
diplomatic efforts to restore the 2015 nuclear deal falter.
According to senior State and Treasury Department officials, the
U.S. will send a top-level delegation, including the head of
Treasury's Office of Foreign Assets Control, Andrea Gacki, next
week to the United Arab Emirates. The U.A.E. is a top U.S. ally but
also Iran's second-largest trade partner and a conduit for Iran's
trade and financial transactions with other countries.
Senate Passes Legislation Aimed at Blocking Biden's Covid-19
Vaccine Rules for Employers
WASHINGTON-The Senate approved legislation aimed at nullifying
President Biden's vaccine-or-test mandate for private employers,
marking a significant rebuke even if lawmakers ultimately fall
short of stopping the new Covid-19 rule.
The measure passed 52-48, with Democratic Sens. Joe Manchin of
West Virginia and Jon Tester of Montana joining all Republicans in
supporting the bill.
Covid-19 Vaccine Rollout for Young Children Is Slow in Many
Covid-19 vaccinations for children 5 to 11 years old are off to
a slow start in many parts of the U.S., federal data show,
underscoring the challenges health officials face in persuading
parents to inoculate their children.
Roughly five million, or 18%, of the estimated 28.4 million U.S.
children in the 5-to-11 age bracket have gotten at least one shot
in the five weeks since they were cleared to get vaccinated, the
data show. The picture varies by region, with rates in several New
England states above 30% and some states in the South far off the
national pace, an analysis by The Wall Street Journal of the data
Olympics Boycott Expands to Include Diplomatic Officials From
OTTAWA-The U.K. and Canada on Wednesday joined a widening
diplomatic boycott of the 2022 Winter Olympics in Beijing, citing
concerns over China's human rights record.
The U.S. said on Monday that it wouldn't send government
officials to the Games, which are set to begin in February,
although athletes will still be able to participate. The Biden
administration had faced pressure to boycott the Olympic Games for
months, but those calls intensified after Chinese tennis star Peng
Shuai vanished from public view in November after making a public
allegation of sexual assault against a retired Chinese
Write to email@example.com TODAY IN CANADA
Transat A.T. 4Q
Stocks to Watch:
Kinross Announces Acquisition Of Great Bear Resources; Has
Agreed to Upfront Payment of $1.4B Payable at Election of Great
Bear Shareholders; Upfront Payment to Be Made in Cash and Kinross
Also Agreed to Contingent Consideration of About $46M;
Contingent Consideration Is in the Form of Value Rights
Exchangeable for 0.1330 Kinross Shrs Per Great Bear Shr; Contingent
Consideration Payable in Connection With Gold Production at Dixie
Boards of Both Companies Have Approved Deal; Great Bear
Shareholders, Security Holders to Vote on Deal at Special Meeting
Expected to Be Held in 1Q
Pembina Pipeline Looks to Raise C$1B in Bond Issuance; Offering
Senior Unsecured Medium-Term Notes in Two Tranches;
Offering C$500M in Fixed-Coupon 3.53% Notes Maturing in 2031;
Offering C$500M in Fixed-Coupon 4.49% Notes Maturing in 2051;
Pembina to Use Proceeds of Notes Sale to Pay Down Debt, Meet
General Needs; Expects to Conclude Bond Offering on Dec. 10
Rogers Communications Looks to Raise C$2B via Bond Sale; Selling
5.0% Fixed-To-Fixed Rate Subordinated Notes Due 2081;
Expects Net Proceeds of About C$1.98B From Notes Sale; Aims to
Use Proceeds to Buy 3500 MHz Spectrum Licences It Was Awarded
Earlier This Year; Notes Being Offered Exclusively to Residents in
Canadian Province; Notes Sale to Close on Dec. 17
Expected Major Events for Thursday
00:01/UK: Nov RICS Residential Market Survey
01:01/UK: Nov KPMG and REC UK Report on Jobs
06:00/JPN: Nov Preliminary Machine Tool Orders
07:00/GER: 3Q Labour cost index
07:00/GER: Oct Foreign Trade
09:30/UK: 3Q Business Finance Review
11:00/FRA: Oct OECD Composite Leading Indicators
13:00/RUS: Weekly International Reserves
13:30/US: 12/04 Unemployment Insurance Weekly Claims Report -
13:30/US: U.S. Weekly Export Sales
14:45/US: Consumer Comfort Index
15:00/US: Oct Monthly Wholesale Trade
15:30/US: 12/03 EIA Weekly Natural Gas Storage Report
17:00/US: World Agricultural Supply & Demand Estimates
21:30/US: Federal Discount Window Borrowings
21:30/US: Foreign Central Bank Holdings
23:50/JPN: Nov Corporate Goods Price Index
All times in GMT. Powered by Kantar Media and Dow Jones.
Expected Earnings for Thursday
American Outdoor Brands Inc (AOUT) is expected to report for
BMTC Group Inc (GBT.T) is expected to report for 3Q.
Bit Digital Inc (BTBT) is expected to report for 3Q.
Broadcom Inc (AVGO) is expected to report $4.55 for 4Q.
Chewy Inc (CHWY) is expected to report for 3Q.
Ciena Corp (CIEN) is expected to report $0.73 for 4Q.
Comtech Telecommunications Corp (CMTL) is expected to report
$-0.21 for 1Q.
Costco Wholesale Corp (COST) is expected to report $2.60 for
Cronos Group Inc (CRON,CRON.T) is expected to report $-0.10 for
Eargo Inc (EAR) is expected to report for 3Q.
Empire Co (EMLAF,EMP.A.T) is expected to report for 2Q.
FP Newspapers (FP.V) is expected to report for 3Q.
Frequency Electronics (FEIM) is expected to report for 2Q.
Helix BioPharma (HBP.T,HBPCF) is expected to report $-0.02 for
Hooker Furnishings Corp (HOFT) is expected to report $0.38 for
Hormel Foods Corporation (HRL) is expected to report $0.51 for
Hovnanian Enterprises Inc (HOV) is expected to report for
Inscape Corp (INQ.T) is expected to report for 2Q.
J.W. Mays Inc (MAYS) is expected to report for 1Q.
KLX Energy Services Holdings Inc (KLXE) is expected to report
KalVista Pharmaceuticals Inc (KALV) is expected to report $-0.92
Kaspien Holdings Inc (KSPN) is expected to report for 3Q.
Lakeland Industries (LAKE) is expected to report $0.34 for
Lee Enterprises Inc (LEE) is expected to report for 4Q.
Leslie's Inc (LESL) is expected to report for 4Q.
Li-Cycle Holdings Corp (LICY) is expected to report for 4Q.
Liquidity Services (LQDT) is expected to report for 4Q.
Lululemon Athletica Inc (LULU) is expected to report $1.37 for
Mesa Air Group Inc (MESA) is expected to report $-0.16 for
Oracle Corp (ORCL) is expected to report $0.83 for 2Q.
SandRidge Mississippian Trust I (SDTTU) is expected to report
SeaChange International Inc (SEAC) is expected to report $-0.07
Sigmatron International Inc (SGMA) is expected to report for
Sprinklr Inc (CXM) is expected to report for 3Q.
Transat AT (TRZ.T) is expected to report $-3.04 for 4Q.
Transcontinental Inc - Class A (TCL.A.T,TCL.B.T,TCLAF) is
expected to report $0.69 for 4Q.
Vail Resorts (MTN) is expected to report $-3.57 for 1Q.
Vince Holding Corp (VNCE) is expected to report for 3Q.
Waterloo Brewing Ltd (WBR.T) is expected to report for 3Q.
Powered by Kantar Media and Dow Jones.
ANALYST RATINGS ACTIONS
AeroVironment Cut to Hold From Buy by Canaccord Genuity
American States Water Cut to Underweight From Equal-Weight by
Avid Bioservices Cut to Sector Weight From Overweight by
Becton Dickinson Cut to Neutral From Overweight by Piper
Core & Main Cut to Neutral From Buy by Citigroup
Elastic Raised to Overweight From Neutral by JP Morgan
Essential Utilities Raised to Overweight From Equal-Weight by
Evercore Cut to Equal-Weight From Overweight by Morgan
Goodyear Tire Raised to Buy From Hold by Deutsche Bank
Honeywell Intl Cut to Neutral From Buy by B of A Securities
ITT Inc Raised to Buy From Neutral by B of A Securities
Kraft Heinz Cut to Neutral From Buy by Guggenheim
MFA Financial Raised to Outperform From Market Perform by
Prometheus Biosciences Raised to Outperform From Perform by
Pulmonx Raised to Overweight From Neutral by Piper Sandler
Stitch Fix Cut to In-Line From Outperform by Evercore ISI
Stitch Fix Cut to Sector Weight From Overweight by Keybanc
SVB Financial Raised to Overweight From Equal-Weight by Wells
This article is a text version of a Wall Street Journal
newsletter published earlier today.
(END) Dow Jones Newswires
December 09, 2021 06:15 ET (11:15 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.