OPENING CALL
Stock futures mostly struggled on Friday with investors continuing to keep a close eye on inflation data as they try to predict when the Federal Reserve will begin cutting interest rates.
Options tied to more than $5 trillion in stocks, exchange-traded funds and equity indexes are set to expire on Friday during the quarterly triple witching - when a welter of monthly contracts are set to expire alongside index futures.
Post-Close Movers
American Vanguard guided for a return to growth in 2024. Shares rose 16%.
Cardlytics issued a better-than-expected outlook for the first quarter and inked a deal to give its platform to an American Express-linked company. Shares rose 39%.
Smartsheet forecast a slowdown in revenue growth in the next fiscal year. Shares declined 11%.
Ulta Beauty guided for lower-than-expected full-year earnings and said it expected to see a slowdown in growth in the beauty industry. Shares dropped 6.1%.
Watch For:
Import Prices for February; Industrial Production & Capacity Utilization for February; University of Michigan Preliminary Consumer Survey for March; Canada Housing Starts for February; Canada Wholesale Trade for January
Today's Headlines/Must Reads:
- China Signals Opposition to Forced Sale of TikTok in the U.S.
- Sorry Stock Bulls, the 'Wall of Cash' Isn't All Headed Your Way
- China's Real-Estate Market Just Set a Record-but Not a Good One
MARKET WRAPS
Forex:
SEB Research has lowered its medium-term EUR/USD forecast due to a more optimistic view on the U.S. growth outlook and fewer positive drivers for the euro.
It now forecasts EUR/USD at 1.08 in the second quarter, 1.08 in the third, and 1.10 in the fourth-revised down from previous forecasts of 1.11, 1.13 and 1.14 respectively and compared with a current EUR/USD rate of 1.0882.
Fewer Fed rate cuts and an upgrade to U.S. growth expectations should mean the dollar strengthens, SEB said.
Sterling is expected to receive support if the Bank of England continues not to open the door to interest-rate cuts, BNP Paribas Markets 360 said.
"For now we think the BOE continuing to not open the door to rate cuts is a source of support for the pound when other G10 central banks have already done so."
BNP Paribas remains positive on sterling as a result of this, as well as low uncertainty going into the general election and our reduced concerns around the current account deficit.
Bonds:
Societe Generale said that despite a resilient economy and sticky inflation in the U.S., the bar remains high for a meaningful rise in Treasury yields at a time when the Fed is biased to ease. It expects "dip buyers" to cap the selloff.
"We continue to believe that the 2-year Treasury yield at 4.75% and the 10-year at 4.30% are opportunities to buy the dip."
SEB Research said the 10-year Treasury yield is expected to drift lower to around 4% in the coming months as markets embrace the prospect of Fed rate cuts.
"We think that Fed expectations will remain the key driver of the 10-year Treasury in the coming months."
SEB Research expects the federal-funds rate to bottom out at 3.25%-3.50%, two percentage points below the current 5.25%-5.50% level.
SEB also said German 10-year Bund yields are expected to trade mostly in the 2.20%-2.50% range until the European Central Bank's April 11 meeting.
When the ECB gives the green light for a first rate cut, the yield is likely to tilt towards the lower end of the range, but a sustainable fall below 2% is unlikely, it added.
"We think a sustainable break below 2% in the Bund yield is unlikely unless there is a significant softening in ECB policy rate expectations for the coming two years."
Energy:
Oil prices edged lower but remained on track for strong weekly gains on signs of a tightening market balance.
"Trend and momentum indicators support a further rise in oil prices," Swissquote Bank said.
Yet, "oil bulls could hit a wall if we see a hawkish shift from the Fed at next week's meeting."
Metals:
Gold has stabilized just below its record high set at the end of last week, which likely reflects pricing in the Fed's cautious stance for now, with no expectations of interest rate cuts until the middle of the year, Commerzbank said.
TODAY'S TOP HEADLINES
Nissan Motor, Honda Motor to Consider EV Partnership
Nissan Motor and Honda Motor will consider an electric-vehicle partnership as part of efforts to cut carbon emissions and reduce fatal accidents.
The two Japanese carmakers said Friday that they signed a memorandum of understanding to begin a feasibility study into a strategic partnership. The scope of the feasibility study includes software and core EV parts, they said.
European Commission Opens Probe Into Alibaba's AliExpress
The European Commission has launched an investigation into e-commerce platform AliExpress, owned by Chinese technology giant Alibaba, on concerns the company isn't taking adequate measures to prevent the distribution of illegal goods and content online.
The commission, the European Union's executive arm, said Thursday that it will probe AliExpress for possible violations of the Digital Services Act in areas such as risk management, content moderation and complaint handling, transparency of advertising and recommender systems, trader traceability and researcher data access.
WuXi AppTec Says It Left Washington Lobbying Group Voluntarily
WuXi AppTec says it voluntarily left a high-profile biotechnology lobbying group as U.S. legislative efforts were "maligning" its membership in the Washington-based association.
A letter sent by the company to the Biotechnology Innovation Organization's president and CEO, John Crowley, dated March 12, said that "effective immediately, WuXi AppTec, along with our subsidiary WuXi Clinical, will end our associate membership in BIO." The letter was seen Friday by The Wall Street Journal.
China's Central Bank Keeps Key Policy Rates Steady
China's central bank kept its key policy rates unchanged on Friday while reporting a net withdrawal of liquidity from the financial market.
The People's Bank of China held its one-year medium-term lending facility steady at 2.5% while injecting 387 billion yuan ($53.80 billion) worth of liquidity through the monetary tool, according to a statement on its website. There was a total of CNY481 billion of MLF loans due Friday, indicating a net withdrawal of liquidity.
Japan's Rebounding Economy Is Finally Lifting Pay-but Resentment Runs Deep
MEIWA, Japan-After three decades dominated by stagnation, Japan's stock market has hit a record, and the final piece of its economic recovery is falling into place with the biggest pay increases since 1991.
The Japanese public, unimpressed, wants to know why it has taken so long.
Top uranium producer expects 'modest' production growth this year
Kazatomprom, the world's largest producer of uranium, said Friday there will be modest production growth this year as it reported swelling profits.
Kazatomprom KZ:KZAP NATKY said its annual profit rose 23% to 570 billion Kazakhstani tenge ($1.27 billion), on a 43% jump in revenue to 1.44 trillion tenge.
Write to paul.larkins@dowjones.com TODAY IN CANADA
Earnings [4Q unless stated otherwise]:
Neo Performnce Materials
Premium Brands
Economic Calendar (ET):
0815 Feb Housing Starts
0830 Jan Wholesale Inventories, Trade
0830 Jan International Transactions in Securities
Stocks to Watch:
Almaden Minerals To Voluntarily Delist From the NYSE Amer Exchange; Intend to Seek a Listing on the OTCQB Marketplace; Requested Consultations With Mexico Under the CPTPP, to Date Mexico Has Not Proposed a Date for These Consultations; Delivered to Mexico Written Notice of Intention to Submit a Claim to Arbitration Against Mexico
Chesswood Group 4Q Loss/Shr C$1.80; 4Q Rev C$74.8M
GreenFirst Forest Prods 4Q Loss/Shr C$0.12; 4Q Sales C$103M
Imperial Metals 2023 Rev C$344.4M Vs. C$172.8M; 2023 Loss/Shr C$0.23 Vs. Loss C$0.51; Net Loss Narrowed on Reduced Mine Losses, Mine Rstart Costs, Disposal Gains
Maxim Power 4Q EPS C$0.32; 4Q Rev C$39M
NorthWest Healthcare REIT 4Q Revenue From Investment Properties C$124 Million
Rubellite Energy 4Q EPS C$0.15; 4Q Rev C$27.2M
SIR Royalty Income Fund 4Q EPS C$1.21
Tree Island Steel 4Q Rev C$50.6M; 4Q Loss/Shr C$0.07
Expected Major Events for Friday
04:30/JPN: Jan Tertiary Industry Index
07:45/FRA: Feb CPI
09:00/ITA: Feb CPI
09:30/UK: Feb Bank of England/Ipsos Inflation Attitudes Survey
09:30/UK: 4Q Bank of England statistics on UK banks' external claims
10:00/ITA: Jan Retail Sales
11:00/ITA: Jan Foreign Trade EU
12:15/CAN: Feb Housing Starts
12:30/US: Mar Empire State Manufacturing Survey
12:30/CAN: Jan Wholesale trade
12:30/US: Feb Import & Export Price Indexes
12:30/CAN: Jan International transactions in securities
13:15/US: Feb Industrial Production & Capacity Utilization
14:00/US: Mar University of Michigan Survey of Consumers - preliminary
All times in GMT. Powered by Kantar Media and Dow Jones.
Expected Earnings for Friday
374Water Inc (SCWO) is expected to report for 4Q.
Aegis Brands is expected to report for 4Q.
Allakos Inc (ALLK) is expected to report $-0.48 for 4Q.
Amrep Corp (AXR) is expected to report for 3Q.
Annexon Inc (ANNX) is expected to report $-0.47 for 4Q.
Avid Bioservices Inc (CDMO) is expected to report $-0.05 for 3Q.
Bird Global Inc (BRDSQ) is expected to report for 4Q.
Bridgford Foods Corp (BRID) is expected to report for 1Q.
Buckle Inc (BKE) is expected to report $1.44 for 4Q.
BuzzFeed Inc (BZFD) is expected to report for 4Q.
Crimson Wine Group Ltd (CWGL) is expected to report for 4Q.
Dawson Geophysical Co (DWSN) is expected to report for 4Q.
Desktop Metal Inc (DM) is expected to report $-0.10 for 4Q.
Enterprise Group is expected to report for 4Q.
Enzo Biochem (ENZ) is expected to report for 2Q.
(MORE TO FOLLOW) Dow Jones Newswires
03-15-24 0626ET
