Watch For:

Personal Income & Outlays for October; Weekly Jobless Claims; ISM Report on Business Manufacturing PMI; earnings from Toronto-Dominion Bank, Bank of Montreal

Opening Call:

Today's Headlines/Must Reads

- Spending Report to Offer Clues About Consumers' Strength This Holiday Season

- Rising Tether Loans Add Risk to Stablecoin, Crypto World

- Collapse of FTX Draws Senate Hearing Scrutiny

- Netflix to Let Tens of Thousands of Subscribers Preview Content

- Tesla to Recall About 435,000 Cars in China

- Telegram to Build Decentralized Crypto Exchanges, CEO Says

Follow WSJ markets coverage here .

Equity futures were a bit softer on Thursday, as investors paused to reflect after a less-hawkish Jerome Powell delivered a strong end to November, with the market awaiting more important economic data over the next few days.

"With markets increasingly predisposed to a terminal rate below 5% and inflation getting back close to target in 2024, the stock market's rally could extend as pivot hopes should increase with interest rate risk now disproportionately skewed to the downside," SPI Asset Management said.

However, investors will be aware that the Fed's policy trajectory remains dependent on data showing inflation continuing to slow as the economy cools. To that end traders will be keenly eyeing a batch of important data over the next two sessions.

Two reports in particular may hold great sway: the October PCE price index, among the Fed's favored inflation gauges, is released on Thursday at 8:30 a.m.; and the nonfarm payrolls survey will be published on Friday at the same time.

Meanwhile, Fundstrat warned that the stock market may experience a pause for a while following recent gains.

"Wednesday's strong 'whoosh' higher for equities and Treasuries has lifted prices along with yields to levels that are near technical targets for a possible trend reversal next week."

Global stocks rose: The Stoxx Europe 600 was up 0.8%, while Hong Kong's Hang Seng added 0.7% and Japan's Nikkei gained 0.9%.

Stocks to Watch

Costco: Shares fell 2.9% off hours after it said the pace of monthly sales had slowed in November from the prior month.

Okta: Guided for profitability for all of its next fiscal year. On the earnings conference call, Okta's CFO projected adjusted profits for the full year on revenue of $2.13-$2.15 billion. Analysts expected adjusted losses of 30 cents a share on sales of $2.3 billion. Okta shares rose 15% in after hours trading.

Orthofix Medical: Said it received an unsolicited $23-a-share takeover offer from two private equity firms but said it would stick with its current deal to acquire SeaSpine Holdings Corp. in a $285 million stock swap because it's "unable to conclude" the latest offer is superior. Orthofix shares gained 11% after the close.

Salesforce: Posted higher revenue in the latest quarter and said co-CEO Bret Taylor is leaving a year after he was elevated to run the business-software provider alongside Chairman Marc Benioff. Salesforce shares dropped 6.9% off hours.

Snowflake: Reported quarterly revenue that topped expectations but came up shy with its fourth-quarter sales outlook. Its shares dropped 5.6% off hours.

Splunk: Boosted its full-year outlook for sales and cash flow, following third-quarter results that beat expectations. The stock rose 9% in the after-hours session.

Sturm, Ruger & Co: Declared a special dividend of $5 a share payable on Jan. 5 and cited a current cash balance of $220 million. Shares rose 6% after hours.

Victoria's Secret: Forecast declines in fourth-quarter sales and profit that were below analysts' expectations, with management saying they expected the pain customers have felt from higher prices to continue for the rest of the year. The company's third quarter also suffered from weaker-than-expected sales trends. Shares fell 1.1% after hours.


The dollar's falls since Powell signaled the pace of rate increases may slow in December could be an overreaction and the DXY dollar index is likely to stay above 105.00, ING said.

"His [Powell's] core message was one of stubbornly high core inflation. We continue to take the view that a trade-weighted measure like DXY can hold support levels around the 105 area [or at least will not sustain any break under it.]"

Focus now will center on today's core PCE data and Friday's monthly jobs data, ING said.


Sterling hit a one-week high against a weaker dollar and the gains could extend further depending on upcoming U.S. data, ING said.

The rally in GBP/USD could extend to the 1.22-1.23 area unless the core personal consumption expenditure price index data or the nonfarm payrolls report on Friday "can put a floor back under U.S. yields," ING said.


Crude oil futures inched lower in European trading, with prices giving back some of the sharp post-Powell gains on Wednesday.


Copper prices eased lower in London, while the rest of the base metals complex and gold gained, as investors weighed China's possible reopening and the Fed's signal on monetary policy.




Netflix to Let Tens of Thousands of Subscribers Preview Content

Before Netflix Inc.'s 2021 release of "Don't Look Up," a small group of its U.S. subscribers previewed the film and told the streaming giant that the movie came across as too serious, according to people familiar with the matter.

The film's creators used that feedback to dial up the comedic element of the film and make it appeal to a broader audience, the people said. While the film received lukewarm reviews among critics, "Don't Look Up" was nominated for four Academy Awards and broke a Netflix record for weekly viewing hours of a film, a record it still holds.


Timberland Manager Manulife Moving Into Forest Carbon-Offset Market

One of the country's largest timberland owners is branching out into forest-offset markets, raising a pool of cash to buy properties where sequestering the carbon in standing trees will be prioritized over cutting them down to make wood products.

Manulife Investment Management, which manages on behalf of big investors about 6 million acres of timberland in the Americas and Oceania, said it is aiming to raise a $500 million fund with cash from its parent company, Toronto insurance and financial-services firm Manulife Financial Corp., and other institutional investors.


Tesla to Recall About 435,000 Cars in China

Tesla Inc. is recalling more than 435,000 cars in China, days after the electric-car maker recalled about 80,000 vehicles in the world's largest auto market.

The company has filed a plan with China's State Administration for Market Regulation to recall 142,277 domestically made Model 3 cars and 292,855 domestically made Model Y cars, the top market watchdog said Thursday.


Naloxone Startup Pursues FDA Approval for Over-the-Counter Swab

A startup vying to produce one of the first over-the-counter overdose-reversal medications said it had submitted results to the Food and Drug Administration showing that its drug works more quickly than prescription-only versions.

The randomized trial of 60 healthy volunteers evaluated naloxone absorption from Pocket Naloxone Corp.'s nasal swab versus a 4 milligram nasal-spray delivery and found 74% higher exposure 2.5 minutes after dosing and 19% higher exposure at 5 minutes. Naloxone works by blocking the effects of opioids.


General Electric Sets Healthcare Division Spinoff Plans

General Electric Co. set the terms for the spinoff of its healthcare division, putting an initial value of roughly $31 billion on the soon-to-be-public company.

GE said current shareholders would get one share in the new GE HealthCare Technologies Inc. for every three shares they hold in GE. The separation is set for Jan. 3 after the markets close, and the new shares will trade on Nasdaq under the symbol GEHC.


Mark Zuckerberg Says Apple Holds Too Much Control Over App Ecosystem

Meta Platforms Inc. CEO Mark Zuckerberg said Apple Inc. holds too much sway over the mobile-app ecosystem and that he is still optimistic about his company's metaverse ambitions, even if they might not come to fruition for many years.

"Apple has sort of singled themselves out as the only company that is trying to control, like unilaterally, what apps get on a device," the chief executive said Wednesday at the New York Times' Dealbook Summit in New York City. "I don't think that's a sustainable or good place to be."


TikTok Chief Touts Customer Data-Privacy Initiatives

TikTok Chief Executive Shou Chew said the video-sharing platform is taking greater steps to keep user data secure and that it needs to invest more in protecting young people from getting exposed to harmful content.

"We have very rigorous data-access protocols," he said at the New York Times's Dealbook Summit in New York on Wednesday, adding that TikTok, a unit of Beijing-based ByteDance Ltd., chose Oracle Corp. as its cloud-infrastructure provider because the company has strong security controls.


Starwood-Backed Reverse Mortgage Originator Files for Bankruptcy

Reverse Mortgage Investment Trust Inc., one of the nation's largest mortgage lenders that enables people to tap the equity built up in their homes, has filed for chapter 11 bankruptcy protection.

The Bloomfield, N.J.-based company partly attributed rising interest rates to the disruption of its business. Reverse Mortgage said it faced a liquidity crunch and stopped mortgage origination in early November as it had to increase the capital to support the origination of new loans and to service portfolios. Reverse mortgages are typically made to seniors looking to tap the value built up in their homes.


Sam Bankman-Fried Denies Knowing Scale of Bad Alameda Bets

Sam Bankman-Fried said that he didn't intend to commit any fraud or use customer funds to back leveraged bets that went wrong at Alameda Research, a cryptocurrency hedge fund attached to FTX that pushed the exchange to bankruptcy.

Mr. Bankman-Fried, speaking at the New York Times DealBook Summit in New York, denied knowingly commingling customer funds to back his crypto trading operation and tried to deflect some of the blame for FTX's collapse away from himself, saying he was surprised at the size of Alameda's bets that went wrong.


Spending Report to Offer Clues About Consumers' Strength This Holiday Season

An October household spending report will show how consumers fared as the holiday season approached, with high inflation and rising interest rates weighing on the economy.

The Commerce Department will release spending, income and inflation figures at 8:30 a.m. Eastern time on Thursday. The report will offer a broad picture of consumer health, with spending trends on services such as travel, housing and utilities.


Some Retailers Are Learning to Love Bulked-Up Inventories

While many retailers are discounting, canceling orders and otherwise scrambling to get rid of a glut of goods filling their stores and warehouses, some are embracing their higher inventory levels.

Merchants including Dick's Sporting Goods Inc., Lowe's Cos. and Walmart Inc. say the rising stocks signal a recovery from last year's shortages driven by supply-chain disruptions and put them in a strong position to take advantage of consumer demand this holiday shopping period.


Rising Tether Loans Add Risk to Stablecoin, Crypto World

The company behind the tether stablecoin has increasingly been lending its own coins to customers rather than selling them for hard currency upfront. The shift adds to risks that the company may not have enough liquid assets to pay redemptions in a crisis.

Tether Holdings Ltd. says it lends only to eligible customers and requires that borrowers post lots of "extremely liquid" collateral, which could be sold for dollars if borrowers default.


China Caixin Manufacturing PMI Marks Fourth Straight Month of Contraction

A private gauge of activity in China's manufacturing sector remained in contractionary territory for a fourth straight month in November, as the government's stringent Covid restrictions continued to weigh on both output and demand.

The China Caixin manufacturing purchasing managers index slightly improved to 49.4 in November from 49.2 in October, according to data released Thursday by Caixin Media Co. and S&P Global.


FTX Collapse Draws Senate Hearing Scrutiny as Crypto Oversight in Focus

WASHINGTON-Senators with a plan to regulate cryptocurrencies are due to question the Commodity Futures Trading Commission's chairman about the failure of the digital-asset exchange FTX and on legislation that would give that agency more power over the volatile market.

CFTC Chairman Rostin Behnam is scheduled to testify at Thursday's hearing of the Senate Agriculture Committee. The panel's chairwoman, Sen. Debbie Stabenow (D., Mich.), and its ranking member, Sen. John Boozman (R., Ark.), introduced a bill that would regulate trading in bitcoin, ether and some other cryptocurrencies through the commission. Giving the CFTC, a relatively small agency, authority to police trading in the most valuable crypto assets would mark a substantial expansion of its authority.


Democrats to Reshape Presidential Primary Calendar as Joe Biden Mulls 2024 Bid

WASHINGTON-Democratic National Committee members are struggling to reach consensus on what would be the first major change since 2006 in the party's early-state lineup for presidential primaries, as they await input from the White House.

The national party organization's Rules and Bylaws Committee is set to meet in Washington over two days starting Friday to try to approve a slate of early contests that would offer greater diversity and union representation. The effort has echoes from 16 years ago, when Nevada and South Carolina were selected to join Iowa and New Hampshire to open the 2008 nomination race. The full DNC is expected to ratify changes early next year.


House Approves Imposing Railroad Labor Deal, Paid Sick Leave Measure

The House approved a measure Wednesday to end a long-running railroad labor dispute while also backing a proposal to impose seven days of paid sick leave, as President Biden urged lawmakers to work quickly to head off a possible strike.

House lawmakers voted 290 to 137 on legislation that would force the adoption of a tentative labor agreement by rail workers, using the power of a 1926 law that allows Congress to intervene in railroad disputes that threaten to disrupt the U.S. economy. On paid leave, lawmakers voted 221-207 to approve the proposal, with Democrats in favor and almost all Republicans opposed.




Bank of Montreal 4Q

Canadn Imperial Bank 4Q

Toronto-Dominion Bank 4Q

Economic Indicators (ET):

0830 3Q Labour productivity, hourly compensation & unit labour cost

0930 Nov Canada Manufacturing PMI

Stocks to Watch:

Birks Group Mid-Yr Fiscal 2023 Comparable Store Sales Increased 8.2%


Interfor Completes Acquisition Of Chaleur Forest Products; Prices $200M in Long-Term Debt Financing With Prudential Private Capital


Expected Major Events for Thursday

00:30/JPN: Nov Japan Manufacturing PMI

05:00/JPN: Nov Auto sales

05:00/JPN: Nov Consumer Confidence Survey

06:00/RUS: Nov Russian Manufacturing PMI

07:00/GER: Oct Retail Trade

07:00/UK: Nov Nationwide House Price Index

08:45/ITA: Nov Italy Manufacturing PMI

08:50/FRA: Nov France Manufacturing PMI

08:55/GER: Nov Germany Manufacturing PMI

09:00/ITA: Oct Unemployment

09:30/UK: Nov S&P Global / CIPS UK Manufacturing PMI

12:30/US: Nov Challenger Job-Cut Report

13:00/RUS: Weekly International Reserves

13:30/US: Oct Personal Income & Outlays

13:30/US: 11/26 Unemployment Insurance Weekly Claims Report - Initial Claims

13:30/US: U.S. Weekly Export Sales

13:30/CAN: 3Q Labour productivity, hourly compensation & unit labour cost

14:30/CAN: Nov Canada Manufacturing PMI

14:45/US: Nov US Manufacturing PMI

15:00/US: Nov ISM Report On Business Manufacturing PMI

15:00/US: Oct Construction Spending - Construction Put in Place

15:00/US: Oct Metropolitan Area Employment & Unemployment

15:30/US: 11/25 EIA Weekly Natural Gas Storage Report

16:00/US: Nov Global Manufacturing PMI

17:00/US: Nov Monthly U.S. Retail Chain Store Sales Index

21:00/US: Nov Domestic Auto Industry Sales

21:30/US: Foreign Central Bank Holdings

21:30/US: Federal Discount Window Borrowings

23:50/JPN: Nov Monetary Base

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Expected Earnings for Thursday

Ambarella Inc (AMBA) is expected to report $-0.47 for 3Q.

American Outdoor Brands Inc (AOUT) is expected to report for 2Q.

Asana Inc (ASAN) is expected to report for 3Q.

Bank of Montreal (BMO,BMO.T) is expected to report $3.08 for 4Q.

Big Lots (BIG) is expected to report $-2.90 for 3Q.

Buckle Inc (BKE) is expected to report.

Canadian Imperial Bank of Commerce (CM,CM.T) is expected to report $1.73 for 4Q.

ChargePoint Holdings Inc (CHPT) is expected to report for 3Q.

ClearSign Technologies Corp (CLIR) is expected to report for 3Q.

Designer Brands Inc (DBI) is expected to report for 3Q.

Dollar General (DG) is expected to report $2.54 for 3Q.

Duluth Holdings Inc (DLTH) is expected to report $-0.03 for 3Q.

FP Newspapers (FP.V) is expected to report for 3Q.

G-III Apparel (GIII) is expected to report $1.81 for 3Q.

Inspirato Inc (ISPO) is expected to report for 3Q.

JOANN Inc (JOAN) is expected to report for 3Q.

Kroger Co (KR) is expected to report $0.84 for 3Q.

Lands' End Inc (LE) is expected to report for 3Q.

Methode Electronics (MEI) is expected to report $0.64 for 2Q.

PagerDuty Inc (PD) is expected to report for 3Q.

Patterson Companies (PDCO) is expected to report $0.49 for 2Q.

Provident Bancorp Inc (PVBC) is expected to report for 3Q.

Rex American (REX) is expected to report for 3Q.

Samsara Inc (IOT) is expected to report for 3Q.

SecureWorks Corp (SCWX) is expected to report $-0.37 for 3Q.

Smartsheet Inc (SMAR) is expected to report $-0.53 for 3Q.

Tilly's (TLYS) is expected to report $0.07 for 3Q.

Toronto-Dominion Bank (TD,TD.T) is expected to report $2.08 for 4Q.

UiPath Inc (PATH) is expected to report for 3Q.

Ulta Beauty Inc (ULTA) is expected to report $4.20 for 3Q.

Veeva Systems (VEEV) is expected to report $0.68 for 3Q.

Zscaler Inc (ZS) is expected to report $-0.57 for 1Q.

Zumiez (ZUMZ) is expected to report $0.18 for 3Q.

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American Homes 4 Rent Cut to Peer Perform From Outperform by Wolfe Research

Antero Resources Cut to Hold From Buy by Tudor Pickering

Apollo Endosurgery Cut to Hold From Buy by Lake Street

Carvana Cut to Neutral From Buy by B of A Securities

Consolidated Edison Raised to Neutral From Underperform by B of A Securities

Cooper Cos Raised to Outperform From Neutral by Baird

Coterra Energy Cut to Hold From Buy by Tudor Pickering

CrowdStrike Holdings Cut to Hold From Buy by Stifel

EQT Corp Cut to Hold From Buy by Tudor Pickering

Invitation Homes Cut to Peer Perform From Outperform by Wolfe Research

LPL Financial Holdings Cut to Equal-Weight From Overweight by Morgan Stanley

MillerKnoll Cut to Hold From Buy by Benchmark

PennyMac Mtg Invt Tr Cut to Hold From Buy by JonesTrading

Solid Power Cut to Neutral From Buy by DA Davidson

SoundHound AI Raised to Overweight From Neutral by Cantor Fitzgerald

Southwest Gas Cut to Neutral From Buy by B of A Securities

Steelcase Cut to Hold From Buy by Benchmark

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


(END) Dow Jones Newswires

December 01, 2022 06:13 ET (11:13 GMT)

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