EIA Weekly Petroleum Status Report
Stock futures fell and bond yields rose early Wednesday as
investors focused on signs of slowing economic growth, including a
Bloomberg report that Apple had dropped plans to boost iPhone
The drop in U.S. futures suggested the S&P 500 could be on
course to fall for a seventh straight session. Elsewhere, the yield
on the 10-year Treasury note climbed for a third consecutive
trading session, briefly trading above 4% earlier in the
Ray Remy, a bond trader and co-head of fixed income at Daiwa
Capital Markets America, said the bond market has been functioning
as normal, but that investors are just dumping Treasurys as the Fed
officials keep promising more rate increases.
"We're all bumping heads and scratching our heads a little bit,"
looking for explanations for the outsize move over the last few
days, he added.
Shares in Europe declined for a five-day losing streak, while
major benchmarks in Asia suffered broad losses.
On the European exchanges, shares of Apple suppliers
STMicroelectronics, Infineon and AMS fell on a report that said the
tech giant was scrapping plans to increase production of its latest
iPhones this year due to weaker-than-expected demand.
Read more here.
As the dollar rises to another 20-year high against a basket of
currencies and against the euro, MUFG said it may be reaching
extreme levels and risks destabilizing markets further.
"If the current speed of dollar strength persists, the contagion
effect destabilizing markets globally will only intensify further
and heighten risks of a deeper global recession," MUFG said.
Coordinated intervention to tame dollar strength looks unlikely
for now, but "we should never rule anything out."
Sterling could visit new lows ahead of speeches by some "dovish"
members of the Bank of England, Mizuho said.
Huw Pill, chief economist of the BOE, has advocated "significant
monetary policy response," thus speaking a "hawkish" language, but
upcoming speeches by Jon Cunliffe and Swati Dhingra could tilt the
tone in the "dovish" direction, Mizuho said.
"We wouldn't be surprised to see cable testing lows in
anticipation of Dhingra's remarks," Mizuho said.
The yield on 10-year government bonds hit 4% for the first time
in more than a decade on Wednesday, the latest leg of a
historically steep rise that has jolted financial markets this
"It's shocking just the speed at which this has happened,"
Pictet Asset Management said. "But the new reality is inflation is
much higher, so even at 4%, you ask yourself, is it going to be
enough to bring inflation down?"
Read more here.
Danske Bank said long-dated government bond yields are expected
to continue rising over the next three months as high inflation
figures keep ticking in, central banks tighten monetary policies
further and concern about growing supply increases.
On a three-month horizon, the 10-year German Bund yield is
expected to rise to 2.35%, while the 10-year Treasury yield should
increase to 4.05%, Danske Bank said, adding that risks to these
forecasts skew to the upside.
Danske expects bond yields to peak in 2022 and decline slightly
Oil prices dropped in Europe, reversing Tuesday's gains, as the
dollar scaled a fresh high and risk assets sold off further.
DNB Markets said the declines in global equity markets are
weighing on investor sentiment, which is undermining oil
The stronger dollar makes oil crude contracts more expensive for
foreign buyers, pushing down on prices. Other factors weighing on
the market include reports that inventories rose last week and
Goldman Sachs lowering its forecast for prices next year on
prospects for weaker demand.
Read: European Natural Gas Prices Jump on Fears for Ukrainian
Russian backing for an OPEC+ production cut would boost the
chances that one will follow at the cartel's meeting next week.
Moscow has thrown its weight behind a 1 million barrel a day
cut, Reuters reported. With an EU embargo on Russian oil set to
come into force later this year, and Russia already significantly
under producing its quota, Moscow "has every incentive...to try to
orchestra a significant output cut," DNB Markets said.
With Brent prices continuing to tumble, defying OPEC's
insistence that demand remains robust, the motives for a sizable
cut from the group are growing.
"Given the decline in oil prices and the deteriorating
macroeconomic outlook [Russia] might succeed in its effort."
Base metals were lower in Europe, with Copper retreating for a
fourth session, but losses were contained on hopes for a pickup in
Norway's Norsk Hydro said it would cut aluminum production at
two of its plants due in part to weaker European demand.
"The market remains concerned about the impact of rising
interest rates on economic activity and thus demand," ANZ said.
Still, an easing of Covid-19 restrictions in China is boosting
hopes of a pickup in demands, it added.
TODAY'S TOP HEADLINES
Alzheimer's Drug Slows Disease Progression in Trial
Eisai Co. and Biogen Inc. said their experimental Alzheimer's
disease drug significantly slowed progression of the memory-robbing
disease in a large study, bolstering the drug's prospects for
The pharmaceutical companies said their drug lecanemab reduced
cognitive and functional decline by 27%, compared with a placebo,
over 18 months in a Phase 3 study of 1,800 patients with
early-stage Alzheimer's. The drug was also linked to higher rates
of brain swelling and small bleeds, though the company said they
were rarely symptomatic.
Apple won't boost production of iPhone 14 due to slower demand:
Apple Inc. is dropping plans to boost production of its latest
iPhones this year after lower-than-expected demand, according to a
Bloomberg News reported Tuesday night that an expected surge in
demand failed to materialize. Citing sources familiar with the
matter, Bloomberg said suppliers have been told to pull back from
efforts to ramp up assembly of about 6 million iPhone 14 units,
settling on a goal of producing about 90 million iPhone 14s by the
end of the year, about the same as iPhone 13 production last year,
and in line with an outlook that Bloomberg reported in August.
Bloomberg on Tuesday added that sources said demand for the
higher-priced iPhone Pro model was stronger than for the
Chinese Developer CIFI Shares Dive Amid Default Concerns
Shares of CIFI Holdings (Group) Co. fell sharply on Wednesday,
following reports that an entity related to the Chinese developer
had missed a debt payment.
The stock fell as much as 29% and was last down 27% at HK$0.93.
That would put CIFI on track for its worst-ever one-day drop.
Wall Street to Pay $1.8 Billion in Fines Over Traders' Use of
Banned Messaging Apps
WASHINGTON-Eleven of the world's largest banks and brokerages
will collectively pay $1.8 billion in fines to resolve regulatory
investigations over their employees' use of messaging applications
that broke record-keeping rules, regulators said Tuesday.
The firms include brokerage units of Bank of America Corp.,
Barclays PLC, Citigroup Inc., Credit Suisse Group AG, Deutsche Bank
AG, Goldman Sachs Group Inc., Morgan Stanley, UBS Group AG and
Nomura Holdings Inc. Brokerage firms Jefferies LLC and Cantor
Fitzgerald & Co. also settled the claims with the Securities
and Exchange Commission and the Commodity Futures Trading
Tyson Foods Promotes Chairman's Son to CFO Role
Tyson Foods Inc. promoted the chairman's son to be its new
finance chief as the meat producer navigates higher costs for
worker wages and animal feed.
The Springdale, Ark.-based company on Tuesday said it named John
R. Tyson as executive vice president and chief financial officer,
effective Oct. 2. Mr. Tyson, who currently serves as executive vice
president of strategy and chief sustainability officer, is set to
succeed Stewart Glendinning.
10-Year Treasury Yield Hits 4%
The yield on 10-year U.S. government bonds hit 4% for the first
time in more than a decade Wednesday, the latest leg of a
historically steep rise that has jolted financial markets this
Yields, which rise when bond prices fall, have been climbing at
their fastest pace in four decades because of escalating
expectations for how high the Federal Reserve will raise short-term
interest rates to tamp down the worst inflation since the
China's Offshore Currency Hits Record Low Against Dollar
China's currency hit its weakest ever offshore trading level
against the U.S. dollar, with the yuan falling below 7.2 to the
dollar for the first time since a separate system for trading the
currency outside mainland China was launched more than a decade
The move caps a fall of about 12% for the offshore yuan against
the dollar this year and comes despite repeated attempts by China's
central bank to support its currency. The U.S. dollar has gained
against currencies around the world amid a campaign of aggressive
interest rate increases by the Federal Reserve.
Senate Advances Stopgap Funding Bill After Removing Joe
Manchin's Permitting Overhaul
WASHINGTON-Sen. Joe Manchin (D., W.Va.) on Tuesday threw in the
towel on including his contentious proposal to speed up permitting
of energy projects in a must-pass funding bill, clearing the way
for the Senate to advance the legislation needed to keep the
With the permitting language out, the Senate voted 72 to 23 to
advance the stopgap bill, which would extend current government
funding levels until Dec. 16 and prevent a partial shutdown this
weekend, when the fiscal year ends. The bill now moves to final
passage in the Senate and will also need approval in the House,
which returns Wednesday, before heading to President Biden's
Saudi Sovereign-Wealth Fund Reveals Finances for First Time
Ahead of Bond Sale
DUBAI-Saudi Arabia offered a first look inside the performance
of its $600 billion sovereign-wealth fund, disclosing a return that
was in line with the broader market and revealing that it invested
$2 billion in Russian assets before the war in Ukraine.
The Public Investment Fund has hired banks to possibly raise
billions of dollars in a debut bond sale, according to a prospectus
it shared with potential investors this week. The cash would be
invested in renewables and other green projects, PIF said, for the
first time shining a light on the finances of the once-secretive
Ether Cryptocurrency Falls After 'Merge' Software Upgrade
The price of the cryptocurrency ether has fallen 19% over the
past two weeks as Ethereum miners sell their holdings in the wake
of a much-hyped software upgrade dubbed "the merge."
On Tuesday evening, ether's price was $1,324, a decline of less
than 0.1% from Monday.
U.S. to Expand Diplomatic, Defense Footprint in the Pacific
SYDNEY-A new U.S. strategy for the Pacific will involve a bigger
diplomatic and security footprint, help island nations respond to
climate change and focus on economic prosperity, according to a
preview released shortly before Pacific leaders planned to meet
President Biden in Washington.
The two-day meeting, billed by the U.S. as a summit involving
leaders and representatives from more than a dozen Pacific island
nations and territories, starts Wednesday. It caps months of
intense U.S. diplomacy in the region, which has emerged as a hot
spot in the great-power rivalry between the U.S. and China.
Government Funding Bill Includes $35 Million to Prevent Nuclear
Disaster in Ukraine
WASHINGTON-The U.S. is expected to send aid to Ukraine to
respond to a nuclear disaster or prevent nuclear materials from
being smuggled out of the country, according to congressional
legislation and U.S. officials.
Senate Democrats inserted $35 million for special nuclear safety
funding into a must-pass government funding bill, a small part of
the more than $12 billion in economic and military aid for Ukraine
in the legislation.
Covid Aid Left Out of Stopgap Funding Bill
WASHINGTON-Congressional Democrats opted not to include billions
of dollars in new funding for Covid-19 and monkeypox in a must-pass
government-funding bill, frustrating Biden administration officials
who have called new funding crucial to the federal health
The request had faced an uphill fight in Congress, with
Republicans largely opposing new money for Covid-19 on top of
previous rounds of aid and questioning whether it was necessary
with cases of both monkeypox and Covid-19 dropping.
China's Xi Jinping Re-Emerges in Public After Quarantine
BEIJING-Chinese leader Xi Jinping got out of quarantine and made
his first public appearance since visiting Central Asia, trumpeting
his governance record over the past decade as he prepares to extend
his rule for a third term.
Until Tuesday, Mr. Xi hadn't appeared in public since his trip
earlier this month to Central Asia, where he met with Russian
President Vladimir Putin, because he was abiding by quarantine
protocols that China imposes on people returning from overseas
travel, according to people familiar with the matter.
Hurricane Ian Approaches Florida, Threatens Tampa Bay
ST. PETERSBURG, Fla.-Hurricane Ian bore down on southwest
Florida Tuesday after pummeling Cuba, with a swath of the state's
Gulf Coast in harm's way, including the vulnerable Tampa Bay
The storm's center is forecast to approach the west coast of
Florida on Wednesday afternoon and into Wednesday night, according
to the National Hurricane Center. Rain from the storm began
drenching parts of the state Tuesday. Hurricane conditions are
expected along the state's Gulf Coast by Wednesday morning.
Write to firstname.lastname@example.org TODAY IN CANADA
AGF Mgmt 3Q
H2O Innovation 4Q
Stocks to Watch:
MindMed Prices Public Offering of Common Shrs, Warrants;
Combined Offering Price of Each Shr, Accompanying Warrant Set at
$4.25; MindMed Offering 7,058,823 Shrs Together With Accompanying
Warrants; Warrants Exercisable at $4.25 Per Common Shr; MindMed
Expects Gross Proceeds From Offering of $30M; Offering Expected to
Close on or About Sept 30; RBC Capital Markets, Cantor Acting as
Lead Managers for Offering
Expected Major Events for Wednesday
05:00/JPN: Jul Indexes of Business Conditions - Revision
06:00/GER: Oct GfK consumer climate survey
06:45/FRA: Sep Consumer confidence survey
06:45/FRA: Aug Housing starts
08:00/ITA: Sep Consumer Confidence Survey
08:00/ITA: Sep Business Confidence Survey
08:30/UK: Aug Capital issuance
09:00/ITA: Jul Industrial turnover & orders
11:00/US: 09/23 MBA Weekly Mortgage Applications Survey
12:30/US: Aug Advance Economic Indicators Report
12:30/US: 2Q U.S. International Investment Position
14:00/US: Aug Pending Home Sales Index
14:00/US: Aug Metropolitan Area Employment &
14:30/US: 09/23 EIA Weekly Petroleum Status Report
23:01/UK: Aug Zoopla House Price Index
23:01/UK: Aug UK monthly automotive manufacturing figures
23:50/JPN: Sep Provisional Trade Statistics for 1st 10 days of
All times in GMT. Powered by Onclusive and Dow Jones.
Expected Earnings for Wednesday
AGF Management Ltd - Class B (AGF.B.T) is expected to report
$0.27 for 3Q.
Cintas Corp (CTAS) is expected to report $3.15 for 1Q.
Cognyte Software Ltd (CGNT) is expected to report for 2Q.
Concentrix Corp (CNXC) is expected to report for 3Q.
Duckhorn Portfolio Inc (NAPA) is expected to report for 4Q.
Enerpac Tool Group Corp (EPAC) is expected to report for 4Q.
H2O Innovation (HEO.T) is expected to report for Full year.
Hyzon Motors Inc (HYZN) is expected to report for 2Q.
IsoRay (ISR) is expected to report $-0.02 for 4Q.
Jefferies Financial Group Inc (JEF) is expected to report $0.65
MillerKnoll Inc (MLKN) is expected to report $0.28 for 1Q.
Park City Group (PCYG) is expected to report $0.05 for 4Q.
Paychex Inc (PAYX) is expected to report $0.97 for 1Q.
Raymond James Financial (RJF) is expected to report.
S&W Seed (SANW) is expected to report $-0.14 for 4Q.
Thor Industries (THO) is expected to report $3.85 for 4Q.
Vail Resorts (MTN) is expected to report $-2.95 for 4Q.
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ANALYST RATINGS ACTIONS
Cogent Communications Raised to Overweight From Sector Weight by
CS Disco Cut to Hold From Buy by Loop Capital
CSX Corp Cut to Neutral From Buy by UBS
Douglas Emmett Cut to In-Line From Outperform by Evercore ISI
Hyatt Hotels Raised to Outperform From In-Line by Evercore ISI
Keurig Dr Pepper Cut to Neutral From Buy by Goldman Sachs
Norfolk Southern Cut to Neutral From Buy by UBS
Perficient Raised to Buy From Neutral by Alliance Global
Prologis Raised to Outperform From In-Line by Evercore ISI
This article is a text version of a Wall Street Journal
newsletter published earlier today.
(END) Dow Jones Newswires
September 28, 2022 05:48 ET (09:48 GMT)
Copyright (c) 2022 Dow Jones & Company, Inc.