Weekly Jobless Claims
Stock futures inched lower on Thursday as traders reflected on
several volatile sessions and eyed looming jobs data.
The prospect of the Federal Reserve adopting a less restrictive
monetary stance in the wake of some soft data and recent market
turmoil--most notably in U.K. bonds--had been a catalyst for a
sharp equity rebound, according to Henry Allen, strategist at
"But over the last 24 hours, solid U.S. data releases have
created a pushback against that narrative, since they were seen as
giving the Fed more space to keep hiking rates over the coming
months," Allen added.
Indeed, Fed speakers, such as Raphael Bostic, have continued to
affirm the need for more rate hikes. On Thursday, Loretta Mester is
due to speak at 8:50 a.m. and again at 6:30 p.m. In between, at 1
p.m., Fed governor Lisa Cook will deliver her first speech in her
One crucial factor impacting Fed thinking is the health of the
jobs market. Consequently, the looming nonfarm payrolls report, due
on Friday, may be encouraging a period of cautious reflection among
investors after the latest rally, said analysts.
The market had been arguably excessively bearish at the end of
last week, with the S&P 500 at its lowest since November 2020,
and the benchmark's 14-day relative strength index, a momentum
gauge, at 28, where a number below 30 is considered in oversold
territory. The subsequent recovery, up 5.5% since Friday's close,
leaves the RSI at 46.
"There is nothing to suggest that the market will move out of
range trade mentality ahead of Friday's major risk event, [the]
NFP," said Stephen Innes, managing partner at SPI Asset
"However, the fly in the ointment could be higher [oil] prices,
as the knock-on inflation throughput, especially if $100 a barrel
is tested, could keep the Fed higher for longer if energy inflation
picks up again, " Innes added.
The dollar has recovered some ground after recent falls and is
likely to continue to do so ahead of the weekend, potentially
around Friday's jobs report in particular, ING said.
"As we had expected, the dollar downtrend has started to prove
unsustainable," ING said, adding that markets probably aren't yet
ready to bet heavily on the Fed slowing the pace of interest-rate
The jobs data has the potential to lift the DXY to around
112-113, ING said.
Government bond yields face opposing pressures from hawkish
central banks and weak economic growth, Amundi said, maintaining an
active and tactical approach.
Amundi is slightly cautious on duration--a measure of the
sensitivity of bonds to changes in interest rates--mainly through
Treasurys and core Europe, but it is positive on China and neutral
on the U.K. amid the recent sharp movements, it said.
Gilt yields rose after Fitch cut its outlook on the U.K. to
negative from stable, following on from S&P's recent decision
to reduce the country's outlook to negative.
Fitch said the reduction in the outlook reflected the "large and
unfunded fiscal package announced as part of the new government's
growth plan," which could "lead to a significant increase in fiscal
deficits over the medium term."
Fitch affirmed the U.K. credit rating at AA-.
Oil prices held modest gains post-OPEC, with SPI Asset
Management saying the market is already tight and is expected to
tighten further when an EU embargo on Russian oil comes into force
later this year.
Other News: Shell warned that a steep fall in refining margins
will have a negative impact of between $1 billion and $1.4 billion
on its third-quarter adjusted earnings, while it also expects lower
results from its Integrated Gas business.
Read more here.
Metals prices rose across the board as traders once again pivot
to risk assets on tepid signs of a macroeconomic recovery.
"The macro environment is on the bullish side of the ledger for
the first time in four weeks," Peak Trading Research said.
TODAY'S TOP HEADLINES
Shell Braces for Profit Hit From Volatile Natural-Gas Prices,
Shell PLC said it expects its third-quarter earnings to be hit
by "significantly lower" profit from trading gas because of market
volatility as well as higher costs for delivering fuel amid a
global scramble for energy supplies.
The London-based company said Thursday that the pricing and cost
swings from shortfalls of liquefied natural gas will likely cut
into profit from its huge gas business, typically its biggest cash
generator. But Shell said its overall marketing profits from
trading oil and other products were higher in the third quarter
compared with the previous quarter. The comments came in a preview
of Shell's full third-quarter earnings, scheduled for later this
Brookfield Bets $2 Billion on Music in Deal With Primary
Brookfield Asset Management Inc. is joining with independent
publisher Primary Wave Music in a $2 billion deal to invest in
music copyrights, the companies said.
The asset manager, which hasn't previously invested in music
catalogs, will take a significant minority interest in Primary
Wave, and commit $1.7 billion to fund a permanent capital vehicle
focused on acquiring music rights from top acts.
Elon Musk and Twitter at Odds Over Terms of Agreement to Close
Representatives of Elon Musk and Twitter Inc. are still
grappling with terms of an agreement that would enable his purchase
of the social-media company to proceed, continuing a monthslong
drama surrounding the fate of the blockbuster deal.
The discussions are the latest the two sides have held as a
courtroom clash draws nearer. They quietly held unsuccessful talks
about a possible cut to the price of $44 billion for the
social-media platform before Mr. Musk reversed course Monday and
said he would return to the original agreement's terms, people
familiar with the matter said.
Ford's Electric F-150 Lightning Truck Gets Higher Starting
Ford Motor Co. is raising the starting price of its all-electric
truck for the second time in recent months.
The new price tag for the 2023 F-150 Lightning Pro is $51,974,
the company said. The increase is expected to affect only the Pro,
its most affordable trim level.
U.S. Looks to Ease Venezuela Sanctions, Enabling Chevron to Pump
The Biden administration is preparing to scale down sanctions on
Venezuela's authoritarian regime to allow Chevron Corp. to resume
pumping oil there, paving the way for a potential reopening of U.S.
and European markets to oil exports from Venezuela, according to
people familiar with the proposal.
In exchange for the significant sanctions relief, the government
of Venezuelan President Nicolás Maduro would resume long-suspended
talks with the country's opposition to discuss conditions needed to
hold free and fair presidential elections in 2024, the people said.
The U.S., Venezuela's government and some Venezuelan opposition
figures have also worked out a deal that would free up hundreds of
millions of dollars in Venezuelan state funds frozen in American
banks to pay for imports of food, medicine and equipment for the
country's battered electricity grid and municipal water
Credit Suisse's Woes Don't Make for a Lehman Moment --
European banks aren't at risk of facing a Lehman-style
That's according to multiple analysts reacting to the stream of
negative stories and market turmoil hitting Swiss banking giant
Credit Suisse Group AG.
Talking Markets: China Likely Needs More Than October Meetings
to Exit Zero-Covid
Some China watchers are hoping that political meetings this
month will signal an end to strict anti-Covid-19 policies that have
cast a gloomy spell on the world's second-largest economy. They are
likely to be disappointed and left waiting well into next year,
Chinese businesses have slowed investments and consumers have
cut spending amid citywide lockdowns, mass testing and years of
border closures stemming from Beijing's pandemic controls. These
factors played a role in slower-than-expected GDP growth in the
second quarter, as well as in several equity market selloffs. Both
the CSI 300 and the Shanghai Composite Index have fallen to
multimonth lows, while the MSCI China Index has hit a six-year
German Factory Orders Fell Sharply in August
New orders in Germany's manufacturing sector fell sharply in
August, more than forecast, reflecting weakening demand for goods
in a context of rising input costs and high energy prices.
Factory orders decreased 2.4% on month, data from the German
statistics office Destatis showed Thursday. The decrease is much
larger than forecast by economists polled by The Wall Street
Journal, who expected orders to fall by 0.5%.
Bank of Japan Maintains View on Most of Japan's Regional
The Bank of Japan on Thursday maintained its view that most of
Japan's local economies were growing moderately, citing
improvements in supply shortages
The bank's assessment for eight of the nine local economies was
unchanged, and it raised its assessment for one region in the
western part of the nation's main island.
Saudi Sovereign-Wealth Fund Joins 100-Year Bond Club
Saudi Arabia braved turbulent markets to join the small club of
issuers that have borrowed for 100 years from investors, with its
sovereign-wealth fund selling the ultralong debt as part of a $3
billion bond-market debut.
The three-part sale of green bonds tapped global investors for
funds that will help support projects at the heart of Crown Prince
Mohammed bin Salman's national economic transformation.
Europe Has the Strength to Sail Through a Recession
Europe has had a punishing year. The fallout from the war in
Ukraine has caused food and fuel costs to spike, forcing central
bankers to move aggressively to curb inflation. Yet, tighter
monetary policy is colliding with looser fiscal policy, as
governments seek to mitigate the impact of rising costs on
The result is a macroeconomic mess, which has pressured stock
markets from London and Paris to Berlin and Rome. The FTSE 100, in
Britain, is down 4% year to date and down 6% since mid-August; the
Stoxx Europe 600, a pan-European index, is off 18%, versus the 21%
loss in the S&P 500.
Russian Missiles Hit Civilian Targets in Southeastern
KYIV, Ukraine-Russian missiles struck the city center of the
southeastern Ukrainian city of Zaporizhzhia, killing at least two
people early on Thursday while Ukraine's forces reclaimed more
territory from Moscow, according to senior Ukrainian officials.
At least seven missiles struck the city in an attack that hit a
series of apartment buildings, according to Kirill Timoshenko, a
Ukrainian presidential adviser. At least six people were also
wounded in the strike, he said. Zaporizhzhia and the surrounding
area have been a focal point of Russian attacks in recent months
after Russia seized control of the nearby nuclear power plant with
the same name.
North Korea Test-Fires Two Short-Range Ballistic Missiles Off
Its East Coast
SEOUL-North Korea test-fired two short-range ballistic missiles
off its east coast on Thursday, shortly after the U.S. said at the
United Nations that Pyongyang is feeling emboldened.
The Thursday test marked the Kim Jong Un regime's sixth weapons
launch in 12 days, adding to what is already a historic year of
U.S. Believes Ukraine Was Behind Assassination of Putin Ally's
WASHINGTON-U.S. intelligence agencies have concluded that
Ukraine was responsible for the August assassination outside Moscow
of the daughter of a prominent far-right wing Russian ideologue, a
U.S. official said.
The U.S. wasn't aware beforehand of the operation that killed
Daria Dugina, the official said, and Washington has formally
complained about it to Ukraine's government.
Write to email@example.com TODAY IN CANADA
Richelieu Hardware 3Q
Economic Indicators (ET):
1000 Sep Ivey Purchasing Managers Index
1150 Bank of Canada Governor Tiff Macklem speech to the Halifax
Chamber of Commerce
Stocks to Watch:
Great Panther Mining: British Columbia Court Pronounces an
Initial Order Converting Restructuring Proceedings Under the
Bankruptcy and Insolvency Act to CCAA; Initial Order Prevents
Creditors From Enforcing Against Company Up to and Including Oct.
14, When It Will Return to Court to Seek, Among Other Things, an
Extension to the Stay; Order Also Approves Agreement for Asahi
Refining Canada Ltd. to Continue to Provide Refining Services
Suncor to Sell Wind and Solar Assets to ATCO's Canadian
Utilities Ltd. for C$730M; Sale Includes Magrath, Chin Chute and
Adelaide Wind Farms, as Well as Forty Mile Wind Farm Expected to Be
Operating by Year-End and Development Stage Renewable Power Assets;
Suncor Expects Sale to Close in 1Q
ATCO: In Contract Discussions With 'Credit Worthy
Counterparties' on Forty Mile Project; Expects Deal to Add to
Earnings and Cash Flow in 2023
Expected Major Events for Thursday
02:00/JPN: Sep Imported Vehicle Sales
06:00/GER: Aug Manufacturing orders
06:00/GER: Aug Manufacturing turnover
08:30/UK: Sep S&P Global / CIPS UK Construction PMI
11:30/US: Sep Challenger Job-Cut Report
12:30/US: 10/1 Unemployment Insurance Weekly Claims Report -
12:30/US: U.S. Weekly Export Sales
13:00/RUS: Weekly International Reserves
14:00/CAN: Sep Ivey Purchasing Managers Index
14:30/US: 09/30 EIA Weekly Natural Gas Storage Report
16:00/US: Sep Monthly U.S. Retail Chain Store Sales Index
20:30/US: Foreign Central Bank Holdings
20:30/US: Federal Discount Window Borrowings
23:01/UK: Sep BRC-Sensormatic IQ Footfall Monitor
23:30/JPN: Aug Household Spending
23:50/JPN: Sep International Reserves / Foreign Currency
23:50/JPN: Sep Provisional Trade Statistics for 1st 20 days of
All times in GMT. Powered by Onclusive and Dow Jones.
Expected Earnings for Thursday
Accolade Inc (ACCD) is expected to report for 2Q.
Aehr Test Systems (AEHR) is expected to report for 1Q.
AngioDynamics (ANGO) is expected to report $-0.17 for 1Q.
Buckle Inc (BKE) is expected to report.
Conagra Brands Inc (CAG) is expected to report $0.52 for 1Q.
Constellation Brands (STZ,STZB) is expected to report $2.81 for
Educational Development Corp (EDUC) is expected to report for
Goodfellow (GDL.T) is expected to report for 3Q.
IDT Corp (IDT) is expected to report for 4Q.
Levi Strauss & Co (LEVI) is expected to report $0.37 for
McCormick & Co (MKC) is expected to report $0.70 for 3Q.
Park Aerospace Corp (PKE) is expected to report for 2Q.
Radiant Logistics (RLGT) is expected to report $0.32 for 4Q.
Richelieu Hardware (RCH.T) is expected to report $0.76 for
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ANALYST RATINGS ACTIONS
Avantor Raised to Buy From Neutral by Citigroup
Charles Schwab Raised to Buy From Hold by Erste Group
Chemours Cut to Hold From Buy by Argus Research
Church & Dwight Raised to Buy From Hold by Deutsche Bank
ConocoPhillips Raised to Buy From Hold by Erste Group
Cross Country Healthcare Cut to Hold From Buy by Truist
Farmers National Banc Cut to Neutral From Overweight by Piper
Ford Motor Raised to Overweight From Equal-Weight by Morgan
Goldman Sachs Cut to Underweight From Neutral by Atlantic
Laredo Petroleum Cut to Neutral From Overweight by Piper
Lumen Technologies Cut to Equal-Weight From Overweight by Wells
Medallion Financial Cut to Market Perform From Outperform by
Northland Capital Markets
Morgan Stanley Cut to Neutral From Overweight by Atlantic
Penumbra Cut to Neutral From Buy by Citigroup
Poshmark Cut to Equal-Weight From Overweight by Barclays
Sotera Health Cut to Neutral From Buy by Citigroup
SVB Financial Cut to Equal-Weight From Overweight by Morgan
Walmart Raised to Buy From Hold by Erste Group
This article is a text version of a Wall Street Journal
newsletter published earlier today.
(END) Dow Jones Newswires
October 06, 2022 05:28 ET (09:28 GMT)
Copyright (c) 2022 Dow Jones & Company, Inc.