ADP National Employment Report for May, Weekly Jobless Claims,
Revise Productivity and Costs, ISM Report on Business Manufacturing
PMI, EIA Weekly Petroleum Status Report
Today's Headlines/Must Reads
- House Approves Debt-Ceiling Deal Struck by Biden and
- Profit Numbers Get Spruced Up as Business Slows
- ESG Blowback: Exxon, Chevron Investors Reject Climate
- Traders Unfazed by Potential OPEC Production Cuts
Follow WSJ markets coverage here .
Stocks were on course for a muted start on Thursday, but with
support provided by easing debt-ceiling angst, better China data
and hopes official U.S. interest rates would not rise this
The House of Representatives voted 314-117 in favor of a crucial
debt-ceiling bill on Wednesday night, keeping Washington on track
to avoid a technical default by June 5.
There was no great relief bounce in futures, however. The
S&P 500 sits just shy of 10-month highs suggesting many
investors were not pricing in the default scenario.
Investors were also parsing the latest comments from Federal
Reserve officials who implied the central bank should not raise
interest rates in less than two weeks time.
The chances of a 25 basis point rate hike by the Fed to a range
of 5.25% to 5.5% on June 14 has fallen from 67% on Wednesday to 36%
Read Fed Prepares to Skip June Rate Rise but Hike Later
There was also better news on China's economy. The Caixin survey
of smaller manufacturers released earlier on Thursday showed the
sector expanding slightly in May, better than expected.
Read China Caixin Manufacturing PMI Returns to Expansion
Premarket fallers were dominated by software names as several
companies failed to meet expectations when it came to forward
stock fell 20% in premarket trading after its earnings outlook
failed to live up to the hype.
CrowdStrike stock fell close to 11% as revenue growth slowed and
the company's full-year forecast fell short of expectations.
Shares of Okta were down 19% ahead of the open despite it
beating earnings estimates and raising full-year guidance. A
warning from its CEO about increasing macroeconomic pressures
appeared to spook investors.
Salesforce shares fell more than 5% after investors were left
disappointed that the company didn't raise its full-year guidance
following better-than-expected first-quarter earnings.
Nordstrom stock was up 7.5% ahead of the open after it beat
earnings and sales estimates in the first quarter. The company also
reiterated its outlook for the full fiscal year
The dollar has stalled, pulling away from recent highs, after
two Fed officials suggested the central bank could opt to keep
interest rates steady in June and raise them in July instead.
As a result, the dollar shrugged off approval of the
debt-ceiling deal, and the comments will make upcoming data key in
determining whether the Fed does indeed skip a rate rise in June,
The dollar could edge marginally lower if Thursday's ADP,
jobless claims and ISM manufacturing data are on the weak side,
although moves should be limited ahead of Friday's key monthly jobs
figures, ING said.
The euro was little moved even after data showed eurozone
inflation eased by more than expected in May.
Lower-than-expected Spanish, French and German inflation data
earlier in the week had the market speculating about a soft
eurozone inflation print so was unlikely to materially impact the
euro, ING said.
Read Cooling Eurozone Inflation Opens Path for ECB Rate
The current economic cycle is looking good for the performance
of bonds, with the asset class likely to generate "very strong"
returns in 2023 and 2024, Schroders said.
It said bond markets generally perform strongly when inflation
is decelerating, growth is softening, and when central banks cut
"It is highly likely all those three play out this year,"
Under certain conditions including the duration of a fund,
interest rate cuts could mean very high single digit, or
potentially double digit returns from fixed income, it added.
"The environment to me feels like the 90s when we saw 600 basis
points in bond yield, and that was in 1994."
Oil prices edged higher as Chinese data pointed to expanding
factory activity.and with expectations for an OPEC+ meeting this
Most bank analysts take the view the cartel will hold off from
adjusting production levels for now. Investors had been concerned
the group could cut production to counter a decline in oil
"We don't expect the group to announce production cuts at the 4
June meeting, but bullish rhetoric is likely to continue," ANZ
Base metals edged higher, while gold faltered, as expectations
that strong jobs data will likely cement further Fed rate hikes
this year counterbalanced more positive economic data from
Gold faces increasing risk of bearish reversal, based on charts,
UOB Global Economics & Markets Research said.
Following its recent slide, gold fell further to a low of
$1,932/oz on Tuesday, which seems to have slightly broken the
21-week exponential moving average and the rising trendline
connecting the lows of October 2022 and March 2023, UOB said.
These price actions, together with weekly moving average
convergence divergence indicator turning negative last week suggest
an increasing risk of a bearish reversal, UOB said, pegging support
at bottom of daily Ichimoku cloud, now at $1,920/oz.
Read Gold Prices Likely to Find Support in Recession Risks,
Central Bank Demand
The copper market looks to be closing in on a fundamental
inflection point, UBS said. copper market looks to be closing in on
a fundamental inflection point, UBS said. copper market looks to be
closing in on a fundamental inflection point, UBS said. copper
market looks to be closing in on a fundamental inflection point,
UBS, which said it has done a detailed review of its supply and
demand estimates for the metal, now forecast only a modest surplus
in 2023 and expect a growing deficit from 2025.
"This increases the risk of material price upside over the next
2-3 years [potentially copper's 'lithium moment']," it said.
Prices could dip in the near term if "already weak physical
signals deteriorate further," but UBS said it doesn't expect any
oversupply to push prices down into the cost curve for an extended
TODAY'S TOP HEADLINES
ESG Blowback: Exxon, Chevron Investors Reject Climate
An investor-driven climate change push at some of the world's
largest oil companies has stalled out.
On Wednesday, Exxon Mobil and Chevron's shareholders struck down
a raft of proposals urging the companies to cut greenhouse-gas
emissions derived from fuel consumption, put out new reports on
climate benchmarks and disclose certain oil-spill risks, among
Broadcom Is a Bellwether for Chips. Earnings Will Be Focused on
Chip investors are eagerly awaiting the latest results from
semiconductor bellwether Broadcom after the market close to get an
update on its businesses and progress in the artificial
Some of the company's chips have exposure to generative AI
systems, which has been a popular investment theme this year. The
technology ingests text, images, and videos in a brute-force manner
to create content. Interest in this form of AI was sparked by
OpenAI's release of ChatGPT late last year.
Jamie Dimon Says He Never Discussed Jeffrey Epstein's Accounts
at JPMorgan; Jes Staley Says Dimon Did
A former top JPMorgan Chase executive said in legal documents
that for years he communicated with Chief Executive Jamie Dimon
about the bank's business with convicted sex offender Jeffrey
Epstein-setting the stage for a conflict with his former boss, who
maintains he had no such conversations.
Jes Staley's statements, made in documents viewed by The Wall
Street Journal that haven't been made public, are his first remarks
to emerge about conversations between him and Dimon regarding
Epstein. The bank on Tuesday said Staley's statements are
Purdue Appeals Court Ruling Curbs Lawsuits Against Corporate
An appeals court's ruling this week that corporate bankruptcy
filings can protect insiders from liability cements the chapter 11
system as a powerful tool for resolving misconduct claims.
The Second Circuit Court of Appeals backed a chapter 11 plan for
drugmaker Purdue Pharma that releases its owners, members of the
wealthy Sackler family, from civil lawsuits related to the opioid
crisis. In return, the family members will pay up to $6 billion
over time to Purdue's creditors, believed to be the largest
settlement ever by shareholder parties to a bankruptcy case.
Facebook Parent Threatens to Remove News From Its Platforms in
Facebook parent Meta Platforms is threatening to pull news from
its sites in California if the state passes a law requiring
technology platforms to pay publishers, the latest in a series of
warnings from the company as various governments consider similar
The bill is set to receive a vote on the California assembly
floor Thursday and, if it passes, would move next to the state
Senate. The legislature's final deadline for passing bills this
year is Sept. 14.
New Pfizer RSV Vaccine Rolls Out Into Headwinds of Hesitancy
Vaccine makers are confronting a post-Covid conundrum: New shots
are taming a widening range of diseases, but people are more
skeptical of them than ever.
The newest vaccine, from Pfizer for a deadly respiratory virus
known by the acronym RSV, was approved in the U.S. on Wednesday.
Its green light follows clearance of the first RSV shot from GSK
earlier this month and a pneumonia shot from Merck & Co. last
year. Meantime, new vaccines for HIV, Lyme disease and other
pathogens are in the works.
Eurozone Inflation Fell More than Expected as Core Rate
Eurozone inflation fell more than expected in May on easing food
and declining energy prices, as the core rate also dropped, a
signal that the European Central Bank could be nearing the end of
its tightening cycle.
The consumer price index increased 6.1% in May on year, tumbling
from a 7.0% rise in April, preliminary data from the European
Union's statistics agency Eurostat showed Thursday, the lowest
level since February 2022. It also came in below the 6.4% consensus
forecast from economists in a poll by The Wall Street Journal.
China Caixin Manufacturing PMI Returns to Expansion in May
A private gauge of China's factory activity bounced back to
expansion in May, the first improvement in the manufacturing
sector's health since February.
The China Caixin manufacturing purchasing managers index rose to
50.9 in May from 49.5 in April, according to data released Thursday
by Caixin Media and S&P Global. The 50 mark separates expansion
Oil Traders Are Unfazed by Potential OPEC+ Production Cuts
Oil traders are betting prices will continue to drop despite the
best efforts of producing countries to boost them.
Prices have slid since the Organization of the Petroleum
Exporting Countries and its allies, the coalition known as OPEC+,
jolted markets in October by cutting production by 2 million
barrels a day. A February vow from Moscow to curtail another
half-million barrels and a voluntary April move by eight OPEC+
members to cut 1.2 million barrels more haven't stopped the
Debt Ceiling: House Approves Deal Struck by Biden and
WASHINGTON-The House passed a sweeping bill that suspends the
federal government's $31.4 trillion debt ceiling in exchange for
spending cuts, as Republican Speaker Kevin McCarthy muscled through
a deal struck with President Biden to avert a looming government
The 314-117 vote relied on support from both Republicans and
Democrats. Passage of the deal sends the measure to the Senate,
where leaders have promised quick action, and Biden has said he is
eager to sign the measure into law. Treasury Secretary Janet Yellen
has said the government could run out of the cash it needs on June
5 to pay its bills on time and warned of severe economic damage and
market disruptions unless Congress acts.
Fed Prepares to Skip June Rate Rise but Hike Later
Federal Reserve officials signaled they are increasingly likely
to hold interest rates steady at their June meeting before
preparing to raise them again later this summer.
Investors in recent days had expected the Fed would lift rates
at its meeting June 13-14, prompting two policy makers Wednesday to
publicly underscore their preference to forgo a hike, barring a
sizzling jobs report on Friday.
Profit Numbers Get Spruced Up as Business Slows
Business slowed last year for Google's parent, Alphabet. The
tech giant still beat earnings expectations in this year's first
quarter, in part because it said that its computer servers would
last longer than expected.
The shift reduced its depreciation expense by nearly $1 billion
and helped push per-share earnings ahead of analysts'
A big short in Treasurys? Traders are building up bets around a
debt ceiling resolution
Speculators have been building up a "historically massive" short
position in U.S. Treasury futures ahead of what could be $1
trillion of new debt issuance on the heels of a debt-ceiling
resolution, according to Macquarie's sales and trading global macro
Bond speculators have been taking up a large number of short
positions in 2-year, 5-year and 10-year Treasury futures TY00 (see
chart), according to the Macquarie team, which pinpointed the
combined tally of contracts at nearly 3 million as of late May, or
the most since 2000.
Drones Hit Russian Oil Refineries as Moscow Shores Up Front
KYIV, Ukraine-Drones struck two oil refineries in southern
Russia on Wednesday as Western officials said Moscow was moving to
shore up defenses in border areas and along the 900-mile front with
Ukraine ahead of a planned counteroffensive by Kyiv.
Authorities in Russia's Krasnodar region said the Ilyinsky oil
refinery was largely unaffected by a suspected drone attack, but a
blaze at the Afipsky refinery engulfed over 1,000 square feet of
territory likely as a result of a drone, according to regional
governor Veniamin Kondratyev, who said no one had been injured.
Republicans Probing Bidens Step Up Threats Against FBI Chief
WASHINGTON-Top Republican lawmakers on Wednesday escalated
threats to hold FBI Director Christopher Wray in contempt over what
they view as his stonewalling of a congressional investigation into
the business dealings of President Biden and his family.
Following a phone call with Wray, Rep. James Comer of Kentucky
and Sen. Chuck Grassley of Iowa assailed the Federal Bureau of
Investigation director for not turning over a document that the
House Oversight Committee subpoenaed as part of its investigation
into the Biden family's business dealings. Comer, chairman of the
House Oversight Committee, and other Republicans have said the FBI
record contains allegations that President Biden engaged in a
bribery scheme with a foreign national during his vice
Write to firstname.lastname@example.org TODAY IN CANADA
Laurentian Bank of Canada 2Q
Economic Calendar (ET):
0930 May Canada Manufacturing PMI
Stocks to Watch:
D-Box Technologies 4Q Rev C$34.1M; 4Q Loss C$100,000
Filo Mining: Largest Shareholders Have Indicated Intention to
Participate in Private Placement; Proceeds to Be Used for
Exploration, Development of Filo del Sol Project, Working
Expected Major Events for Thursday
00:30/JPN: May Japan Manufacturing PMI
05:00/JPN: May Auto sales
06:00/RUS: May Russian Manufacturing PMI
06:00/GER: Apr Retail Trade
06:00/UK: May Nationwide House Price Index
07:45/ITA: May Italy Manufacturing PMI
07:50/FRA: May France Manufacturing PMI
07:55/GER: May Germany Manufacturing PMI
08:00/ITA: Apr Unemployment
08:30/UK: Apr Money and Credit - Lending to Individuals, Lending
to Businesses, Broad Money and Credit
08:30/UK: Apr Bank of England effective interest rates
08:30/UK: Apr Monetary & Financial Statistics
08:30/UK: May S&P Global / CIPS UK Manufacturing PMI
11:30/US: May Challenger Job-Cut Report
12:15/US: May ADP National Employment Report
12:30/US: 05/27 Unemployment Insurance Weekly Claims Report -
12:30/US: 1Q Revised Productivity and Costs
13:00/RUS: Weekly International Reserves
13:30/CAN: May Canada Manufacturing PMI
13:45/US: May US Manufacturing PMI
14:00/US: May ISM Report On Business Manufacturing PMI
14:00/US: Apr Construction Spending - Construction Put in
14:30/US: 05/26 EIA Weekly Natural Gas Storage Report
15:00/US: May Global Manufacturing PMI
15:00/US: 05/26 EIA Weekly Petroleum Status Report
16:00/US: May Monthly U.S. Retail Chain Store Sales Index
20:00/US: May Domestic Auto Industry Sales
20:30/US: Foreign Central Bank Holdings
20:30/US: Federal Discount Window Borrowings
23:01/UK: May POSTPONED: BRC-Sensormatic IQ Footfall Monitor
23:50/JPN: May Monetary Base
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Expected Earnings for Thursday
ACELYRIN Inc (SLRN) is expected to report for 1Q.
ASA Gold & Precious Metals Ltd (ASA) is expected to report
Asana Inc (ASAN) is expected to report for 1Q.
Aurora Cannabis Inc (ACB,ACB.T) is expected to report for
BARK Inc (BARK) is expected to report for 4Q.
BRP Inc (DOO.T,DOOO) is expected to report $2.38 for 1Q.
Broadcom Inc (AVGO) is expected to report $7.85 for 2Q.
Buckle Inc (BKE) is expected to report.
Caleres Inc (CAL) is expected to report $0.94 for 1Q.
Canaccord Genuity Group (CF.T) is expected to report $0.15 for
ChargePoint Holdings Inc (CHPT) is expected to report for
Conn's (CONN) is expected to report $-1.28 for 1Q.
Cooper Companies Inc (COO) is expected to report $2.23 for
Costco Wholesale Corp (COST) is expected to report.
DATATRAK International Inc (DTRK) is expected to report for
Dell Technologies Inc - Class C (DELL) is expected to report
$0.42 for 1Q.
Dollar General (DG) is expected to report $2.42 for 1Q.
Duluth Holdings Inc (DLTH) is expected to report $-0.03 for
Five Below (FIVE) is expected to report $0.63 for 1Q.
Guidewire Software Inc (GWRE) is expected to report $-0.60 for
Hormel Foods Corp (HRL) is expected to report $0.40 for 2Q.
IMPAC Mortgage Holdings Inc (IMPM) is expected to report for
Iteris Inc (ITI) is expected to report $0.04 for 4Q.
Lands' End Inc (LE) is expected to report for 1Q.
Laurentian Bank of Canada (LB.T,LRCDF) is expected to report
$1.07 for 2Q.
Lululemon Athletica Inc (LULU) is expected to report $1.98 for
Macy's Inc (M) is expected to report $0.45 for 1Q.
MongoDB Inc (MDB) is expected to report $-1.16 for 1Q.
PagerDuty Inc (PD) is expected to report for 1Q.
Quanex Building Products Corp (NX) is expected to report $0.41
Reeds (REED) is expected to report for 1Q.
Samsara Inc (IOT) is expected to report for 1Q.
SentinelOne Inc (S) is expected to report for 1Q.
SpartanNash Co (SPTN) is expected to report $0.50 for 1Q.
Statera Biopharma Inc (STAB) is expected to report for 4Q.
System1 Inc (SST) is expected to report for 1Q.
Tilly's (TLYS) is expected to report $-0.36 for 1Q.
VMware (VMW) is expected to report $0.70 for 1Q.
Zscaler Inc (ZS) is expected to report $-0.34 for 3Q.
Zumiez (ZUMZ) is expected to report $-0.85 for 1Q.
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ANALYST RATINGS ACTIONS
Akebia Therapeutics Raised to Overweight From Neutral by Piper
Ambarella Cut to Sector Weight From Overweight by Keybanc
Avis Budget Group Raised to Buy From Hold by Deutsche Bank
Chevron Raised to Neutral From Underweight by JP Morgan
GreenLight Biosciences Cut to Hold From Buy by Canaccord
Q2 Holdings Raised to Buy From Neutral by BTIG
Xylem Raised to Outperform From Neutral by Baird
This article is a text version of a Wall Street Journal
newsletter published earlier today.
(END) Dow Jones Newswires
June 01, 2023 06:11 ET (10:11 GMT)
Copyright (c) 2023 Dow Jones & Company, Inc.