OPENING CALL
Index futures rose, with Meta leading premarket gainers.
And it's Jobs Day, with January's readout, due at 8:30 a.m. ET, expected to show signs of modest labor-market cooling. In turn, that would suggest less spending power for consumers, which could keep inflation in check and make a case for lower interest rates.
"Beyond any particularly shocking collapse in payrolls or a spike in unemployment, it looks unlikely that we will see anything that could force the Fed's hand," Scope Markets said.
"Instead, the risk remains tilted towards the downside for risk assets, with any stronger than expected wage or payrolls figure providing the basis for a more hawkish Fed in the face of sticky inflation pressures."
Regional bank stocks looked to stabilize following a two-day selloff after New York Community Bancorp's surprise loss and drastic reserve increase.
Overseas Markets
Major international benchmarks were mixed. Indexes fell in China, but rose in Europe and Japan
Premarket Movers
Atlassian reported second-quarter adjusted earnings of 73 cents a share, topping Wall Street estimates. The company's guidance also was above expectations but the stock was down 7.8%.
Amazon.com rose 6.6% after the e-commerce and cloud computing company posted better-than-expected fourth-quarter profit and sales, driven by strength in its core e-commerce business and continued growth in ad revenue.
Apple declined 2.4% after it reported lower-than-expected growth in services and a decline in its China business, where it is seeing new competition in the smartphone market from Samsung and others.
Fiscal second-quarter revenue at Clorox topped forecasts and it raised its fiscal 2024 adjusted earnings outlook. The stock jumped 7.2%.
Deckers Outdoor posted fiscal third-quarter earnings of $15.11 a share, beating estimates of $11.48. Shares rose 7.4%.
Intel is delaying the construction timetable for its $20 billion chip-manufacturing project in Ohio, The Wall Street Journal reported. The stock fell 1.1%.
Shares of Meta Platforms rose 16% after the parent company of Facebook and Instagram issued a better-than-expected revenue forecast for the first quarter and declared its first-ever dividend.
Microchip Technology was down 2.5% after fiscal third-quarter sales declined to $1.77 billion from $2.17 billion a year earlier.
Skechers was down 12% after it reported weaker-than-expected fourth-quarter sales and issued a forecast for first-quarter earnings that was below analysts' estimates.
Post-Close Movers
Columbia Sportswear warned of falling sales and cautious retailers in 2024. Its shares dropped 8.9%.
Gen Digital cut its outlook for the fiscal year after reporting a drop in profit in the latest quarter. Its shares fell 4.7%.
Watch For:
Employment Report for January; University of Michigan Final Consumer Survey for January; earnings from AbbVie, Bristol Myers Squibb, Chevron, Exxon Mobil, Regeneron Pharmaceuticals
Today's Headlines/Must Reads
- Amazon and Meta-Nothing Artificial About These Results
- What's Next for Elon Musk and Tesla After CEO's Pay Package Was Struck Down
- The 'Last Mile' of the Inflation Fight Doesn't Seem So Bad
MARKET WRAPS
Forex:
EUR/USD is likely to keep within a relatively small range of 1.05-1.11 this year, Societe Generale Research said.
The euro has kept within this range against the dollar recently even in a market discounting slightly more European Central Bank than Fed easing, and much weaker growth in the eurozone growth than in the U.S., SocGen said.
"It will take a significant shift in expectations to really shake up the FX market."
SocGen also said the dollar should weaken moderately as investors anticipate interest-rate cuts by the Fed, though any falls will be limited because there isn't sufficient reason to buy alternative currencies, Societe Generale Research said.
"The dollar fell too fast in 4Q and has bounced in January but as Fed easing comes closer, we expect modest weakness ahead."
The dollar remains highly valued in real terms, though few currencies look attractive to buy against it, SocGen said.
Morgan Stanley Research said European currencies are most vulnerable to a faster-and-deeper easing cycle.
Markets are currently pricing in a pace of cuts for Europe roughly similar to that of the U.S. along with terminal rates above neutral, but this trend could change.
According to Oanda, GBP/USD is poised for a potential bullish breakout, based on technical charts.
The pair has traded above its upward-sloping 50-day moving average since Nov. 14, and its movements have formed a bullish candlestick that has managed to engulf previous small candlesticks in place since Jan. 18,
Energy:
Oil prices edged up in Europe after an OPEC+ monitoring committee made no changes to the group's output cut plans.
The committee reviewed production data for November and December and noted high levels of conformity by members that adhered to production adjustments.
"We expect those countries that joined in on the cuts to decide on whether to continue in early March," UBS said.
"What has been already made clear last year is that the reversal of those cuts will be gradual."
Metals:
Gold nudged higher on a weaker dollar and lower Treasury yields, while base metals remained broadly mixed.
"Gold seems too jittery in our view," RBC said.
Buffeted by macroeconomic pressures both positive and negative, it is unsurprising that gold can't quite pull consistent investor flows in, given its expectations-based pricing, RBC said.
TODAY'S TOP HEADLINES
Barbie Owner Mattel Draws Activist Seeking Changes at Toy Maker
An activist investor has set its sights on Mattel and is seeking changes to boost the toymaker's lackluster stock.
Barington Capital has built an undisclosed stake in Mattel, according to a letter sent to Chief Executive Officer Ynon Kreiz that was seen by The Wall Street Journal.
Chinese EV Makers' Shares Rise After Better-Than-Expected January Sales
Shares of a host of Chinese electric-vehicle makers rose in Hong Kong, helped by better-than-expected sales in a typically slow month.
Geely Automobile led gains among Hang Seng Index constituents, advancing 6.1% by the midday break on Friday. Li Auto rose 5.3%, while NIO, Great Wall Motor and XPeng added 1.2%, 1.5% and 0.15%, respectively, against the benchmark index's 0.3% gain.
Stocks for the Looong Run: Could Japan's Lost Decades Happen in America?
America's stocks are making new highs and the U.S. economy looks poised to stick a rarely seen soft landing. What could go wrong?
A lot, actually.
Senate Moves Ahead With Vote on Border-Ukraine Package
WASHINGTON-Senate Majority Leader Chuck Schumer (D., N.Y.) said that legislative text for a revised package containing aid for war-torn Ukraine as well as border-security measures would be released publicly as soon as Friday, with an initial vote set up for next week as he aims to press through growing Republican opposition.
"These challenges at the border and in Ukraine and the Middle East are just too great," Schumer said Thursday on the Senate floor. "We will need to be here working." He said that discussions are going well on revisions to a $110.5 billion package for Ukraine, Israel, Taiwan and the border, and that "we plan to post the full text" as soon as Friday and no later than Sunday. He said an initial vote would occur by Wednesday.
U.S. Imposes Sanctions on Israeli Settlers Involved in West Bank Attacks
The Biden administration has announced a new set of sanctions against Israeli settlers and others it deems responsible for attacks on Palestinians in the West Bank, as concerns grow in Washington that the Israeli government hasn't done enough to curb the violence.
Since the Oct. 7 Hamas attacks in Israel and the outbreak of the war in Gaza, attacks by Israeli settlers on Palestinians in the West Bank have doubled, according to the United Nations. Armed settlers in uniforms have shown up in Palestinian villages threatening to kill those who don't leave, say residents, Israeli peace activists and the U.N.
Shadow War With Iran Risks Turning Into a Direct Conflict
WASHINGTON-For decades, the U.S. and Iran have waged a shadow war across the Middle East following a rule understood by both sides: If you hit us, we will hit back, at least as hard.
But as the Biden administration prepares to retaliate for a drone strike by Iranian-backed militias that killed three American soldiers last weekend, the calculations of the two longstanding adversaries has changed. Neither Washington nor Tehran appears eager for a direct military confrontation.
Write to paul.larkins@dowjones.com TODAY IN CANADA
Earnings:
Brookfield Renewable 4Q
Imperial Oil 4Q
Economic Calendar:
Nothing scheduled
Expected Major Events for Friday
00:01/UK: Jan BRC-Sensormatic IQ Footfall Monitor
07:45/FRA: Dec Industrial production index
13:30/US: Jan U.S. Employment Report
15:00/US: Jan University of Michigan Survey of Consumers - final
15:00/US: Dec Manufacturers' Shipments, Inventories & Orders (M3)
All times in GMT. Powered by Kantar Media and Dow Jones.
Expected Earnings for Friday
ASA Gold & Precious Metals Ltd (ASA) is expected to report for 4Q.
AbbVie Inc (ABBV) is expected to report $1.60 for 4Q.
Bogota Financial Corp (BSBK) is expected to report for 4Q.
Bristol Myers Squibb Co (BMY) is expected to report $0.59 for 4Q.
Brookfield Business Corp (BBUC) is expected to report for 4Q.
Brookfield Renewable Corp (BEPC,BEPC.T) is expected to report for 4Q.
Brookfield Renewable Partners LP (BEP,BEP.UN.T) is expected to report $-0.21 for 4Q.
Burke Herbert Financial Services Corp (BHRB) is expected to report for 4Q.
Cboe Global Markets Inc (CBOE) is expected to report $1.91 for 4Q.
Charter Communications Inc (CHTR) is expected to report $9.16 for 4Q.
(MORE TO FOLLOW) Dow Jones Newswires
02-02-24 0611ET
