MARKET WRAPS
Watch For:
Employment Trends Index for July.
Opening Call:
Stock futures edged up, starting the week on a positive note
ahead of a slew of earnings reports that are expected to provide
some insight into the impact of higher inflation on companies and
consumers.
Stocks have swayed in recent days, buffeted by shifting views on
central bank policy. Last Friday's better-than-expected jobs report
divided investors and analysts. Some raised concerns that the
Federal Reserve could continue raising interest rates aggressively,
while others questioned whether the economy could really be in
recession.
"Markets are still digesting the payrolls report from Friday.
When you see what's happening in the labor market, this doesn't
look like a recession in the sort of broad sense," said Kiran
Ganesh, a multiasset strategist at UBS. "Investors seem to be in
the mood to listen to the good news."
Trading volumes also tend to be lower in August while many
traders take summer vacations, which can drive outsize moves,
analysts said. For those still in the office, investors are
awaiting inflation data for July out on Wednesday, a key release
which is expected to provide more direction for markets.
"What we infer from the bond market is that investors are
positioning for a slowdown. Bond markets have started to
increasingly price in a higher chance of a 75-basis-point hike in
September," said Karim Chedid, an investment strategist at
BlackRock.
"Despite this, equities have somewhat held up. I think the
reasons for it have to do with better-than-expected earnings so far
this season," Mr. Chedid said.
Companies including Palantir Technologies, Dominion Energy and
Tyson Foods are scheduled to report earnings Monday morning ahead
of the opening bell. Videogame firm Take-Two Interactive Software,
vaccine-maker Novavax, insurer American International Group and
News Corp, which owns The Wall Street Journal, are slated for after
markets close.
In premarket trading, Berkshire Hathaway rose 0.7% after
reporting quarterly results over the weekend. The investment firm's
operating earnings, CEO Warren Buffett's preferred metric, rose
although the company posted a net loss.
Tesla rose 3% premarket. The Senate passed a bill on Sunday to
spend billions of dollars on climate, including the extension of a
tax incentive for electric vehicles. Signify Health jumped 15%
after The Wall Street Journal reported that drugstore chain CVS
Health is planning to bid for the company.
Overseas, stocks in Europe were up while major benchmarks in
Asia were mixed.
Forex:
Friday's unexpectedly strong jobs data has caused short-term
Treasury yields to rise and markets to price in a higher terminal
rate (or peak) for interest rates, which should help the dollar
strengthen further, MUFG said.
"There is room for the U.S. dollar to rebound further in the
near-term," the bank said.
The rate market is now pricing a higher probability of a third
75 basis-point interest-rate rise in September, while ISM surveys
and the "blow out" July jobs data have eased recession fears, MUFG
said.
Energy:
Oil prices ticked higher, supported by economic data from China.
China's exports grew at a faster-than-expected pace last month,
suggesting the major economy isn't yet feeling the impact of a
slowdown in Western economies.
Meanwhile, Russia-related supply risks will put a floor under
prices, Capital Economics said. A limited supply increase from
OPEC+ means the oil market is likely to remain tight and prices
should remain close to $100 a barrel, the economic-research firm
said.
Metals:
Metals prices inched up Monday after China reported
better-than-expected export figures for July. China's exports and
trade surplus both beat expectations with the former 18% higher in
dollar terms and the trade surplus hitting $101.3 billion in
July.
China's trade figures ease some concerns over falling global
demand, weighed down by rising prices and higher interest rates,
Stephen Innes, managing partner at SPI Asset Management said.
However, Innes added that manufacturing data still remains weak,
weighing on commodity prices for now.
---
Steel prices are expected to reach their near-term floor, Citi
said. Steel-producer margins in China are already negative, while
in Europe, spot-based price margins for producers are also starting
to turn negative, the bank said.
Negative steel margins usually precede production cuts and a
rebalancing of supply, it noted. Steel prices typically recover
when cuts to supply accelerate, though the scale of the rebound
will depend on the overall recovery in demand for steel, Citi
said.
Although European producers are expected to remain highly
profitable in the second half of the year due to contracted steel
prices and hedged energy costs, they are still seen implementing
production cuts, the bank said.
TODAY'S TOP HEADLINES
SoftBank Reports Record $23 Billion Quarterly Loss as Tech
Downturn Hits
TOKYO-Japanese technology investor SoftBank Group Corp. on
Monday reported a record quarterly loss of more than $23 billion
after its Vision Fund investments suffered from the global selloff
in technology shares.
The April-June loss was about 1 1/2 times the previous record
set just three months earlier in the January-March quarter.
UPS to Buy Italian Healthcare-Logistics Provider Bomi Group
United Parcel Service Inc. agreed to acquire Italy's Bomi Group,
as the transportation giant looks to bolster its
medical-product-distribution business.
UPS didn't disclose the sale price. The Wall Street Journal
previously reported that the deal was worth several hundred million
dollars, according to people familiar with the matter.
Carlyle Chief Executive to Step Down
Carlyle Group Inc. Chief Executive Kewsong Lee is leaving the
private-equity firm, as it struggles to expand and its shares
lag.
Carlyle said late Sunday after The Wall Street Journal inquired
about the matter that Mr. Lee will step down as CEO immediately and
will leave the firm when his five-year employment agreement ends at
the end of this year. William Conway, a co-founder and former
co-CEO of the firm, will serve as interim chief executive until a
permanent successor can be found.
Two Chinese Cities Approve Baidu's Unmanned Self-Driving
Taxis
SINGAPORE-China took a notable regulatory step in the field of
driverless taxis, with two cities giving Baidu Inc. approval to
operate ride-hailing services without a driver or a person
overseeing safety in the vehicle.
The Chinese search-engine giant, which already operates
self-driving taxis, plans to add five unmanned cars each to the
cities of Wuhan and Chongqing, it said. These vehicles will run in
designated areas of those cities during the daytime, when there
tends to be more traffic on the road, the company said. The
approvals also allow Baidu to charge users for the rides, it
said.
Oz Minerals Rejects BHP Takeover Proposal
ADELAIDE, Australia-Oz Minerals Ltd. on Monday rejected a
nonbinding takeover proposal from BHP Group Ltd. that values the
Australian copper-and-gold mining company at almost 8.4 billion
Australian dollars (US$5.8 billion), calling the approach highly
opportunistic following a fall in copper prices.
Adelaide-based Oz Minerals said it received on Friday the
unsolicited and conditional proposal from the world's largest
mining company by market value to acquire its shares for A$25.00
each. Its stock last traded at A$18.92 a share.
Senate Passes Democrats' Climate, Healthcare and Tax Bill
WASHINGTON-The Senate passed a bill spending hundreds of
billions of dollars on climate and healthcare programs while
raising taxes on large, profitable companies, as Democrats unified
around elements of President Biden's agenda after a year of
frustrated efforts to advance a broader package.
The legislation, which passed the Senate 51-50 on Sunday with a
tiebreaking vote by Vice President Kamala Harris, offers tax
incentives for reducing carbon emissions, seeks to allow Medicare
to negotiate the price of some prescription drugs, allots roughly
$80 billion to the Internal Revenue Service and extends subsidies
for health insurance under the Affordable Care Act.
Israel, Palestinian Militants Agree to Cease Fire After Three
Days of Fighting
JERUSALEM-Israel and Gaza militant group Islamic Jihad agreed to
a cease-fire late Sunday after three days of fighting that saw more
than 40 Palestinians killed and rockets fly deep into Israel's
heartland, in the most intense exchange of fire since an 11-day
conflict last year.
The cease-fire, brokered by Egypt and the United Nations, came
into effect at 11:30 p.m. local time, Israeli, Palestinian and
Egyptian officials said.
Former Colombia Rebel Gustavo Petro Inaugurated as President
BOGOTÁ, Colombia-Gustavo Petro, a former member of a leftist
guerrilla group that had fought the Colombian state, was
inaugurated Sunday as president, a change in a country with a
history of guerrilla wars that have stifled its modernization and
polarized its people.
Standing before tens of thousands of supporters in Bogotá's
colonial central square, the 62-year-old Mr. Petro pledged that he
would work to lower poverty and hunger in this country of 50
million and secure peace by engaging in talks with several armed
groups. He also laid out a platform to redistribute wealth,
modernize a poor countryside and adopt environmentally friendly
economic policies.
China's War Games Showcase New Tools to Intimidate Taiwan
HONG KONG-China wrapped up four days of live-fire and combat
exercises that showcased its growing offensive capabilities against
Taiwan and updated Beijing's tool kit for intimidating the island
democracy.
On Sunday, the People's Liberation Army said it conducted joint
training in waters and airspace near the island to test the PLA's
capacity for striking ground targets and engaging in long-range
aerial combat. China Central Television aired footage of the drills
in its evening newscast, showing jet fighters and strategic
bombers, the latter armed with air-to-surface missiles, carrying
out what the state broadcaster described as simulated attacks.
Write to nihad.ahmed@wsj.com TODAY IN CANADA
Earnings:
Altius Minerals Corp 2Q
Barrick Gold Corp 2Q
Capstone Copper Corp 2Q
Coveo Solutions Inc. 1Q
Hudbay Minerals Inc. 2Q
K-Bro Linen Inc. 2Q
MARTINREA Intl Inc. 2Q
Medexus Pharma Inc. 1Q
Taseko Mines Limited 2Q
Titanium Transpt Gp 2Q
Trevali Mining Corp. 2Q
Westport Fuel Sys. 2Q
WSP Global Inc. 2Q
---
Economic Indicators (ET):
None scheduled.
---
Stocks to Watch:
Nexj Systems 2Q Loss/Shr C$0.08; 2Q Loss C$1.69M
Expected Major Events for Monday
04:30/JPN: Jul Corporate Insolvencies
05:00/JPN: Jul Economy Watchers Survey
14:00/US: Jul Employment Trends Index
23:01/UK: Jul BRC-KPMG Retail Sales Monitor
23:50/JPN: Jul Money Stock, Broadly-defined Liquidity
All times in GMT. Powered by Onclusive and Dow Jones.
Expected Earnings for Monday
ANI Pharmaceuticals Inc (ANIP) is expected to report $-0.61 for
2Q.
Acorn Energy (ACFN) is expected to report for 2Q.
Air Industries Group (AIRI) is expected to report for 2Q.
Alpha Metallurgical Resources Inc (AMR) is expected to report
for 2Q.
Assertio Holdings Inc (ASRT) is expected to report for 2Q.
Barrick Gold Corp (ABX.T,GOLD) is expected to report $0.40 for
2Q.
Blue Apron Holdings Inc (APRN) is expected to report for 2Q.
Capstone Copper Corp (CS.T) is expected to report for 2Q.
Ceco Environmental (CECE) is expected to report $0.04 for
2Q.
Chimerix (CMRX) is expected to report $-0.24 for 2Q.
Clovis Oncology Inc (CLVS) is expected to report $-0.41 for
2Q.
DXP Enterprises (DXPE) is expected to report $0.67 for 2Q.
Dominion Energy (D) is expected to report $0.74 for 2Q.
Elanco Animal Health Inc (ELAN) is expected to report $-0.01 for
2Q.
Encision (ECIA) is expected to report for 1Q.
Energizer Holdings Inc (ENR) is expected to report $0.75 for
3Q.
Genie Energy Ltd (GNE) is expected to report for 2Q.
HF Sinclair Corp (DINO) is expected to report for 2Q.
Hawaiian Electric Industries (HE) is expected to report $0.48
for 2Q.
Hemisphere Media Group Inc (HMTV) is expected to report for
2Q.
Heska Corp (HSKA) is expected to report $-0.04 for 2Q.
Holly Energy Partners LP (HEP) is expected to report $0.50 for
2Q.
Information Services Group Inc (III) is expected to report $0.07
for 2Q.
Krystal Biotech Inc (KRYS) is expected to report $-1.02 for
2Q.
Lincoln Educational (LINC) is expected to report $0.06 for
2Q.
Minerva Neurosciences Inc (NERV) is expected to report for
2Q.
Overseas Shipholding Group Inc - Class A (OSG) is expected to
report for 2Q.
Party City Holdco Inc (PRTY) is expected to report $-0.02 for
2Q.
PowerFleet Inc (PWFL) is expected to report for 2Q.
Radware Ltd (RDWR) is expected to report $0.05 for 2Q.
Reading International Inc (RDI) is expected to report $0.10 for
2Q.
Reata Pharmaceuticals Inc (RETA) is expected to report $-2.11
for 2Q.
TG Therapeutics (TGTX) is expected to report $-0.51 for 2Q.
Tegna Inc (TGNA) is expected to report $0.52 for 2Q.
Tredegar (TG) is expected to report for 2Q.
TreeHouse Foods Inc (THS) is expected to report $-0.10 for
2Q.
Tyson Foods (TSN) is expected to report $1.95 for 3Q.
VBI Vaccines Inc (VBIV,VBV-T) is expected to report $-0.07 for
2Q.
Viatris Inc (VTRS) is expected to report for 2Q.
Zynerba Pharmaceuticals Inc (ZYNE) is expected to report $-0.23
for 2Q.
Powered by Onclusive and Dow Jones.
ANALYST RATINGS ACTIONS
bluebird bio Raised to Equal-Weight From Underweight by
Barclays
Ciena Coverage Assumed by MKM Partners at Buy
Constellation Energy Raised to Buy From Neutral by UBS
EOG Resources Inc. Raised to Buy From Hold by TD Securities
GrowGeneration Cut to Neutral From Buy by Alliance Global
Partners
Infinera Coverage Assumed by MKM Partners at Buy
Jamf Holding Cut to Hold From Buy by Craig-Hallum
Warner Bros.Discovery Cut to Equal-Weight From Overweight by
Wells Fargo
This article is a text version of a Wall Street Journal
newsletter published earlier today.
(END) Dow Jones Newswires
August 08, 2022 06:00 ET (10:00 GMT)
Copyright (c) 2022 Dow Jones & Company, Inc.