Weekly Jobless Claims; Existing Home Sales for April; Canada New
House Prices for April; Canada Industrial Product & Raw
Materials Price Indexes for April
Stock futures were lower Thursday, pointing to deeper losses for
U.S. markets on growing worries of an economic slowdown.
International stocks also retreated, with the Stoxx Europe 600
shedding 1.7% and with major Asian benchmarks suffering similar
Earnings reports from some of America's biggest retailers in
recent days added to concern that the highest rate of inflation in
four decades is catching up with U.S. consumers and pitching the
economy toward a recession. Investors were already grappling with
the end of an era of loose monetary policy that had stoked big
gains for stocks and other riskier assets.
The war in Ukraine, meanwhile, is adding to inflationary
pressures prompting the Fed to embark on a series of interest-rate
rises and to reduce its bondholdings. And Covid-19 shutdowns in
China have led to a sharp slowdown in the world's second-biggest
The combination of factors has fed into steep losses for stocks
and some corporate bonds, and many investors expect the volatility
to continue. "The price action suggests it's not over," said Philip
Saunders, a portfolio manager at Ninety One, an asset manager based
in the U.K. and South Africa.
Looking ahead, investors will parse earnings reports from
Kohl's, VF and BJ's Wholesale Club for fresh evidence of how
successfully companies are able to pass higher costs onto
Also coming up are data on home sales in the U.S. The figures
from the National Association of Realtors are expected to show
sales of existing homes fell for a third-straight month in April as
rising mortgage rates and climbing prices cooled the housing
Recent activity data for the U.S. economy refute the message the
economy is at risk of falling into a recession in the short term,
said Capital Economics' chief North America economist Paul
Gains in retail sales point to solid consumer spending, while
the increase in industrial production signals that output expands
robustly once supply-chain bottlenecks ease, Ashworth said.
"With signs that core inflation is still running far too hot,
the continued strength of economic activity supports the Fed's
decision to press ahead with 50 basis point rate hikes at the next
couple of meetings."
However, Capital Economics expects easing inflation and a
slowdown in economic growth will prompt the Fed to shift back to
25bp hikes by fall.
The dollar, largely flat in European trade, won't soften from
its currently high levels until the selloff in risk assets slows
and drives investors away from safe haven assets, said Swissquote
Bank. For that to happen economic data must show an easing of
"We must see softening in energy prices, and ideally an
improvement in global supply chains."
The yield on 10-year Treasury notes edged down to 2.859% from
2.884% Wednesday. The move put yields, which had shot up for much
of the year as the Fed began to raise interest rates, on course to
fall for seven in nine trading days.
Read Barrons.com: Pimco Is Shifting Away From U.S. Bonds as
Growth Slows. Here's What It's Buying Instead.
Oil prices moved higher, with the threat of more sanctions on
Russian supply still the main driver for crude's gains.
Around 2.5 million barrels of Russian oil a day will be affected
by EU's proposed embargo, said ANZ. "Russia will struggle to find
alternative buyers due to constraints on shipping and
infrastructure. OPEC is unlikely to fill the gap, with the group
struggling to raise output in line with its higher quotas."
Gold futures continued to soften in early European trading with
the dollar and 10-year Treasurys remaining more attractive
A lack of liquidity was noted by SPI Asset Management's Stephen
Innes, who said "futures volumes are tracking at around 50% of the
10-day average. The strategic gold buyer continues to offer support
possibly on recession risk."
Base metals managed to recover some losses as signs of lockdowns
easing in China helped relieve recent pressure on prices.
Some Shanghai residents have been able to shop according to
reports, hinting that lockdown restrictions may start to ease and
consumption rates could lift.
ANZ Research said "fiscal stimulus measures and ongoing supply
side issues should see metals markets tighten in the second half of
2022," and help support prices in the medium term.
UBS trimmed its outlook for silver this year, as Fed rate hikes
and a strong dollar keep the pressure on prices.
UBS said prices should fall to $20 a troy ounce by the end of
the year, compared with its $22 forecast previously. It said in
June, prices should fall to $22 from a previous expectation of $25,
and in September to $21 from a previous $23 forecast.
The support to precious metals from the Ukraine war was shorter
than expected, UBS said, adding that the prospect of more
aggressive rate hikes and rising bond yields create further
headwinds for silver. UBS noted that it doesn't advise further
silver long positions.
TODAY'S TOP HEADLINES
Elon Musk's Pursuit of Twitter Leads to Complicated Next Steps
and Legal Questions
In the classic hostile takeover, an aggressive acquirer pursues
a reluctant quarry.
But Elon Musk's bid for Twitter Inc. appears headed to a bizarre
place: Could Twitter force him to buy a company he might not
Tesla Autopilot's Role in Deadly Vehicle Crash Is Probed by
U.S. auto-safety regulators have opened a special crash
investigation into a fatal wreck involving a Tesla Inc. vehicle
that has left three people dead.
The National Highway Traffic Safety Administration disclosed the
probe Wednesday, identifying the vehicle as a 2022 Tesla Model S.
It added the incident to a list of auto crashes it is investigating
that are potentially linked to semiautonomous driving features.
Target, Walmart Earnings Selloff Puts Retailers' Inflation Pains
Inflation is catching up with some of America's biggest
retailers, as their recent quarterly results were pinched by higher
costs on everything from products to fuel.
Investors dumped shares of Walmart Inc., Target Corp. and other
big chains-notching some of the biggest declines since the market
crash of 1987-amid fears that the companies wouldn't be able to
pass along higher prices to consumers. It has also stoked concerns
through financial markets about the resilience of companies that
collectively employ millions of workers in the U.S. and abroad.
Under Armour CEO Patrik Frisk Is Stepping Down
Under Armour Inc. said Patrik Frisk will step down as president
and chief executive two years into the job and as the sportswear
maker is trying to reignite sales.
The Baltimore company named Colin Browne as interim president
and CEO, starting June 1, until a permanent successor is named.
Global Stocks Fall After U.S. Selloff; Futures Edge Down
International stocks retreated, tracking a U.S. selloff, but
muted moves in equity futures suggested American markets could
stabilize in Thursday's trading session.
Futures tied to the technology-heavy Nasdaq-100 stood about 0.3%
lower. Those for the S&P 500 and Dow Jones Industrial Average
both edged down about 0.1%.
High Inflation, Slowing Growth Raise Risk of Global Downturn
The global economy is in danger of entering a period of
so-called stagflation, or high inflation and weak growth, policy
makers and corporate leaders say, which could erode living
standards around the world.
Treasury Secretary Janet Yellen on Wednesday became the latest
leader to warn of turbulence for the global economy. "Certainly the
economic outlook globally is challenging and uncertain," Ms. Yellen
said in Bonn, Germany, ahead of a meeting of leaders of seven
wealthy nations. "Higher food and energy prices are having
stagflationary effects, namely, depressing output and spending and
raising inflation all around the world."
More Crypto Market Turmoil Is Predicted by SEC Chairman Gary
WASHINGTON-Securities and Exchange Commission Chairman Gary
Gensler said Wednesday he worries that more investors will be
harmed in cryptocurrency markets, after this month's implosion of
the stablecoin known as TerraUSD.
"I think a lot of these tokens will fail," Mr. Gensler told
reporters after a House Appropriations Committee panel hearing
Wednesday. "I fear that in crypto...there's going to be a lot of
people hurt, and that will undermine some of the confidence in
markets and trust in markets writ large."
CFTC Signals Intent to Increase Enforcement of Crypto-Related
NEW YORK-The number of cases of alleged digital asset fraud and
manipulation continues to accelerate, the head of the Commodity
Futures Trading Commission said.
"Headlines about the loss of tens of millions of dollars in
digital assets due to protocol exploits, phishing attacks, preying
on vulnerable people and other fraudulent and manipulative schemes
have become far too common," CFTC Chairman Rostin Behnam said
Wednesday in a video message delivered at a crypto industry
conference in New York.
Melvin Capital to Close Funds, Return Cash to Investors
Melvin Capital plans to close its funds and return the cash to
its investors, capping a stunning reversal for a firm that lost big
on the surge in meme stocks last year and on wagers on growth
stocks this year.
In a letter to investors that was reviewed by The Wall Street
Journal, Gabe Plotkin, Melvin's founder, wrote that he reached his
decision after conferring with Melvin's board of directors during a
monthslong process of reassessing his business.
Biden Invokes the Defense Production Act to Increase
The Biden administration is invoking the Defense Production Act
to increase production of baby formula and launching a program that
would use commercial aircraft to pick up overseas formula that
meets U.S. standards, the White House said Wednesday.
Under the Korean War-era national security mobilization law,
President Biden is requiring suppliers to prioritize giving
resources to U.S. formula manufactures. A new program called
Operation Fly Formula would also direct the Defense Department to
use its contracts with commercial air-cargo lines to pick up
formula from other countries that meets U.S. health and safety
standards. The White House didn't specify any countries.
Judges Deal Latest Blow to SEC's In-House Courts
WASHINGTON-Securities regulators can't bring enforcement actions
seeking financial penalties through their in-house courts, a
federal appeals court ruled on Wednesday.
The decision, from a split panel of the U.S. Court of Appeals
for the Fifth Circuit, adds to the legal backlash over
federal-agency tribunals that some critics say violate the
separation-of-powers doctrine. The Securities and Exchange
Commission, one of the biggest and busiest financial regulators,
has been a focal point for the feud. Its enforcers sometimes
litigate cases before administrative law judges who are employees
of the SEC, but are supposed to exercise independent judicial
Beijing Probes Central Banker for Passing Tips to Bond
China's top anticorruption agency is investigating a senior
Chinese central banker for suspected leaking of official economic
statistics, say people with knowledge of the matter, after Beijing
criticized the central bank for not adequately aligning itself with
The Central Commission for Discipline Inspection said Wednesday
that Sun Guofeng, who was until earlier this month head of the
monetary-policy department of the People's Bank of China, is being
investigated for "suspected serious violation of laws and
discipline." It didn't disclose any specifics.
Convicted Insurance Mogul Ordered to Give Up Control of
A North Carolina court has ordered convicted insurance mogul
Greg Lindberg to turn over control of hundreds of his private
companies to a special board in an effort to salvage four
financially troubled insurers that have been under regulatory
supervision since 2019.
The court order concluded that Mr. Lindberg committed fraud in
failing to abide by a 2019 agreement under which North Carolina's
insurance department seized control of the insurers from Mr.
Write to firstname.lastname@example.org TODAY IN CANADA
ATS Automation Tooling 4Q
Canada Goose 4Q
Computer Modelling 4Q
Lightspeed Commerce 4Q
Economic Indicators (ET):
0830 Mar Employment Insurance
0830 Apr New Housing Price Index
0830 Apr Industrial/Raw Material Prices
Stocks to Watch:
Velan 4Q Loss/Shr $1.19; Sales $124.8M
Expected Major Events for Thursday
04:01/US: 3Q Manpower U.S. Employment Outlook Survey
08:30/UK: 1Q Mortgage and landlord possession statistics
08:30/UK: 1Q Mortgage Arrears and Possessions data
09:00/ITA: Mar Balance of Payments
10:00/UK: May CBI Industrial Trends Survey
12:30/US: 05/14 Unemployment Insurance Weekly Claims Report -
12:30/US: May Philadelphia Fed Business Outlook Survey
12:30/CAN: Mar Employment Insurance
12:30/US: U.S. Weekly Export Sales
12:30/CAN: Apr New Housing Price Index
12:30/CAN: Apr Industrial product & raw materials price
13:00/RUS: Weekly International Reserves
14:00/US: 1Q Quarterly Retail E-Commerce Sales
14:00/US: Apr Leading Indicators
14:00/US: Apr Existing Home Sales
14:30/US: 05/13 EIA Weekly Natural Gas Storage Report
20:30/US: Federal Discount Window Borrowings
20:30/US: Foreign Central Bank Holdings
23:01/UK: May UK Consumer Confidence Survey
23:30/JPN: Apr CPI (Nation), CPI ex-food (Nation)
All times in GMT. Powered by Kantar Media and Dow Jones.
Expected Earnings for Thursday
ATS Automation Tooling Systems Inc (ATA.T) is expected to report
$0.32 for 4Q.
Advanced Drainage Systems Inc (WMS) is expected to report $0.58
Apollo Investment Corp (AINV) is expected to report $0.34 for
Applied Materials Inc (AMAT) is expected to report $1.90 for
Armstrong Flooring Inc (AFI) is expected to report $-0.26 for
BJ's Wholesale Club Holding Inc (BJ) is expected to report $0.72
Badger Meter Inc (BMI) is expected to report $0.51 for 1Q.
Bit Digital Inc (BTBT) is expected to report for 1Q.
CAE Inc (CAE,CAE.T) is expected to report $0.22 for 4Q.
Canada Goose Holdings Inc (GOOS,GOOS.T) is expected to report
$0.00 for 4Q.
Cato Corp (CATO) is expected to report for 1Q.
ClearOne Inc (CLRO) is expected to report for 1Q.
Computer Modelling Group Ltd (CMG.T) is expected to report $0.06
Deckers Brands (DECK) is expected to report $1.25 for 4Q.
Eagle Materials Inc (EXP) is expected to report $1.67 for
Flowers Foods Inc (FLO) is expected to report $0.40 for 1Q.
Heroux-Devtek (HRX.T) is expected to report $0.23 for 4Q.
ICPEI Holdings Inc (ICPH.V) is expected to report for 1Q.
Kayne Anderson Energy Infrastructure Fund Inc (KYN) is expected
to report for Full year.
Kohl's Corp (KSS) is expected to report $0.77 for 1Q.
Lightspeed Commerce Inc (LSPD.T) is expected to report for
MEI Pharma Inc (MEIP) is expected to report $-0.18 for 3Q.
Monro Inc (MNRO) is expected to report $0.44 for 4Q.
National Energy Services Reunited Corp (NESR) is expected to
report $0.11 for 1Q.
NorZinc Ltd (NZC.T) is expected to report for 1Q.
Palo Alto Networks Inc (PANW) is expected to report $-1.18 for
Plantronics Inc (POLY) is expected to report $-0.05 for 4Q.
Polymet Mining Corp (PLM,POM.T) is expected to report for
Replimune Group Inc (REPL) is expected to report $-0.58 for
Republic First Bancorp (FRBK) is expected to report $0.09 for
Ross Stores Inc (ROST) is expected to report $0.99 for 1Q.
Singularity Future Technology Ltd (SGLY) is expected to report
Skillsoft Corp (SKIL) is expected to report for 1Q.
TeraWulf Inc (WULF) is expected to report for 1Q.
The Children's Place Inc (PLCE) is expected to report $1.28 for
ThermoGenesis Holdings Inc (THMO) is expected to report for
Three Valley Copper Corp (TVC.V) is expected to report for
VF Corp (VFC) is expected to report $0.45 for 4Q.
ePlus Inc (PLUS) is expected to report $0.69 for 4Q.
Powered by Kantar Media and Dow Jones.
ANALYST RATINGS ACTIONS
AeroVironment Raised to Outperform From Sector Perform by RBC
Cardinal Health Raised to Outperform From In-Line by Evercore
Carrier Global Cut to Neutral From Buy by B of A Securities
Century Aluminum Cut to Peer Perform From Outperform by Wolfe
Comstock Resources Cut to Underweight From Neutral by Piper
Endeavor Group Holdings Raised to Buy From Neutral by Goldman
Ginkgo Bioworks Holdings Cut to Underperform From Neutral by B
of A Securities
Great Ajax Raised to Buy From Neutral by Compass Point
Hanmi Fincl Cut to Neutral From Buy by DA Davidson
Hope Bancorp Cut to Neutral From Buy by DA Davidson
Mercury Systems Raised to Outperform From Sector Perform by RBC
Penn National Gaming Raised to Buy From Hold by Jefferies
Salesforce Raised to Buy From Neutral by Roth Capital
Ventas Raised to Outperform From Neutral by Credit Suisse
VSE Cut to Sector Perform From Outperform by RBC Capital
Warby Parker Cut to Neutral From Buy by Goldman Sachs
World Fuel Services Raised to Buy From Hold by Stifel
This article is a text version of a Wall Street Journal
newsletter published earlier today.
(END) Dow Jones Newswires
May 19, 2022 05:31 ET (09:31 GMT)
Copyright (c) 2022 Dow Jones & Company, Inc.