MBA Weekly Mortgage Applications Survey; Johnson Redbook Retail
Sales Index; FRB New York President John Williams speaks at New
York Fed Web Series on Culture; Services PMI for June; ISM Report
On Business Services PMI for June; Job Openings & Labor
Turnover Survey for May; Global Services PMI for June; Federal Open
Market Committee meeting minutes and economic forecast; API Weekly
Statistical Bulletin; Canada Official International Reserves
Stock futures inched lower ahead of minutes from the Federal
Reserve that will be scrutinized for insights into the state of the
economy and the central bank's efforts to tame inflation through
Stocks have edged up in recent days, as some investors shifted
their views about the aggressiveness of central bank tightening as
economic growth and consumer sentiment weakened. Markets are
beginning to price in a pivot on policy from the Fed, despite
inflation still being at a more than a four-decade high.
"Over the last couple of days, markets priced out some of the
hawkishness that they were expecting for the Fed. What's going to
be interesting is to see whether the Fed in the short term will try
to push back," Carmignac said. "At least for the foreseeable
future, it's all about inflation."
Investors will also look to data on the services sector.
"We are awaiting some kind of short-term rebound because the
movement has been extremely quick from a historical point of view,"
"The hope is that central banks, to some extent, are stopping
hiking rates and entering into a wait-and-see approach" to assess
how much economic growth and corporate earnings are being affected,
Overseas, European stocks bounced back after heavy losses in the
previous trading session, while most major benchmarks in Asia
Employers in the U.S. are expected to have added 290,000 jobs in
June, down from 390,000 in May, but still a solid increase, Citi
said. The bank expects a 0.4% increase in average hourly earnings
and a drop in the unemployment rate to 3.5%, data that should
encourage the Federal Reserve to proceed with another interest rate
increase of 75 basis points in July, it said.
"June is likely too soon to see much slowing in labor demand,
but markets could be particularly sensitive to a downside surprise
given other recently softer activity data," Citi said. U.S. June
employment report is due Friday. Economists polled by The Wall
Street Journal expect payrolls to increase by 250,000.
The U.S. economy was in a technical recession in the second
quarter as GDP is expected to have contracted by 0.3% from April to
June after falling 1.5% in 1Q, High Frequency Economics said.
Economic data initially showed strong positive momentum for the
economy in 1H--with a surprising disconnect between consumer
confidence and spending--but May's income and spending report
showed not only a decline in real spending that month but also
downward revisions to readings going back to January, it said.
"Based on the new information and our forecast for June, we
expect an even slower 1.0% rise in consumption in 2Q," the
economic-research consultancy said.
Citi's global supply chain pressure index posted its first
meaningful decline since January. The good news is that the retreat
in the index suggests that pressures in the global goods sectors,
which have been a central driver of inflation, might be easing, it
The bad news is that this looks to be occurring on the back of
weaker global consumer demand for goods, especially for
discretionary goods, and thus might signal rising recession risks,
Citi warned. "This is hardly an all clear signal for supply
chains," it said. There are many risks still in play, such as
pandemic-related disruptions and economic challenges from the
Russia-Ukraine war, Citi said.
Traditional safe-haven currencies of the dollar, Swiss franc and
Japanese yen should continue to outperform in the near term on
fears over weaker global economic growth, MUFG Bank said.
Price action in the currency market is "being increasingly
driven by safe haven demand as fears over a sharper
slowdown/recession for the global economy continue to intensify,"
it said. "Those intensifying growth fears are clearly evident now
across a wide range of financial markets."
EUR/USD may fall further after breaking below critical support
at 1.0350 on Tuesday, based on technical charts, said UOB.
This break has been accompanied by solid downward momentum, and
EUR/USD is likely to weaken further within these couple of
While round-number levels of 1.0200 and 1.0100 could offer some
support, the key level to monitor is 1.0000. Only a break above
declining trendline resistance and the 55-day exponential moving
average, both of which are near 1.0510, would signal EUR/USD's
downtrend from earlier this year has stabilized, UOB said.
Oil prices recovered some of the previous session's steep losses
in early trading with SPI Asset Management suggesting Tuesday's
price action "seemed to point to positioning and recession
probabilities getting brought forward due to Europe's doomsday
Energy derivatives are likely to outperform base metals in the
current weak macro environment, UBS said. The Russia-Ukraine war
will likely continue to have a greater impact on energy vs. metal
prices, with the EU's push to decrease its dependence on energy
supply from Russia keeping prices buoyant, the bank said.
As the global economy moves beyond the Covid-19 pandemic, global
consumption may also shift toward travel and services, which are
energy-intensive compared with consumer-discretionary goods that
have been a major focus of pandemic spending, UBS said.
Base metals were mixed in Europe and gold a touch higher, with
CBA saying "industrial metal prices will likely continue to react
the most negatively to global growth fears, rising interest rates
and a surging dollar."
TODAY'S TOP HEADLINES
Batteries Become Do-Or-Die for Air-Taxi Startups
The dream of electric air taxis has always depended on the
reality of batteries. With money for moonshots drying up, investors
may be wise to focus on today's technology rather than
Vertical Aerospace, a British startup focused on electric
vertical takeoff and landing aircraft, or eVTOL, will source
batteries from cell supplier Molicel for its VX4 model-a move which
hasn't previously been reported. The Taiwan-owned manufacturer has
already made the prototype lithium-ion cells that Vertical will
use. It will open a new gigafactory to fulfill the orders, and said
it has secured key raw materials such as lithium and graphite.
Highflying Cyber Firms Cut Staff After Raising Hundreds of
Millions of Dollars
Companies that help businesses battle hackers and comply with
privacy regulations now face a potentially more formidable
adversary: market turmoil.
About 1,400 workers have been laid off since late May from cyber
and privacy firms, many of which raised hundreds of millions of
dollars in recent years. OneTrust LLC laid off about 950 people
last month after touting a $5.3 billion valuation in 2020. IronNet
Inc., led by a former head of the National Security Agency, laid
off 55 workers in June after raising nearly $137 million in gross
proceeds when it went public last year.
Amazon Strikes Partnership Deal with Grubhub That Could Include
Small Equity Stake
Amazon.com Inc. agreed to add Grubhub to its suite of Prime
services in the U.S., in a deal that also gives the e-commerce
giant the option to acquire a small stake, the parent of the
food-ordering company said.
Grubhub's parent, Netherlands-based Just Eat Takeaway.com NV,
said Amazon has an initial option to take a 2% stake in U.S.-based
Grubhub, and U.S. Prime members can have their delivery fees waived
from select restaurants. Amazon could bump up its total stake to
15% of Grubhub based on performance terms focused on adding new
customers, Just Eat said.
Crypto Broker Voyager Digital Files for Bankruptcy
Cryptocurrency broker Voyager Digital Ltd. said that it has
filed for Chapter 11 bankruptcy protection, days after it suspended
withdrawals and trading on its platform amid growing turmoil in
The company said that it has initiated Chapter 11 restructuring
in New York, where it is based, and will seek recognition of the
case in Canada, where it is listed.
Tiger Global's Flagship Hedge Fund Has First Gain Since
Tiger Global Management eked out a 3.4% gain in June in its
flagship hedge fund, according to a person familiar with the firm,
in what marks the fund's first gain since October. Still, the hedge
fund remains down 50.1% for the first half of the year, worse than
losses notched by major stock-market indexes and other large hedge
funds investing in growth.
The figure was a flash estimate Tiger shared with investors
Tuesday evening and didn't include any commentary. In comparison,
the tech-laden Nasdaq Composite lost 8.7% in June including
dividends; the S&P 500 lost 8.3% including dividends.
FDA Suspends Ban on Juul While Vaping Company Appeals
The Food and Drug Administration said it would suspend its ban
on Juul Labs Inc.'s products while the e-cigarette maker appeals
the agency's decision.
The FDA in June ordered the vaping company to pull its
e-cigarettes off the U.S. market, saying Juul hadn't submitted
sufficient evidence that they were safe. A federal appeals court
then granted Juul a temporary stay of the order, and Juul was
asking the court for a longer stay to continue selling its
e-cigarettes for the duration of the appeal process. Juul
separately had asked the FDA to stay its own order pending the
Spirit Airlines Prevails in Battle for Newark Airport
The U.S. Department of Transportation awarded Spirit Airlines
Inc. rights to operate flights at Newark-Liberty International
Airport at the busiest times of day, capping more than two years of
The dispute arose after Southwest Airlines Co. pulled out of
Newark in 2019, sparking a turf war among rival airlines at the
congested New Jersey hub. Low-cost airlines including Spirit saw a
rare chance to expand their footprint at the airport and add
flights at peak times of day, which they previously hadn't been
able to do.
Nasdaq, NYSE Win Court Battle With SEC Over Market Data
A federal court partly rejected a Securities and Exchange
Commission plan to loosen the control that stock exchanges have
over public market-data feeds, handing a victory to Nasdaq Inc. and
the New York Stock Exchange.
In a ruling released Tuesday, a three-judge panel of the U.S.
Court of Appeals for the District of Columbia Circuit found that
the SEC had exceeded its authority under federal law when it issued
a 2020 order overhauling the governance of the data feeds.
Walmart Tells Suppliers New Fuel and Pickup Fees Are Coming
Walmart Inc. said it would charge some of its suppliers a new
fee to transport goods to its warehouses and stores, according to a
memo viewed by The Wall Street Journal, the latest example of how
businesses are looking to offset rising costs for things such as
transportation and fuel.
Companies that use Walmart to transport goods to the retailer's
warehouses and stores will be charged a fuel surcharge and a
"collect pickup charge" starting Aug. 1, said the memo. The shift
"is a result of Walmart adapting to the significant transformation
and increased cost seen in the transportation industry over the
past few years," said the memo sent to suppliers last Friday.
German Manufacturing Orders Unexpectedly Rose in May
German manufacturing orders increased slightly in May, beating
forecasts for a decline amid rising producer prices and supply
Manufacturing orders rose 0.1% on month in adjusted terms,
according to data from the German Economics Ministry released
Malaysia's Central Bank Raises Benchmark Interest Rate as
Malaysia's central bank raised its benchmark interest rate amid
rising inflation and signs that the country's economy is
Bank Negara Malaysia on Wednesday raised its overnight policy
rate by 25 basis points to 2.25%. The decision was expected by all
eight economists previously polled by The Wall Street Journal.
Derby's Take: Once Again, Bond Yields Have Ominous Message on
The U.S. Treasury market sent out another warning signal about
the U.S. economic outlook Tuesday.
The difference between the two-year and 10-year Treasury notes
turned negative-it was at negative one basis point at 5 p.m.
E.T.-and created what's called an inversion of the yield curve.
That is when the normally positive relationship between these two
yields flips, and it is a key metric for market participants, as
yield curve inversions have a very strong track record of
Norway's Government Ends Strike After European Gas Prices
The Norwegian government stepped in to end a strike that
threatened to more than halve the country's gas exports, saying it
was causing widespread risks to energy security.
Before the strike was halted, a benchmark for gas futures
contracts in northwestern Europe rose as much as 14% to EUR172.88,
or about $180, a megawatt-hour Tuesday, the highest level since
March. Electricity prices across the region also rose, as many
power plants run on gas.
OPEC Secretary-General Mohammed Barkindo Dies
Mohammed Barkindo, who transformed the role of OPEC
secretary-general and oversaw an expansion of the oil-producing
group's role in the markets, has died. He was 63 years old.
Mr. Barkindo's unexpected death on Tuesday night came just a few
weeks before he was due to end his six-year tenure at the top of
the Organization of the Petroleum Exporting Countries.
NATO Advances Sweden, Finland Toward Membership as Fighting
Rages in Eastern Ukraine
Russian artillery pounded Sloviansk, one of Ukraine's last lines
of defense to protect the remaining Kyiv-held strongholds in
eastern Ukraine, while the North Atlantic Treaty Organization on
Tuesday advanced plans to add Sweden and Finland to the
Vadim Lyakh, the mayor of Sloviansk, reported "massive shelling"
of the city in a Facebook post and said the central market was on
fire. Pavlo Kyrylenko, head of military administration in the
eastern region of Donetsk, said on Telegram that at least two
people died and seven were injured.
U.N. Atomic Chief Warns of Growing Nuclear Risks
The head of the United Nations nuclear agency gave a sharp
warning Tuesday about growing nuclear risks, saying that Iran's
activities risked a regional nuclear arms race and that Russia's
occupation of Ukrainian nuclear sites threatened to imperil the
agency's ability to ensure nuclear material wasn't being
In a wide-ranging speech at the Australian National University
in Canberra, Rafael Grossi, the head of the International Atomic
Energy Agency, warned that "we are reaching a defining moment for
global nuclear nonproliferation," in which the risks of the spread
of nuclear weapons "pose a problem for everyone."
Biden Administration Sues Arizona Over Proof-of-Citizenship
The Biden administration on Tuesday sued Arizona, saying the
state violates federal law by requiring proof of citizenship to
vote for president.
In its latest challenge to Republican-backed changes to state
voting procedures, the Justice Department said Arizona's newly
enacted requirement that residents provide documentary proof of
citizenship would keep eligible voters from participating in
certain federal elections.
U.S. State Department Names New Global Anticorruption
The U.S. State Department has named a sanctions and nuclear
weapons expert as its coordinator for global anticorruption
efforts, a position created after the Biden administration pledged
to fight more vigorously against corruption.
It will be a return stint at the State Department for Richard
Nephew, who most recently was a senior research scholar at Columbia
University's Center on Global Energy Policy in New York, the
department said on Tuesday.
Highland Park Parade Shooting Suspect Charged With First-Degree
A 21-year-old man who police said fired more than 70 rounds from
a rooftop into a crowd gathered for a Fourth of July parade in the
Chicago suburb of Highland Park, Ill., was charged with seven
counts of first-degree murder.
The suspect, Robert E. Crimo III, allegedly planned the attack
for weeks and dressed as a woman to hide his identity, officials
CERN's Large Hadron Collider Scientists Reveal New Particle
Discovery as Accelerator Research Resumes
The Large Hadron Collider resumed scientific operations on
Tuesday after a three-year hiatus for repairs and upgrades, opening
a new chapter in physicists' longstanding quest to understand the
fundamental building blocks of the universe.
The resumption came shortly after scientists with the European
Organization for Nuclear Research, or CERN-the international body
that operates the collider-announced that earlier research
conducted at the facility revealed three previously unknown
Write to email@example.com TODAY IN CANADA
- Nothing major scheduled
Economic Indicators (ET):
- Nothing major scheduled
Stocks to Watch:
- No items published
No items published
No items published
Expected Major Events for Wednesday
02:00/JPN: Jun Imported Vehicle Sales
06:00/GER: May Manufacturing orders
06:00/GER: May Manufacturing turnover
08:30/UK: Jun S&P Global / CIPS UK Construction PMI
08:30/UK: Jun Narrow money (Notes & Coin) and reserve
11:00/US: 07/01 MBA Weekly Mortgage Applications Survey
12:15/CAN: Jun Official International Reserves
12:55/US: 07/02 Johnson Redbook Retail Sales Index
13:45/US: Jun US Services PMI
14:00/US: Jun ISM Report On Business Services PMI
14:00/US: May Job Openings & Labor Turnover Survey
15:00/US: Jun Global Services PMI
20:30/US: 07/01 API Weekly Statistical Bulletin
23:01/UK: CBI and PwC Financial Services Survey
23:50/JPN: Jun International Reserves / Foreign Currency
23:50/JPN: Jun Provisional Trade Statistics for 1st 20 days of
All times in GMT. Powered by Onclusive and Dow Jones.
Expected Earnings for Wednesday
ASA Gold & Precious Metals Ltd (ASA) is expected to report
BeyondSpring Inc (BYSI) is expected to report $-0.24 for 1Q.
Computer Services Inc (CSVI) is expected to report for 1Q.
Educational Development Corp (EDUC) is expected to report for
Friedman Industries (FRD) is expected to report for 4Q.
Portage Biotech Inc (PBT.U-L,PRTG) is expected to report for
Saratoga Investment (SAR) is expected to report $0.53 for
Simulations Plus Inc (SLP) is expected to report $0.18 for
Trilogy Metals Inc (TMQ,TMQ.T) is expected to report for 2Q.
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ANALYST RATINGS ACTIONS
Antero Resources Raised to Buy From Hold by Truist
Aveanna Healthcare Cut to Hold From Buy by Truist Securities
Crocs Raised to Buy From Hold by Loop Capital
Excelerate Energy Raised to Overweight From Equal-Weight by
HP Cut to In-Line From Outperform by Evercore ISI Group
Live Nation Raised to Outperform From Neutral by Macquarie
Micron Technology Cut to Equal-Weight From Overweight by Fox
PerkinElmer Cut to In-Line From Outperform by Evercore ISI
Talaris Therapeutics Cut to Equal-Weight From Overweight by
This article is a text version of a Wall Street Journal
newsletter published earlier today.
(END) Dow Jones Newswires
July 06, 2022 06:49 ET (10:49 GMT)
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