Watch For:

Personal Income & Outlays for December; University of Michigan Final Consumer Survey for January; earnings from American Express, Chevron, Colgate-Palmolive

Today's Headlines/Must Reads

- Tesla Has Become One of the Hottest Stock-Option Trades on Wall Street

- Fed to Deliver Quarter-Point Hike Along with 'One Last Hawkish Sting in the Tail'

- Consumer Spending, Inflation Data Due in Commerce Department Report

- Debt Ceiling Clash Revives Dispute Over Paying Bondholders First

- Infrastructure Companies Say Suppliers Pose a Growing Cyber Threat

Follow WSJ markets coverage here .

Opening Call:

Stock futures slipped on Friday ahead of key economic data, as traders weigh whether to extend a rally fueled by hopes the Federal Reserve is nearing an end to its aggressive rate-hike campaign.

Analysts said the details of economic data released Thursday were softer than they appeared at the headline, and seem to show an economy deteriorating if not outright headed for a recession.

ABN Amro said the GDP report showed an acceleration of the deterioration in investment, while more volatile components such as inventories and governnment spending drove the strength in the report.

"Given the weakness evident late in the fourth quarter, as well as the incoming data for January so far, we continue to expect Q1 GDP to show a decline in output, with our current estimate for around a 1% annualized contraction," ABN Amro said.

"We expect declining output to persist into Q2, which would meet the technical recession definition of two consecutive quarters of falling output."

Friday's data releases include the PCE price index, the Fed's preferred measure of inflation. The core PCE price index is seen decelerating to a 4.4% year-over-year rate in December from 4.7% in November.

Lloyds Bank also is forecasting core PCE at a 4.4% rate, and the headline number at 4.9%, down from 5.5%, in addition to personal spending dropping 0.2%.

"Such outturns would reaffirm that inflation is on the way down and economic growth is slowing, adding to expectations that U.S. interest rates are close to peaking," Lloyds Bank said.

Intel was in the spotlight after the microchip maker missed expectations on adjusted earnings and revenue.

Stocks to Watch

BuzzFeed stock advanced off-hours, after more than doubling Thursday. The rally began after BuzzFeed said it would use ChatGPT creator OpenAI to enhance its quizzes and personalize some content.

Hasbro said it would cut 15% of staff, and that revenue had tumbled by a steeper-than-expected 17% to $1.7 billion. Shares dropped more than 6% off-hours.

Intel posted a larger-than-expected fourth-quarter loss of $664 million, hurt by a souring market for its chips and growing competition, and gave a gloomy outlook. Intel stock dropped more than 9% off-hours.

Read Intel's Data Warning Hits AMD, Nvidia. Chip Sector Upheaval Ahead

KLA delivered third-quarter revenue guidance that came in below analysts expectations, with its shares falling 6% in after-hours trading as a result.

Visa said profit on the basis of generally accepted accounting principles rose 6% to $4.2 billion, on revenue up 12% to $7.9 billion. Visa stock added about 1% in out-of-hours trading.


Dollar selling has started to fade as investors gear up for key central bank decisions next week.

"After the optimism fuelled by China reopening and falling natural gas prices that weakened the dollar, some reversal of that sentiment should result in some renewed strengthening," MUFG Bank said.

A dollar recovery is possible though moves will be limited ahead of the rate decisions, it said.

Read Fed, ECB See Policy Tightening as 'Long-Distance Run'

Read Investors Eye Yen With Tokyo Inflation at Multidecade High


Oil prices made modest gains in Europe but were set to end the week flat as the market awaited clues on Chinese demand and as the focus turns to OPEC.

An OPEC+ advisory committee is set to meet next week and is likely to recommend the cartel keeps its production levels unchanged, ANZ said.

The cartel is likely to await clarity on Chinese demand for oil this year after its reopening and the impact of fresh sanctions on Russia set to come into force early next month, ANZ added.


Base metals were mixed, with gold lower, ahead of China and other Asian markets returning to trading next week following the Lunar New Year break.

China's return is expected to boost metal demand, particularly after strict Covid-19 lockdown restrictions tapered buying.

"Bullish sentiment is swaying prices, with metals markets enjoying strong upward momentum ever since Beijing shifted its strategy on Covid-19," Fitch said.

It expects a further uplift in both physical demand and prices from the second quarter amid a weaker dollar.




Tesla Has Become One of the Hottest Stock-Option Trades on Wall Street

Speculators' love of wagering on Tesla Inc. has propelled Elon Musk's electric-vehicle maker into one of the hottest stock-option trades on Wall Street.

Tesla options trading has surged recently: Nearly three million contracts now change hands on an average day, according to Cboe Global Markets data. That is up from 1.5 million a year ago and more than any other stock. Only wagers on the SPDR S&P 500 ETF outpace those on Tesla.


Infrastructure Companies Say Suppliers Pose a Growing Cyber Threat

Companies in critical infrastructure sectors say weak cyber defenses at suppliers are becoming a significant threat to their business, and that rules to boost security down the supply chain might be needed.

While federal and industry rules for specific areas such as aviation, pipeline companies and other critical infrastructure operators are well-established, said Curley Henry, vice president and deputy chief information security officer at power utility Southern Co., cyber regulations for businesses supplying those operators are less so.


Intel's Data Warning Hits AMD, Nvidia. Chip Sector Upheaval Ahead.

Intel's disappointing results and warning of a contracting data-center market knocked the stock in some of its key rivals on Friday.

Intel (ticker: INTC) shares were down 10% in premarket trading after the chip maker missed expectations for the fourth quarter and provided a revenue forecast for its March quarter far below expectations.


Adani Pushes On With Offering as Group Stocks Extend Selloff

India's Adani Enterprises Ltd. on Friday started taking orders for its $2.45 billion secondary share offering, even as stocks of many of the group's companies extended a selloff in the wake of a critical report by U.S. short seller Hindenburg Research.

Adani Total Gas Ltd. and Adani Green Energy Ltd. both slid about 20%, the lower limit on the Bombay Stock Exchange. Adani Transmission Ltd. was 19% lower in afternoon trading, Adani Ports & Special Economic Zone Ltd. lost 18% and Adani Enterprises shed 16%.


Fed set to deliver quarter-point rate hike along with 'one last hawkish sting in the tail'

The Federal Reserve will downshift to a 25 basis point rise in its policy interest rate at their upcoming interest-rate meeting and will work overtime to make sure that the market doesn't get the idea that rate increases are finished, economists said.

"Despite the good news on inflation and being one step closer to done, it's likely too soon for the Fed to stop raising rates and likely too soon to signal a stop is imminent," said Jonathan Pingle, economist at UBS.


Consumer Spending, Inflation Data Due in Commerce Department Report

A report Friday will give details on the economic health of U.S. consumers at the end of a year, when they faced elevated inflation and rising interest rates.

The Commerce Department will release December spending, income and inflation figures at 8:30 a.m. ET. The report will offer a picture of the closing month of 2022 as the holiday season wrapped up, including spending on travel, medical care and other services.


Debt Ceiling Clash Revives Dispute Over Paying Bondholders First

The latest fight over raising the federal debt limit has renewed a debate over whether the government should pay some bills and delay others if the White House and Congress fail to raise the cap before it is breached.

Some Republicans say the Treasury Department can and should give priority to paying holders of U.S. government securities to prevent a default on the debt and to minimize any harm to the financial system. That would mean delaying payment of other government obligations, such as bills for transportation, agriculture and education programs.


China's Portrayal of Smooth Covid Exit Leaves Scientists Wanting More Data

HONG KONG-China published a raft of data this week in an effort to show the peak of its Covid-19 wave has passed, though public-health experts continue to question whether Beijing has been transparent enough to enable them to accurately assess the situation.

Chinese health authorities said that the daily number of Covid-19 deaths in hospitals topped out at around 4,300 in early January, and by the middle of the weeklong Lunar New Year holiday that ended Friday was down nearly 80% from that level.


French Union Cuts Power to Pressure Macron on Pensions

PARIS-To fight President Emmanuel Macron's pension overhaul, France's most militant labor union is pursuing a radical strategy: cutting electricity to his political supporters and the wealthy while handing out discounted power and gas to the public.

During a nationwide strike last week, members of the far-left CGT union who work in the energy sector cut power to the office of a lawmaker from Mr. Macron's party for more than three hours. On Monday, CGT energy workers in Marseille manipulated electricity and gas meters to cut bills for bakers who were protesting in the French port city against high energy prices. CGT's leadership called such moves a "Robin Hood" operation and said they would continue as the country prepares for another national protest on Tuesday.


Republicans to Pick Party Leader as Some Call for Ousting Ronna McDaniel

DANA POINT, Calif.-The Republican National Committee on Friday is set to resolve a leadership fight that has revealed party divisions and opposition to incumbent Ronna McDaniel from both the grass-roots and some of the GOP's rising stars.

Interviews at the luxury Southern California resort where members are meeting this week suggest Ms. McDaniel is favored to win re-election as party chair following a contentious campaign within the traditionally clubby RNC.


Lawmakers Press for Access to Biden, Trump Classified Documents

WASHINGTON-Senate Intelligence Committee lawmakers are weighing how to force the intelligence community to turn over the classified documents that ended up in the personal possession of two presidents.

Special counsels are probing the discovery of classified documents in the home and former office of President Biden and the Mar-a-Lago residence of former President Donald Trump, and classified documents were also found recently at former Vice President Mike Pence's home. The Senate panel has been unable to obtain access to the underlying Biden and Trump material, thwarting its ability to assess the threat to national security, the extent of any damage, and the potential need for changes to procedures and laws.


Biden Administration Blocks Mining Near Minnesota Wilderness Area

The Biden administration moved Thursday to block mining upstream of the Boundary Waters Canoe Area of Northern Minnesota for 20 years, opting to protect a pristine wilderness over allowing production of minerals that could help fuel a potentially cleaner future.

The administration last year canceled two federal mineral rights leases held by Twin Metals Minnesota LLC, a unit of Chilean mining firm Antofagasta Minerals SA. The latest move could kill the company's planned underground copper-nickel mine, although Twin Metals said it would continue to fight the cancellation.




Champion Iron 3Q

Real Matters 1Q

Economic Calendar:

None scheduled

Stocks to Watch

B2Gold Targets 30% Reduction in GHG Emissions by 2030 and Announces Expansion of the Fekola Solar Plant; Plant Expansion Expected to Increase Solar Power Capacity by 22 MWac, Reduce GHG Emissions by About 24,000 Tonnes Per Yr


Expected Major Events for Friday

00:01/UK: 4Q BRC-LDC Vacancy Monitor

00:30/JPN: Dec Detailed Import & Export Statistics

07:45/FRA: Jan Consumer confidence survey

07:45/FRA: Dec Housing starts

09:00/ITA: Nov Industrial turnover

09:30/UK: Dec Capital issuance statistics

13:30/US: Dec Personal Income & Outlays

15:00/US: Dec Pending Home Sales Index

15:00/US: Jan University of Michigan Survey of Consumers - final

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


Expected Earnings for Friday

American Express Co (AXP) is expected to report $2.19 for 4Q.

Badger Meter Inc (BMI) is expected to report for 4Q.

Blade Air Mobility Inc (BLDE) is expected to report for 4Q.

Booz Allen Hamilton Holding Corp (BAH) is expected to report $1.02 for 3Q.

Central Valley Community Bancorp (CVCY) is expected to report for 4Q.

Charter Communications Inc (CHTR) is expected to report $8.69 for 4Q.

Chevron Corp (CVX) is expected to report $4.60 for 4Q.

Colgate-Palmolive Co (CL) is expected to report $0.75 for 4Q.

Community West Bancshares (CWBC) is expected to report for 4Q.

Dime Community Bancshares Inc (DCOM) is expected to report for 4Q.

First Hawaiian Inc (FHB) is expected to report $0.58 for 4Q.

Gentex Corp (GNTX) is expected to report $0.40 for 4Q.

HCA Healthcare Inc (HCA) is expected to report $4.76 for 4Q.

Hawthorn Bancshares (HWBK) is expected to report for 4Q.

HomeStreet Inc (HMST) is expected to report $0.76 for 4Q.

IF Bancorp Inc (IROQ) is expected to report for 2Q.

LCNB Corp (LCNB) is expected to report for 4Q.

Norwood Financial Corp (NWFL) is expected to report for 4Q.

Oppenheimer Holdings (OPY) is expected to report for 4Q.

Pacific Financial (PFLC) is expected to report for 4Q.

Peapack Gladstone (PGC) is expected to report $1.12 for 4Q.

Provident Financial Holdings Inc (PROV) is expected to report $0.33 for 2Q.

Provident Financial Services Inc (PFS) is expected to report $0.63 for 4Q.

Real Matters Inc (REAL.T) is expected to report $-0.06 for 1Q.

Red River Bancshares Inc (RRBI) is expected to report for 4Q.

Republic Bancorp Inc (RBCAA) is expected to report $0.95 for 4Q.

Roper Technologies Inc (ROP) is expected to report $2.51 for 4Q.

Schmitt Industries (SMIT) is expected to report for 2Q.

Silver Bull Resources Inc (SVB.T) is expected to report for 4Q.

Sound Financial Bancorp (SFBC) is expected to report for 4Q.

Southside Bancshares (SBSI) is expected to report for 4Q.

Stellar Bancorp Inc (STEL) is expected to report for 4Q.

Tompkins Financial (TMP) is expected to report $1.42 for 4Q.

United Security Bancshares (UBFO) is expected to report for 4Q.

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ANALYST RATINGS ACTIONS There are no actions to report from the last 24 hours.

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


(END) Dow Jones Newswires

January 27, 2023 11:31 ET (16:31 GMT)

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