U.S. International Trade for October; Canada Trade Balance for
Today's Headlines/Must Reads
- Investors Yank Money From Commercial-Property Funds,
Pressuring Real-Estate Values
- Facebook Threatens to Pull News From Platform if Bill Passes
- Oil Prices and Energy Stocks Are Headed in Different
Directions. What Gives?
- China's Covid Easing Fuels Stock-Market Hopes-and Fans
- California Lawmakers to Consider Penalties on Oil Companies to
Fight High Gas Prices
- TSMC Raises Arizona Chip Investment to $40 Billion as Biden
Follow WSJ markets coverage here .
Stock futures struggled for momentum on Tuesday, suggesting Wall
Street would find it difficult to rebound from a poor start to the
week, after stronger-than-expected economic data in recent days
raised fears about further rate rises by the Federal Reserve.
"Ultimately it matters more where the Fed ends up and not how
fast they get there, and the tighter-than-expected labor market
combined with the boisterous business sentiment index gives more
clout to the +5% terminal camp," SPI Asset Management said.
Technical analysts noted that the market's latest relapse came
after it failed once again to break above an established
Pointing to a chart of the S&P 500, commentators at the
MarketEar.com suggested that much of the recent rally off the
mid-October low was powered by those investors who short the market
scrambling to cover their positions rather than any fundamental
"The crowd did it again, covering shorts in panic. We are once
again below that 200 day [moving average on the S&P 500] that
got so many people excited and we saw some bears throw in the
towel," MarketEar said.
"A close [on Monday] here or lower and things could get
'dynamic' to the downside. Don't forget the market will become less
and less liquid as we approach Christmas."
Overseas indexes were mostly weaker, tracking Monday's losses on
Wall Street. The Hang Seng dropped 0.4%, although shares in China
and Japan made modest gains. In Europe, the Stoxx Europe 600 eased
back 0.1% in early trading.
Stocks to Watch
Herbalife Nutrition said it would offer a $250 million aggregate
principal amount of convertible senior notes in a private offering.
Its common shares fell 11% in after-hours trading.
GitLab reported better-than-expected revenue in the latest
quarter and lifted its 2023 guidance. Its shares rose 20%
MEI Pharma said it would discontinue development of cancer
treatment zandelisib outside of Japan, after recent guidance from
the FDA. MEI also said it planned a staggered reduction of about
30% of its workforce. MEI shares fell 31% after hours.
Powell Industries said fourth-quarter revenue increased 26%,
boosted by $259 million in new orders. Net income rose to $8.7
million. Its shares rose 19% in after-hours trading.
Salesforce was up 0.7% in premarket trading following a slump of
7% after it was announced on Monday that Slack founder and CEO
Stewart Butterfield was resigning from the company, effective Jan.
Sumo Logic raised its fiscal-year sales outlook and the company
forecast an adjusted loss of 35 cents to 36 cents a share, narrower
than Wall Street expectations. The stock gained 11.5% after
Textron was awarded a contract to build aircraft for the U.S.
Army's Future Long-Range Assault Aircraft program. The award was
based on Bell Textron's V-280 Valor tiltrotor, the company said.
Textron didn't disclose terms of the contract though Bloomberg
reported the contract was worth up to $1.3 billion. The stock
gained 8% in after-hours trading.
China may undergo some forms of a disorderly exit from its
zero-Covid policy over the next three to four months, Loomis Sayles
Investments said. Local Covid-19 infections will spike and
overwhelm the country's healthcare system, but that period should
be relatively short, it said.
Chinese equities have been rallying as investors look past
near-term prospects to China's economic activity normalizing by
mid-2023, Loomis Sayles said. Another factor to consider is that an
accelerated China reopening may be an inflationary driver for the
rest of the world from second half of next year.
The dollar continued to edge higher in Europe after the
stronger-than-expected ISM non-manufacturing report dampened
expectations the Fed could pivot on its aggressive interest rate
"The longer U.S. data surprises on the upside and the longer the
U.S. economy is robust the more doubts are probably going to
increase as to whether the U.S. will actually face a recession next
year and whether the U.S. central bank will actually cut its key
rate at that stage," Commerzbank said.
It said the dollar may stabilize over coming weeks following the
pronounced depreciation over past weeks.
The euro looks vulnerable to a potential renewed rise in energy
prices as the eurozone's supply issues persist, ING said.
"The freshly imposed EU embargo on Russian seaborne crude and
the $60 per barrel price cap may start to show their effects on the
energy market soon. When adding an expected drop in temperatures in
Europe from this week, the risks of a new rally in energy prices
are non-negligible, and the euro is highly exposed to such
EUR/USD is "mostly facing downside risks," ING said.
Crude futures held solid gains in European trading, after
Beijing relaxed rules on Covid-19 testing, helping sentiment in the
"China's reopening sentiment should provide a plank for the
crude price to springboard off," said SPI Asset Management.
Base metals were mixed early in the London session, with gold
little changed, as traders remained uncertain on whether the Fed
will keep hiking rates into next year.
Positive economic data on Monday "lifted interest rate
expectations and helped propped the dollar higher," weighing on
metals, Marex said.
Elsewhere, Bloomberg reported that the EU and U.S. are
considering tariffs on Chinese aluminum and steel, citing unnamed
TODAY'S TOP HEADLINES
Facebook Threatens to Pull News From Platform if Congress Passes
Bill Helping Publishers
Meta Platforms Inc. is threatening to remove news from Facebook
in the U.S. if Congress passes legislation meant to help publishers
team up to negotiate payments from tech companies, echoing similar
warnings that the company has lobbed at various governments around
"If Congress passes an ill-considered journalism bill as part of
national security legislation, we will be forced to consider
removing news from our platform altogether rather than submit to
government mandated negotiations that unfairly disregard any value
we provide to news outlets through increased traffic and
subscriptions," Meta tweeted on Monday as part of a longer
statement condemning the bill, known as the Journalism Competition
and Preservation Act.
Uber Reaches Settlement with Chicago Over Fees and Restaurant
Uber Technologies Inc. agreed to a multimillion-dollar
settlement with the city of Chicago over what authorities there
called deceptive practices at UberEats and Postmates.
Restaurants were listed without their consent and were charged
excessive fees, according to a two-year investigation by the
California Lawmakers to Consider Penalties on Oil Companies to
Fight High Gas Prices
California legislators opened a special session Monday to
explore the possibility of levying penalties on the oil industry
for what Democratic Gov. Gavin Newsom has called price-gouging of
A draft of the legislative proposal released Monday by Mr.
Newsom laid out a framework that would set an annual maximum profit
margin for oil refiners and create a tiered system of penalties
based on how much a company's margin deviates from the state-set
maximum. Mr. Newsom declined to provide specific thresholds, saying
the details were yet to be worked out with lawmakers.
TSMC Raises Arizona Chip Investment to $40 Billion as Biden
Taiwan Semiconductor Manufacturing Co. plans to build a second
semiconductor factory in Arizona and increase its investment there
to $40 billion, the White House said ahead of a visit by President
TSMC, the world's largest contract chip maker, is stepping up
its plans for U.S. manufacturing with encouragement from the Biden
administration and likely financial support from U.S. taxpayers,
reflecting Washington's concerns about reliance on Asia for
critical chip making.
PepsiCo to Lay Off Hundreds of Workers in Headquarters Roles
PepsiCo Inc. is laying off workers at the headquarters of its
North American snacks and beverages divisions, a signal that
corporate belt-tightening is extending beyond tech and media,
according to people familiar with the matter and documents reviewed
by The Wall Street Journal.
Hundreds of jobs will be eliminated, one of the people said. The
cuts affect the company's North America beverage business, which is
based in Purchase, N.Y., and its North America snacks and
packaged-foods business, which has headquarters in Chicago and
Plano, Texas, the people said.
Citi on verge of agreement to get back what it accidentally paid
to Revlon's lenders, court filing shows
Finders keepers, losers weepers is not always the law of the
Hedge funds are on the verge of reluctantly returning some $500
million that Citigroup C accidentally gave to them three years ago,
a court filing shows.
Lovell Minnick Seeks $1.5 Billion for Newest Buyout Fund
Lovell Minnick Partners is seeking a modest increase in size for
its newest buyout fund.
The Radnor, Pa.-based firm is targeting $1.5 billion for Lovell
Minnick Equity Partners VI, to take control and minority positions
in companies in the financial services industry and related
sectors, according to documents prepared for the Massachusetts
Pension Reserves Investment Management Board, which managed $92.4
billion as of June 30, 2022.
Taylor Swift Fans Sue Ticketmaster After 'Eras Tour' Sales
More than two dozen Taylor Swift fans sued Ticketmaster in a
California court for anticompetitive and fraudulent behavior after
they alleged the company blocked them from buying tickets this past
month to the musician's concerts.
In the lawsuit, filed in Los Angeles County Superior Court, the
fans said Ticketmaster knew the sale would be plagued with issues
in part because it had let too many people access the presale.
Investors Yank Money From Commercial-Property Funds, Pressuring
Big and small investors are queuing up to pull money out of
real-estate funds, the latest sign that the surge in interest rates
is threatening to upend the commercial-property sector.
Blackstone Inc. last week said it would limit the amount of
money investors could withdraw from its $69 billion flagship
real-estate fund following a surge in redemption requests. Starwood
Capital Group shortly after notified investors that it was also
restricting withdrawals in a $14.6 billion fund, according to a
person familiar with the matter.
Oil Prices and Energy Stocks Are Headed in Different Directions.
Oil is sitting out Wall Street's year-end rally.
While recent hopes that inflation has peaked sparked sharp gains
in stocks and bonds, oil prices just bounced off their 2022 lows,
hit by worries about slowing global growth eating into demand for
fuel. Early gains for crude Monday, triggered by easing Covid
restrictions in China and a price cap on Russian oil, quickly
China's Covid Easing Fuels Stock-Market Hopes-and Fans Fears
Chinese stocks have recently been whipsawed by the country's
attempts-and its numerous struggles-to move past the Covid-19
Investors say it is only the beginning of what is likely to be a
long and tumultuous period, as Beijing tries to pivot from a
zero-tolerance Covid policy characterized by lockdowns and numerous
restrictions to living with the virus and limiting its damage to
the economy. Economists and strategists say China's path to
reopening in the coming year is littered with hurdles that make it
difficult for investors to predict the impact on domestic spending,
corporate earnings and the country's stock market.
RBA Raises Rates; Says Path to Soft Landing Is Narrow
SYDNEY-The Reserve Bank of Australia continued to raise interest
rates cautiously at its final board meeting for the year,
maintaining the pace of increases despite early signs that
inflation may be peaking.
The RBA on Tuesday raised the official cash rate by 25 basis
points to 3.10%. It was the third straight month that the RBA,
which said it still expects to raise rates further, increased
borrowing costs by that amount.
German Factory Orders Rebounded More Than Expected in
Manufacturing orders in Germany increased in October after
falling the previous two months, a sign demand for goods could be
Factory orders rose 0.8% in October compared with the previous
month, according to price-adjusted data from the German statistics
office Destatis released Tuesday.
Why Monday's stock-market rout should be a wake up call for
Monday's punishing selloff could be the beginning of the next
leg lower for stocks as a sense of complacency has taken hold in
markets following a stellar October and November, several
strategists told MarketWatch.
In a note to clients on Monday, Jonathan Krinsky, chief
technical strategist at BTIG, said that U.S. stocks were primed to
tumble after the S&P 500 SPX bounced off its latest resistance
level, which coincided with the index's 200-day moving average, a
key technical level for assets. Krinsky illustrated the pattern in
a chart included below.
Warnock, Walker Close Out in Senate Runoff as Georgia Voters
Head to Polls
ATLANTA-Georgia voters head to the polls Tuesday in a runoff
election that will determine whether incumbent Democratic Sen.
Raphael Warnock goes back to Washington or he is replaced by GOP
challenger Herschel Walker.
Mr. Warnock spent election eve holding various get-out-the-vote
events with younger people in Democratic-leaning Atlanta, while Mr.
Walker spent much of the day at rallies in Republican areas of the
Biden Backs Tying Energy Permitting Plan to Defense Policy
WASHINGTON-The White House said President Biden supports
including a proposal to speed up environmental reviews of energy
projects in an annual defense-policy law, as lawmakers prepare to
unveil the proposal as soon as this week.
White House press secretary Karine Jean-Pierre stated support
for the permitting proposal's inclusion at a press briefing on
Monday. Mr. Biden "believes we should pass the defensive
authorization bill and that the permitting bill should be included
in the legislation," Ms. Jean-Pierre said.
U.S., EU Agree to Coordinate Semiconductor Subsidy Programs
COLLEGE PARK, Md.-Top U.S. and European Union officials agreed
to work closely to strengthen semiconductor supply chains,
including sharing information about their respective programs to
provide massive subsidies to promote domestic chip production.
At a Monday gathering to discuss trade and technology issues,
however, the two sides failed to make progress on a dispute over
the U.S.'s new electric-vehicle program that has strained bilateral
ties, an issue that was raised by French President Emmanuel Macron
during his meeting with President Biden last week.
Write to firstname.lastname@example.org TODAY IN CANADA
Evertz Tech 2Q
Economic Indicators (ET):
0830 Oct Trade Balance
1000 Nov Ivey Purchasing Managers Index
Stocks to Watch:
Advantage Energy: Alberta Securities Commission Has Permitted
Advantage to Extend Substantial Issuer Bid Without First Taking Up
Any Common Shares; Advantage Energy: Haven't Determined if It Will
Canfor: Will Temporarily Curtail Canadian Production Capacity
Due to Very Weak Market Conditions; To Reduce Production at All
Solid Wood Facilities in B.C., Alberta; Around 150M Board Feet of
Production to Be Removed in Dec, Jan
Expected Major Events for Tuesday
00:01/UK: Nov BRC-KPMG Retail Sales Monitor
02:00/JPN: Nov Imported Vehicle Sales
07:00/GER: Oct Manufacturing orders
07:00/GER: Oct Manufacturing turnover
08:59/JPN: Oct Provisional Labour Survey - Earnings, Employment
& Hours Worked
09:30/UK: Nov S&P Global / CIPS UK Construction PMI
11:00/FRA: Oct OECD CPI
13:30/CAN: Oct International merchandise trade
13:30/US: Oct U.S. International Trade in Goods &
13:55/US: 12/03 Johnson Redbook Retail Sales Index
15:00/CAN: Nov Ivey Purchasing Managers Index
21:30/US: 12/02 API Weekly Statistical Bulletin
23:50/JPN: Nov International Reserves / Foreign Currency
23:50/JPN: Nov Provisional Trade Statistics for 1st 20 days of
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Expected Earnings for Tuesday
AeroVironment (AVAV) is expected to report $-0.09 for 2Q.
Alico (ALCO) is expected to report $-0.25 for 4Q.
AltiGen Communications (ATGN) is expected to report for 4Q.
AutoZone Inc (AZO) is expected to report $25.12 for 1Q.
Avid Bioservices Inc (CDMO) is expected to report $-0.01 for
Barnes & Noble Education Inc (BNED) is expected to report
$0.77 for 2Q.
CSP Inc (CSPI) is expected to report for 4Q.
California First Leasing Corp (CFNB) is expected to report for
Casey's General Stores (CASY) is expected to report $3.09 for
Cenntro Electric Group Ltd (CENN) is expected to report for
Conn's (CONN) is expected to report $-0.55 for 3Q.
Couchbase Inc (BASE) is expected to report for 3Q.
Dave & Buster's Entertainment Inc (PLAY) is expected to
report $0.03 for 3Q.
Emcore (EMKR) is expected to report $-0.20 for 4Q.
Evertz Technologies (ET.T,EVTZF) is expected to report $0.17 for
FTI Consulting (FCN) is expected to report $1.32 for 4Q.
Fastenal Co (FAST) is expected to report.
Guidewire Software Inc (GWRE) is expected to report $-0.79 for
Healthequity Inc (HQY) is expected to report $-0.10 for 3Q.
IES Holdings Inc (IESC) is expected to report for 4Q.
J.Jill (JILL) is expected to report for 3Q.
MongoDB Inc (MDB) is expected to report $-1.57 for 3Q.
Oil Dri Corporation of America (ODC) is expected to report for
Orvana Minerals (ORV.T,ORVMF) is expected to report for 4Q.
Qualstar Corp (QBAK) is expected to report for 3Q.
SentinelOne Inc (S) is expected to report for 3Q.
Skillsoft Corp (SKIL) is expected to report for 3Q.
Smart Share Global Ltd - ADR (EM) is expected to report for
Smith & Wesson Brands Inc (SWBI) is expected to report for
Sprinklr Inc (CXM) is expected to report for 3Q.
Stitch Fix Inc (SFIX) is expected to report $-0.47 for 1Q.
Toll Brothers Inc (TOL) is expected to report $3.95 for 4Q.
Zuora Inc (ZUO) is expected to report $-0.20 for 3Q.
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ANALYST RATINGS ACTIONS
Allegiant Travel Cut to Equal-Weight From Overweight by Morgan
Angel Oak Mortgage Cut to Underperform From Buy by B of A
Callon Petroleum Raised to Neutral From Underweight by JP
Comcast Raised to Equal-Weight From Underweight by Wells
Diamondback Energy Raised to Buy From Accumulate by Johnson
Domino's Pizza Raised to Buy From Neutral by BTIG
EOG Resources Cut to Hold From Buy by Johnson Rice
Huntington Bancshares Raised to Overweight From Equal-Weight by
Laredo Petroleum Cut to Underweight From Neutral by JP
MGM Resorts Raised to Buy From Hold by Truist Securities
Murphy Oil Raised to Overweight From Neutral by JP Morgan
NetApp Cut to Hold From Buy by Loop Capital
Signature Bank Cut to Equal-Weight From Overweight by Morgan
Silvergate Capital Cut to Underweight From Equal-Weight by
Spire Inc Cut to Neutral From Overweight by JP Morgan
Starbucks Cut to Hold From Buy by Deutsche Bank
Terex Cut to Hold From Buy by Deutsche Bank
United Airlines Raised to Overweight From Equal-Weight by Morgan
VF Corp Cut to Neutral From Outperform by Credit Suisse
Wabash Natl Cut to Hold From Buy by Vertical Research
This article is a text version of a Wall Street Journal
newsletter published earlier today.
(END) Dow Jones Newswires
December 06, 2022 06:19 ET (11:19 GMT)
Copyright (c) 2022 Dow Jones & Company, Inc.