Watch For:

U.S. Leading Indicators for December; Canada New Housing Price Index for December.

Opening Call:

Stock futures were mixed Friday, but the Nasdaq was poised to push deeper into correction territory as technology stocks remain under pressure on multiple fronts.

Wall Street looks to end the week after a tumultuous few days of trading. Wednesday and Thursday both saw the Nasdaq rise more than 1% and then end down more than 1%, which is the first time a back-to-back rise and fall like that has happened in almost a year.

The index entered correction territory earlier in the week -- down more than 10% from its high in mid-November -- and was heading deeper into the red Friday.

One of the latest catalysts for a move lower among tech stocks, which have a weighting with more influence in the S&P 500 and Nasdaq than the Dow, was downbeat news about Peloton. Underwhelming financial results from Netflix after the bell Thursday haven't helped the picture.

"The bears took control of the ball," said Jim Reid, a strategist at Deutsche Bank. "The S&P 500 is on track for a third consecutive weekly decline for the first time since September 2020."

Stocks have been under pressure over the last couple of weeks, as investors worry about tightening monetary policy from the Federal Reserve against the backdrop of high inflation. The market is pricing in three or four interest-rate increases this year, with the first hike in March.

These factors have helped bond yields spike. After closing out 2021 at 1.51%, the yield on the benchmark 10-year U.S. Treasury note neared 1.9% earlier this week. Higher bond yields discount the present value of future cash, and have a negative influence on tech stocks, many of which have valuations that bank on profits years into the future.

But the declines among stocks seen Thursday, continuing Friday, have happened even as yields fell. The 10-year note's yield was down further Friday.

"Investors couldn't even blame a rise in yields," said Michael Hewson, an analyst at broker CMC Markets. "The inability of U.S. markets to hold on to yesterday's move higher is a worry and could well indicate the potential for further losses in the coming days."


The dollar has been under pressure for most of January with favorable interest rate differentials failing to prop up the currency, RBC Capital Markets said.

The rally in commodity prices and U.S. equity weakness have been a more important driver for the dollar in the last month, RBC's George Davis said.

"With U.S. equities recently posting a series of bearish long-term trend reversals, further declines could undermine the USD via shifts in asset allocation." U.S. equity declines may trigger outflows from U.S. assets, thereby hurting the dollar, he said.

The Turkish lira is likely to weaken this year following a temporary stabilisation as Turkey's central bank looks set to resume its interest rate cutting cycle after leaving rates unchanged Thursday, Capital Economics said.

"We think that falling inflation towards the end of the year will provide the motivation for the CBRT to press ahead with further rate cuts amounting to 100 basis points placing renewed downward pressure on the lira," Capital Economics economist Joseph Marlow said.

Meanwhile, very low foreign exchange reserves mean policymakers won't be in a position to intervene in the currency market to bolster the lira, he says. Capital Economics expects USD/TRY to rise to 16.00 by year-end from 13.3994 currently.

Cryptocurrencies, already pressured by market sentiment away from risk assets, tumbled. Bitcoin was 7.5% lower over the past 24 hours to below $39,000, according to data from CoinDesk. Smaller peer Ether dropped around 8.5% over the same period to below $2,900.

The fall can mostly be blamed on Russia, where cryptocurrencies are popular among citizens and the country is a hub for mining -- the process that generates new digital currency tokens. The Russian central bank has proposed banning crypto mining as part of a wider prohibition that includes preventing people from trading or transacting with the likes of Bitcoin.

"The pessimism continues to grow among investors and traders when it comes to riskier assets and this is chiefly influencing the price of equities and bitcoin," said Naeem Aslam, chief market analyst at AvaTrade, in a note to clients.

"The thing with bitcoin is that when it begins to fall, the price action drops like there is no tomorrow," said Aslam, who added that January also tends to be a volatile month for the cryptocurrency on a historical basis.


Prices for benchmark government bonds rose, partially reversing a recent selloff that has helped put pressure on the shares of highly valued tech stocks. That pushed down yields, with the yield on the 10-year U.S. Treasury note falling to 1.783%, according to Tradeweb, from 1.833% Thursday.

The rise in government bond yields won't be a linear process, DZ Bank analyst Christoph Kutt said. "The trajectory of inflation rates may involve downside as well as upside surprises, which the central banks will have to address as part of their exit strategies," he said.

The Fed's approach toward policy normalization will be "far more forceful" than that of the European Central Bank, Kutt said. The ECB has to be vigilant against inflation risks and the threat of eurozone fragmentation, he said.


Oil's rally should continue as OPEC struggles to meet its production targets and winter weather keeps demand strong, said TD Securities. Demand expectations have risen this week, the firm noted, pointing to upward revisions to forecasts from the IEA.

At the same time, signs that OPEC is struggling to meet supply targets are building. Add to that the possibility of cold winter weather in the Northern Hemisphere and oil's outlook is bullish, said Bart Melek, the firm's head of commodity strategy.

"As the winter continues, strong demand across the energy complex will add to bullish sentiment. There is a very real possibility that colder-than-usual weather due to La Niña weather patterns will drive demand higher, pushing the market into a deficit sooner, rather than later."

A shortage of nickel worsened in November, according to data from the International Nickel Study Group. The global nickel market had a 3,000-metric-ton deficit in November, 1,400 tons larger than in the previous month, the INSG said.

In the 11 months through November, the shortage of nickel totaled 167,000 tons, compared with a surplus of 92,500 tons in the same period during 2020. Nickel prices have soared this month as stocks have dwindled.

Reports that Indonesia, a major producer, is considering a tax on nickel exports have put additional upward pressure on prices. Three-month nickel on the LME fell 0.7% to $23,680 a ton, but remains more than 14% higher for the month.

Gold edged lower in early European trade on position adjustment ahead of the weekend. The focus of gold traders is shifting to next week's FOMC meeting, with Russia-Ukraine tensions probably factored into the prices of precious metals, Phillip Futures said.

Rising U.S. interest rates remain a potential headwind since this translates into a higher opportunity cost of holding non-yielding bullion, the brokerage added.

Copper prices have seen choppy trading this week with demand concerns presenting headwinds while falling inventories have offered support. That range-bound trading is likely to continue with prices averaging $9,690 a metric ton this year, said analysts at BNP Paribas.

Weakness in China's construction sector is likely to drag on copper demand in the first half of the year while rising mine supply should also add to headwinds, the bank said.

Three-month copper on the LME is currently down 0.8%, joining a rout in global markets that comes as investors slash their exposure risk assets on fears of slowing economic growth. For the week, the metal is on course to end with a modest 2.2% gain.




Intel to Invest at Least $20 Billion in Ohio Chip-Making Facility

Intel Corp. plans to invest at least $20 billion in new chip-making capacity in Ohio, according to a person familiar with the matter, bolstering the company's semiconductor production ambitions as greater demand for digital products and a global chip shortage have amplified the need for more manufacturing.

The facility would be built near Columbus, Ohio, according to the person. It would add to Intel's effort to expand its chip-making business that has seen the company make more than $100 billion in investment pledges over the past year.


Chinese Developer Country Garden Raises $501 Million as Investor Mood Lifts

China's largest developer by contracted sales took advantage of a pickup in investor sentiment toward the property sector to sell convertible bonds, after deciding against pursuing a similar deal last week.

Country Garden Holdings Co. said Friday that it had raised 3.9 billion Hong Kong dollars, the equivalent of $501 million, by issuing the securities a day earlier.


France's Total Exits Myanmar, Citing Shareholder Pressure Since Coup

SINGAPORE-France's TotalEnergies SE said it is withdrawing from Myanmar over shareholder pressure and a deteriorating human-rights situation since the country's military seized power in a coup last year.

Western energy companies have faced growing calls to divest or withhold revenue from the junta, while governments including the U.S. and France have come under pressure to sanction the sector. Myanmar's oil-and-gas industry is the country's single largest source of foreign revenue.


Fosun Pharma, Other Chinese Drugmakers Rise After Deal to Make Merck's Covid-19 Pill

Shares of three Chinese drugmakers rose following news they will be among 27 companies globally to help make cheaper versions of Merck & Co.'s Covid-19 pill for distribution in low- and middle-income countries.

BrightGene Bio-Medical Technology Co. hit the maximum 20% daily rise on Shanghai's science- and tech-focused STAR board, while Shanghai Fosun Pharmaceutical (Group) Co.'s A-shares rose as much as 10% on Friday. Fosun Pharma's H-shares jumped 13% in early trading but have since pared gains to trade 3.5% higher.


China's Transport Ministry Summons Freight-Delivery Platforms, Warns Ride-Hailing Firms

China's Ministry of Transport has summoned four leading freight-delivery platform operators and warned four internet ride-hailing companies over recent driver complaints, in a sign of Beijing's continued scrutiny of the country's massive tech sector after a year-long crackdown.

The ministry on Friday said it has summoned four internet freight delivery firms, including the cargo businesses owned by DiDi Global Inc. and Inc., to discuss recent driver complaints about arbitrary pricing rules, membership fee increases, unfair competition and illegal practices such as overloading.


Peloton Warns Staff of Layoffs, Changes to Production

Peloton Interactive Inc.'s chief executive officer said the company is reviewing the size of its workforce and resetting production levels as the company adapts to more seasonal demand for its exercise equipment.

A note from CEO John Foley was sent to Peloton employees Thursday following a news report that Peloton was temporarily halting production of its connected-fitness products. The report caused shares of the company to sink 24%.


Netflix Shares Sink as Company Sees Subscriber Growth Slowing

Netflix Inc. said it expects to add a much smaller number of subscribers this quarter than it did a year ago as it adjusts to growing competition and lasting disruptions from the coronavirus pandemic, sending the video streamer's shares down sharply.

The company on Thursday forecast an increase of 2.5 million subscribers in the current quarter, compared with four million a year earlier. It also slightly missed its subscriber estimate for the fourth quarter, adding 8.3 million subscribers instead of the projected 8.5 million.


China's Yield Advantage Over U.S. Bonds Narrows

The extra yield that Chinese government bonds offer over U.S. Treasurys this week dropped below a percentage point for the first time in nearly three years, as the central banks of the world's two largest economies move in opposite directions.

The narrowing gap, reflecting both a rally in Chinese bonds and a U.S. selloff, reduces one longstanding argument in favor of foreign investors buying more Chinese debt. But analysts and investors say the long-term torrent of international money pouring into Chinese fixed-income markets is likely to continue.


The SPAC Ship is Sinking. Investors Want Their Money Back.

Wall Street's favorite pandemic bet is taking on water.

SPACs, or special-purpose acquisition companies, burst onto the scene in 2020 as the hip way to take Silicon Valley's hottest startups public. Unlike traditional initial public offerings, SPACs were seen as modern and accessible, allowing any investor to put money into the companies of the future at the same time as professional money managers.


Investors See New Sparkle in Europe's Tech Scene

Europe's tech scene has struggled to emerge from the shadows of giants in the U.S. and Asia, but friendly local policies and a global overflow of investment capital are now giving the region a gusher of cash.

Investments in European tech firms soared to $93.3 billion last year, a record and a 142% increase over the year before, according to CB Insights. The number of deals jumped as well, to 7,051 from 5,746 the year before and 6,051 the year before that.


Americans Should Pay More for Gas, not Less

They are a jalopy badly in need of repairs, but America's fuel-economy rules have been rolling along since 1975, burning more oil and spewing more pollution than their builders intended. Still, when it comes to one of the few roadworthy policies available, a tuneup makes more sense than a trip to the scrap heap.

Many economists will tell you that higher gas taxes make more sense than forcing car makers to sell more efficient vehicles, and they are right. Politics is the art of the possible, though. Last month, the Biden administration tightened up the Corporate Average Fuel Economy standards that the Trump administration had loosened. Unfortunately, CAFE's design flaws remain: Auto makers selling larger cars face less stringent targets than those selling smaller ones. That difference is generally even wider between passenger cars and light trucks-a category that actually includes larger crossovers and some SUVs, such as Toyota Rav4, Nissan Rogue and Ford Escape. The discrepancy mattered less in the 1970s when most people drove normal passenger cars.


Eurozone Inflation Seen Falling in 2022, But More Slowly Than Expected

Eurozone inflation climbed to a record-high level of 5.0% in December but should start decelerating from January. However, more persistent supply-side price pressures observed in energy, food and non-energy goods suggest a very gradual inflation moderation in 2022, Barclays says.

For Barclays, the eurozone inflation outlook remains uncertain with risks skewed to the upside. The surge in wholesale energy prices has so far mainly boosted inflation in counties with a relatively high share of variable-rate utility tariffs in the overall consumer bill, such as Spain and Belgium. This leaves countries with a larger share of regulated and fixed-rate utility tariffs--including Germany, France and Italy--exposed to delayed, and potentially sharp, consumer price hikes.


U.K. Retail Sales Slumped in December as Omicron Cases Raged

U.K. retail sales sank in December, sharply missing analysts' forecasts, as the nation witnessed surging Covid-19 cases and tightened social-distancing guidance.

Retail sales volumes dropped 3.7% from a month earlier, the Office for National Statistics said Friday. Economists polled by The Wall Street Journal had forecast a more modest decline of 0.6%.


Fed Launches Review of Possible Central Bank Digital Currency

WASHINGTON-The Federal Reserve on Thursday launched a review of the potential benefits and risks of issuing a U.S. digital currency, as central banks around the world experiment with the potential new form of money to keep pace with private-sector payments innovations.

Fed officials have been divided on the matter, making it unlikely they will decide soon on whether to create a digital dollar. Unlike private cryptocurrencies like bitcoin, a Fed version would be issued by and backed by the U.S. central bank, a government entity, as are U.S. paper dollar bills and coins.


Why Omicron's Milder Infections Are Straining U.S. Hospitals

The fast-spreading Omicron variant has fueled a rise in Covid-19 cases to levels far beyond any recorded in the U.S. since the start of the pandemic. But there is a growing body of evidence that infections from the Omicron variant are less severe than previous variants. So why are hospitals in some parts of the country stretched to capacity?

A preliminary study released last week, conducted by Kaiser Permanente and funded by the U.S. Centers for Disease Control and Prevention, showed "substantially reduced risk of severe clinical outcomes in patients who are infected with the Omicron variant compared with Delta," said Dr. Rochelle Walensky, director of the CDC. The study by Kaiser, a California-based hospital and health-insurance company, examined nearly 70,000 Covid-19 cases in Southern California from Nov. 30 to Jan. 1. It found rates of hospitalization, admission to intensive-care units, mechanical ventilation and death were all substantially lower in patients infected with Omicron. Hospital stays were also shorter.


Blinken to Meet Russia's Foreign Minister Amid Ukraine Border Crisis

KYIV, Ukraine-As Secretary of State Antony Blinken prepares for a high-stakes meeting with Russian counterpart Sergei Lavrov on Friday, Ukraine's foreign minister warned that his country's soldiers and civilians could "pay with their blood" for any delays to a sanctions package that could be imposed on Moscow immediately should it choose to invade.

The meeting in Geneva follows a string of meetings Mr. Blinken's deputy, Wendy Sherman, held earlier this month with European allies and her Russian counterpart at NATO's headquarters, followed by more gatherings Mr. Blinken held this week in Kyiv and Berlin.


Afghans Housed at Military Base in Kosovo Risk Being Denied Entry to U.S. for Alleged Terrorist Ties

WASHINGTON-Afghan evacuees housed on a U.S. military base in Kosovo are at risk of being denied entry to the U.S. because of their alleged links to the Taliban and other terrorist groups, U.S. officials have said, potentially leaving them without a home country.

Fewer than 10 Afghans have been declared ineligible for entry after security officials found disqualifying information about them during an extensive vetting process, according to a person familiar with the issue. About 90 other individuals continue to be vetted at the Camp Bondsteel base in Kosovo, according to administration officials.


Biden Seeks to Reassure Ukraine, Vowing a Strong Response to Russia and Transferring Weapons

President Biden said Thursday that any Russian troop movement into Ukraine would be considered an invasion, seeking to clear up confusion over his position on a potential incursion as the administration gave approval for U.S.-made weapons to be transferred to Kyiv.

"I've been absolutely clear with [Russian] President [Vladimir] Putin. He has no misunderstanding," Mr. Biden said at a White House event. "If any-any-assembled Russian units move across the Ukrainian border, that is an invasion."


Write to



Nothing major scheduled

Economic Indicators (ET):

0830 Nov Retail trade

0830 Dec New Housing Price Index

Stocks to Watch:

Zymeworks' Stock Falls Following Restructuring Plan That Calls for Deep Job Cuts

Zymeworks Inc. slid nearly 10%, to $12.17, a day after disclosing a restructuring that targets cutting at least 25% of jobs by year's end.

The restructuring, days into Kenneth Galbraith's term as chief executive, amounts to a reset of the company's strategy to focus on its product candidate, zanidatamab (formerly known as ZW25), and its second product candidate, ZW49.

As part of the restructuring, half of the company's senior management team have left or are leaving, including Scientific Chief Anthony Polverino, who played a key role in setting and driving Zymeworks' R&D strategy; Commercial Chief James Priour; and People Chief Kathryn O'Driscoll.

"A smaller, more focused workforce is essential for us to improve our operating performance and accomplish our key priorities in a more cost-efficient manner," Mr. Galbraith said.

The Canadian clinical-stage biopharmaceutical company said it ended 2021 with about $250 million in cash and short-term investments, which it said should be enough to cover its operations through at least late 2022. Zymeworks is slated to report fourth-quarter results in late February.

Other News:

No items published

Market Talk:

No items published


Expected Major Events for Friday

00:01/UK: Jan UK Consumer Confidence Survey

05:00/JPN: Dec Steel Production

07:00/UK: Dec UK monthly retail sales figures

13:30/CAN: Dec New Housing Price Index

13:30/CAN: Nov Retail trade

13:30/US: U.S. Weekly Export Sales

15:00/US: Dec Leading Indicators

All times in GMT. Powered by Kantar Media and Dow Jones.


Expected Earnings for Friday

Ally Financial Inc (ALLY) is expected to report $1.95 for 4Q.

Ames National (ATLO) is expected to report for 4Q.

Bank of the James Financial Group Inc (BOTJ) is expected to report for 4Q.

Bridgford Foods Corp (BRID) is expected to report for 4Q.

Chemung Financial (CHMG) is expected to report $1.26 for 4Q.

Chino Commercial Bancorp (CCBC) is expected to report for 4Q.

Colony Bankcorp (CBAN) is expected to report $0.41 for 4Q.

FIGS Inc (FIGS) is expected to report for 4Q.

First Hawaiian Inc (FHB) is expected to report $0.47 for 4Q.

Flywire Corp (FLYW) is expected to report for 4Q.

Greene County Bancorp (GCBC) is expected to report for 2Q.

Huntington Bancshares (HBAN) is expected to report $0.30 for 4Q.

MetroCity Bankshares Inc (MCBS) is expected to report $0.66 for 4Q.

Paymentus Holdings Inc (PAY) is expected to report for 4Q.

Prudential Bancorp Inc (PBIP) is expected to report $0.22 for 1Q.

Schlumberger (SLB) is expected to report $0.39 for 4Q.

Toast Inc (TOST) is expected to report for 4Q.

Unity Bancorp Inc (UNTY) is expected to report $0.86 for 4Q.

Wayne Savings Bancshares Inc (WAYN) is expected to report for 4Q.

Powered by Kantar Media and Dow Jones.



Advanced Micro Devices Cut to Neutral From Overweight by Piper Sandler

Ameresco Raised to Outperform From Market Perform by Raymond James

American Assets Trust Cut to Neutral From Buy by Mizuho

Ashland Global Holdings Cut to Equal-Weight From Overweight by Wells Fargo

Ball Corp Cut to Equal-Weight From Overweight by Morgan Stanley

Burlington Stores Cut to Sell From Hold by Loop Capital

Calithera Biosciences Raised to Outperform From Market Perform by SVB Leerink

Carvana Cut to Sector Weight From Overweight by Keybanc

CME Group Raised to Neutral From Sell by Rosenblatt

Consolidated Edison Cut to Sell From Neutral by Guggenheim

EOG Resources Price Target Raised to $110.00/Share From $108.00 by Keybanc

Essential Props Realty Cut to Neutral From Buy by B of A Securities

Essential Props Realty Cut to Neutral From Buy by Mizuho

Etsy Raised to Overweight From Sector Weight by Keybanc

Evolus Raised to Buy From Hold by Truist Securities

Evoqua Water Technologies Raised to Outperform From Perform by Oppenheimer

First Community (SC) Cut to Market Perform From Outperform by Raymond James

Ford Motor Cut to Hold From Buy by Jefferies

Getty Realty Cut to Underperform From Neutral by B of A Securities

Hawaiian Electric Raised to Neutral From Sell by Guggenheim

Holly Energy Partners Cut to Underweight From Equal-Weight by Barclays

Hudson Pacific Properties Cut to Underperform From Neutral by Mizuho

International Paper Cut to Neutral From Buy by B of A Securities

Kilroy Realty Raised to Buy From Neutral by Mizuho

Magellan Midstream Cut to Equal-Weight From Overweight by Barclays

Northwest Natural Raised to Neutral From Sell by Guggenheim

Paramount Group Raised to Buy From Neutral by Mizuho

PetMed Express Raised to Buy From Neutral by Sidoti & Co.

Safehold Cut to Neutral From Buy by Mizuho

Sealed Air Raised to Overweight From Equal-Weight by Morgan Stanley

Shell Midstream Partners Cut to Equal-Weight From Overweight by Barclays

Silvergate Capital Raised to Buy From Neutral by Goldman Sachs

South Jersey Industries Cut to Neutral From Buy by Guggenheim

Spire Inc Cut to Neutral From Buy by Guggenheim

Tenet Healthcare Raised to Strong Buy From Outperform by Raymond James

UiPath Raised to Outperform From Perform by Oppenheimer

United Parcel Service Raised to Neutral From Underperform by Exane BNP Paribas

US Bancorp Cut to Market Perform From Outperform by Keefe, Bruyette & Woods

Ventas Raised to Buy From Neutral by Mizuho

Vertex Pharmaceuticals Raised to Outperform From Market Perform by BMO Capital

VF Corp Cut to Hold From Buy by Williams Capital

Vroom Raised to Overweight From Sector Weight by Keybanc

W. P. Carey Raised to Neutral From Underperform by B of A Securities

Walmart Cut to Sector Weight From Overweight by Keybanc

Welltower Raised to Buy From Neutral by Mizuho

WestRock Cut to Neutral From Buy by B of A Securities

World Fuel Services Raised to Buy From Underperform by B of A Securities

WW International Cut to Underweight From Sector Weight by Keybanc

Zynga Cut to Neutral From Buy by BTIG

This article is a text version of a Wall Street Journal newsletter published earlier today.


(END) Dow Jones Newswires

January 21, 2022 06:15 ET (11:15 GMT)

Copyright (c) 2022 Dow Jones & Company, Inc.