Watch For:

State Employment and Unemployment for July; Canada Retail Trade for June.

Opening Call:

Stock futures pointed to a lower start for Wall Street Friday as investors contended with mixed signals from the Federal Reserve on the pace of future interest-rate hikes and signs of a resilient economy.

Stocks closed with modest gains Thursday after jobless claims unexpectedly fell during the week ended Aug. 13, the first decline since late July, suggesting the labor market remains strong. The Philadelphia Federal Reserve's monthly manufacturing index also surprisingly accelerated in August.

The gains Thursday followed the release on Wednesday of the minutes from the Fed's July 26-27 meeting, at which Fed officials agreed they need to keep raising interest rates to cool inflation, but indicated the pace of those hikes could slow if economic data supported such a move.

St. Louis Fed President James Bullard on Thursday said he favored a three-quarters point hike at the Fed's next meeting in September. The Fed has boosted rates at that pace the last two times it has met. Bullard told The Wall Street Journal in an interview that the central bank "should continue to move expeditiously to a level of the policy rate that will put significant downward pressure on inflation."

Kansas City Fed President Esther George, however, said the "case for continuing to raise rates remains strong," but added that the "question of how fast that has to happen is something my colleagues and I will continue to debate, but I think the direction is pretty clear."

George told a Kansas City economic group that the Fed has "done a lot, and I think we have to be very mindful that our policy decisions often operate on a lag. We have to watch carefully how that's coming through."

Both Bullard and George are voting members of the Federal Open Market Committee, the central bank's rates-setting committee.

The comments from both Fed officials come before the Fed's annual Jackson Hole conference in Wyoming next week at which Fed Chairman Jerome Powell will be speaking. His comments will be closely monitored by Wall Street.

"After a weeks-long rally, the market is looking for its next catalyst, especially as earnings season winds down and there is still about one month remaining until the next Fed meeting," said William Huston, chief investment officer at Bay Street Capital Holdings in Palo Alto, Calif.

"Investor focus will now shift to the upcoming Jackson Hole meeting, where central bankers will have another opportunity to address how it plans to adjust monetary policy over the coming months."

Overseas, European markets were mostly in negative territory while stocks in Asia were mixed.


The dollar rose to a one-month high in early European trading against a basket of currencies and the euro, though this may reflect difficulties facing European and Asian economies rather than U.S.-specific news, ING said.

"It is hard to pin down the exact reason for dollar strength... However, the move suits our generally positive stance on the dollar at a time when European and Asian growth prospects remain challenged," the Dutch bank said.

Barring "very poor" upcoming data, the dollar is likely to "consolidate near the recent highs."


The current strong gains for the dollar may start to fade as the Fed could slow the pace of policy tightening, Insight Investment said.

"With the U.S. economy having experienced a 'technical' recession in the first half of 2022 it is clear that monetary tightening is working," it said.

This makes it unlikely that the Fed will need to increase rates meaningfully beyond what markets are already pricing in, and the pace of interest-rate rises is likely to become less aggressive, Insight Investment said.


DZ Bank continues to forecast rising spreads in almost all bond segments, but particularly in bank and non-financial corporate bonds. "Compared with their history, spread levels in the riskier bond segments are too low for a recession scenario in our view," it said.

DZ Bank finds it difficult to fathom the current risk-on sentiment with a recession on the horizon. But it has lowered its spread forecasts in the banking, sovereign bond and agency segment somewhat to reflect the levels at which spreads are currently trading, it said.

The bank's shift to a neutral weight in all bond segments in line with benchmark weighting, anticipating their performance to be broadly similar over a six-month horizon.

"Due to the combination of a more modest rise in interest rates and similar spread increases in some cases, the expected losses in all bond segments are fairly close together over a six-month horizon," DZ Bank said.

The opposing forces of recession and inflation will continue to hold sway over the bond markets for the foreseeable future, implying elevated uncertainty, the bank said.


Oil prices were slightly down after finishing higher overnight on data which showed a sharp drop in U.S. inventories.

"Recession fears remain elevated for key markets, including the U.S. and EU, raising concerns over the strength of future oil demand," Fitch Solutions said.

Meanwhile, developments relating to a potential renewed nuclear deal with Iran will also likely be closely watched.


Gold lost further ground after suffering a fourth straight session loss overnight due to a stronger dollar.

"The U.S. dollar might continue to strengthen if U.S. economic data continues to surpass expectations," Oanda said. "After breaking below $1,800, gold has been struggling to regain its footing."


Metals were mostly down as a stronger dollar continues to weigh on commodity prices. Marex said the rising dollar "is a drag on commodities, " with sentiment still "risk-off."

Data showed U.K. consumer confidence fell to a record low this month, pushed by recession and inflation worries. That said, zinc is moving higher. Marex noted that zinc is a "standout," being the only metal down in terms of Chinese production, while other base metals rise.




For Bed Bath & Beyond, Investor's Turnabout Adds to Problems

Bed Bath & Beyond Inc. suffered another blow this week when its highest-profile investor sold out, just months after buying up shares and securing seats on the board.

Billionaire investor Ryan Cohen filed to sell his entire 10% stake in the company, a disclosure that sparked a pullback in its stock that began late Wednesday.


Just Eat to Sell Around 33% Stake in iFood JV to Prosus

Just Eat NV said Friday that it has agreed to sell its around 33% stake in the iFood joint venture to Prosus NV for up to 1.8 billion euros ($1.82 billion) as it looks to focus on improving profitability and on a disciplined capital allocation.

The Amsterdam-based food-delivery group said the amount comprises EUR1.5 billion in cash on closing and a deferred consideration based on the performance of the online food delivery sector over the next year of up to EUR300 million.


Roblox Poaches Seasoned Meta Executive as It Chases Growth in Asia

HONG KONG-Roblox Corp. has poached a Meta Platforms Inc. executive for the newly created role of Asia-Pacific head of public policy, as the videogame company chases growth in the region.

Steve Park, the longtime government relations head for South Korea and Japan at Facebook's parent company, will join Roblox next week, a spokeswoman for the San Mateo, Calif.-based company said.


China's GigaCloud Goes Public in U.S., Bucking Delisting Trend

E-commerce company GigaCloud Technology Inc. made its debut on the Nasdaq Stock Market on Thursday, a rare instance of an initial public offering by a Chinese company in the U.S. as the two countries head toward a financial decoupling.

GigaCloud, an online platform that connects manufacturers of bulky consumer items with buyers around the world, raised $36 million in gross proceeds after selling 2.94 million Class A shares. The deal valued the company at $486 million. The amount raised could increase to $41 million if the underwriter sells more shares to exercise the so-called overallotment options, typically when the stocks are in high demand.


Lloyd's to Exclude Catastrophic Nation-Backed Cyberattacks From Insurance Coverage

Lloyd's of London Ltd. will require its insurer groups globally to exclude catastrophic state-backed hacks from stand-alone cyber insurance policies starting next year.

Lloyd's is a marketplace where roughly 75 syndicates of underwriters congregate to provide insurance coverage for businesses, organizations and individuals. As of March 31, when coverage begins or is renewed, syndicates must exclude state-backed cyberattacks from policies that protect against physical and digital damage caused by hacks, Underwriting Director Tony Chaudhry said in a bulletin dated Aug. 16.


Ride-Hailing Stocks Reverse After Recent Rally

Ride-hailing firms Uber, Lyft and Grab have recovered some of their lost market value over the past month, but a selloff this week has undermined the rally.

The shares of Uber Technologies Inc. and Lyft Inc. have risen more than 35% since mid-July, aided by their stronger-than-expected results earlier this month. Singapore-based Grab Holdings Ltd., which is set to report its second-quarter performance on Aug. 25, has jumped 41%.


Investors Should Go Where the Float Is

The check is never really "in the mail."

As trillions of dollars move between two places, or when they just sit in the middle, the sum is often called "float." In the long era of easy money and superlow rates, those vast sums didn't matter much. Now they do. With rates rising and the Federal Reserve fighting to restrain inflation, merely a percentage of that mountain of money is in and of itself serious money. That will change things for companies and individuals, for better or worse.


Biotech Rebounds on Optimism and Deal Making

Biotech stocks, some of the biggest losers in the selloff, are soaring.

The speculative sector is getting a boost from renewed optimism among investors. Fundamental drivers like deal making, new drug approvals and buying by big investors provide confidence that the rally could persist.


What Biotech ETFs Might Be Right for Your Portfolio?

Biotech is back. For those who want to invest through exchange-traded funds, here are some choices.

An exchange-traded fund, or ETF, invests in numerous stocks, quickly conferring exposure to a sector or theme and making ETFs a popular tool for diversifying portfolios. Many offer low expense ratios, reflecting the fees that investors pay each year.


North Korea Berates South Korean President: 'We Don't Like Yoon Suk-yeol Himself'

SEOUL-On Monday, South Korean President Yoon Suk-yeol sought to shake up frothy inter-Korean ties with what he called an "audacious plan." He offered food aid and economic assistance that could modernize North Korea's airports and hospitals-only if Pyongyang showed some commitment to denuclearize.

By the end of the week, North Korea gave its answer: "We don't like Yoon Suk-yeol himself."


Vanished Chinese-Canadian Billionaire Sentenced to 13 Years in Prison

Xiao Jianhua, a Canadian-Chinese billionaire whose abduction from Hong Kong five years ago sent shock waves through China's business community, was sentenced to 13 years in prison by a Shanghai court after pleading guilty to charges including graft and illegal handling of funds.

Mr. Xiao used the company he founded, Tomorrow Group, to pay bribes to unnamed government officials totaling around $100 million over 20 years, according to a statement from the Shanghai No. 1 Intermediate People's Court released on Friday through state media. It said Mr. Xiao used companies he controlled to illegally collect more than more than $45 billion in public deposits.




Newcrest Mining Limited 4Q


Economic Indicators (ET):

0830 Jun Retail trade


Stocks to Watch:

Shawcor: Awarded $500M Pipe Coating Contract in Southeast Mexico


Expected Major Events for Friday

06:00/GER: Jul PPI

06:00/UK: Jul UK monthly retail sales figures

06:00/UK: Jul Public sector finances

09:00/ITA: Jun Balance of Payments

12:30/CAN: Jun Retail trade

14:00/US: 2Q Quarterly Retail E-Commerce Sales

14:00/US: 2Q Advance Quarterly Services

14:00/US: Jul State Employment and Unemployment

All times in GMT. Powered by Onclusive and Dow Jones.


Expected Earnings for Friday

5E Advanced Materials Inc (FEAM) is expected to report for 4Q.

Bit Digital Inc (BTBT) is expected to report for 2Q.

Bri-Chem (BRY.T) is expected to report for 2Q.

Buckle Inc (BKE) is expected to report $0.82 for 2Q.

Canlan Ice Sports (ICE.T) is expected to report for 2Q.

Deere & Co (DE) is expected to report $6.63 for 3Q.

Enterprise Group (E.T) is expected to report for 2Q.

Focus Universal Inc (FCUV) is expected to report for 2Q.

Foot Locker Inc (FL) is expected to report $0.89 for 2Q.

GLG Life Tech Corp (GLG.T,GLGLF) is expected to report for 2Q.

Madison Square Garden Entertainment Corp (MSGE) is expected to report for 4Q.

Mega Matrix Corp (MTMT) is expected to report for 2Q.

North European Oil Royalty Trust (NRT) is expected to report for 3Q.

Oncotelic Therapeutics Inc (OTLC) is expected to report for 2Q.

Pineapple Energy Inc (PEGY) is expected to report for 2Q.

Regional Health Properties Inc (RHE) is expected to report for 2Q.

Twin Disc Inc (TWIN) is expected to report $0.17 for 4Q.

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American Axle Cut to Peer Perform From Outperform by Wolfe Research

BJ's Wholesale Club Raised to Buy From Neutral by B of A Securities

Krispy Kreme Cut to In-Line From Outperform by Evercore ISI Group

United Rentals Cut to Underperform From Market Perform by Bernstein

Verizon Cut to Underperform From Market Perform by MoffettNathanson

Wolverine World Wide Cut to Hold From Buy by Argus Research

World Wrestling Cut to Neutral From Buy by Northcoast Research

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


(END) Dow Jones Newswires

August 19, 2022 06:16 ET (10:16 GMT)

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