MARKET WRAPS
Watch For:
Pending Home Sales for November; Weekly Jobless Claims; EIA Weekly Natural Gas Storage Report; EIA Weekly Petroleum Status Report
Today's Top Headlines/Must Reads:
- The Dominant Dollar Faces a Backlash in the Oil Market
- Santa Might Have One Last Gift for Investors
- Soft Landing Talk Prompts 1990s Flashbacks
Opening Call:
Stock index futures were mixed early on Thursday, but indicating the S&P 500 will open only a fraction short of a fresh record close.
Hopes for a raft of interest rate cuts by the Federal Reserve next year continued to underpin stock markets as Wall Street prepared for the penultimate trading session of 2023.
"Investors are still in good spirits, toasting hopes of interest rate cuts in the U.S. coming sooner rather than later next year," Hargreaves Lansdown said. "Indices have been powered higher, partly by optimism about a soft landing for the U.S."
And sentiment also has been lifted this week by strong auctions of government 2-year and 5-year bonds on Tuesday and Wednesday respectively, evidence that the market is relaxed with Treasury yields at the lower levels.
Traders doubtless will be keen to see if the good run continues later when the Treasury looks to sell $40 billion of 7-year notes.
However, some analysts were wary that investors may be a bit optimistic about the speed of Fed easing.
"If global equity markets have one Achilles Heel going into January 2024, it is the expectation that the Fed will be methodically and consistently cutting interest rates throughout the year," DataTrek Research said.
But that is not necessarily a bearish argument for stocks, it added, especially if economic growth remains strong enough that corporate earnings grow by seven to 10% in 2024.
"Against that backdrop, the Fed will be able go slow on rate cuts. While that might leave rates higher than they would otherwise have been, earnings growth should buoy investor confidence and allow valuations to expand modestly next year," DataTrek said.
Premarket Movers
Apple closed with a slight gain on Wednesday, putting an end to a four-session losing streak. Apple was up 0.3% premarket.
Marathon Digital Holdings rose 1.7% in premarket trading after jumping 15% Wednesday and extending its winning streak to 11 sessions. Marathon Digital, like other stocks related to cryptocurrencies, have received a boost from Bitcoin's sharp gains of 162% this year.
Microsoft rose 0.2%. Analysts at Wedbush raised their price target on the stock to $450 from $425 and maintained an Outperform on the shares.
Chile's SQM and the National Copper Corporation of Chile, or Codelco, have formed a public-private partnership to develop lithium in the Salar de Atacama , a huge lithium resource, from 2025 to 2060. SQM shares rose 5.4%.
Energy:
Oil prices inched higher as a weaker dollar provided support for commodities backed by the greenback.
Trading remained thin during the holiday period, with worries around the situation in the Middle East adding further support to prices.
Metals:
Metal prices traded at multimonth highs, fuelled by a weaker dollar, though prices in thin festive trading on Thursday morning were slightly lower.
Despite the slight move lower, copper prices were still trading at their highest level since July 31, while the continuous gold contract hit an all-time high of $2,093.10 an ounce on Wednesday. Gold prices in London also hit a record level on Wednesday at $2069.40 an ounce, according to the London Bullion Market Association.
"Gold continues to be the safe-haven of choice in periods of uncertainty and high volatility," LBMA said.
TODAY'S TOP HEADLINES
Apple Keeps Chasing the Ultimate Health-Tracking Watch-but It Could Take Years
Apple's widening effort to turn its nine-year-old watch from a luxury timepiece into the ultimate all-in-one medical device is taking it into territory that is legally treacherous as well as potentially profitable.
This month's suspension of Apple Watch sales was the starkest sign yet that the world's most valuable tech company is treading new ground as it adds health features to the device. While Apple on Wednesday won a temporary reprieve to resume sales, specialists in medical devices say the technical and legal challenges are likely to continue.
2024 Could Be a Winner for Oil, Gas, and Gold
Natasha Kaneva, the head of global commodities strategy at J.P. Morgan, correctly predicted the decline in oil demand growth this winter that caused the commodity price to drop sharply. Prices could rebound in 2024 as demand rises again and the Organization of the Petroleum Exporting Countries holds back supply. But Kaneva thinks it is worth peering a little deeper into the well.
The energy market's biggest players are at a crossroads. After posting record earnings in 2022 and seeing their stocks soar, most oil companies trailed the market by double digits in 2023.
China Wants to Move Ahead, but Xi Jinping Is Looking to the Past
A song called "Tomorrow Will Be Better" became a sensation in mainland China in the 1980s, when the nation was emerging from the poverty and turmoil of Mao Zedong's rule.
Its inspirational lyrics, which exhorted listeners to "look upward for the wings in the sky," came to represent a generation that was starting to believe in a brighter future.
GOP Rep. Lauren Boebert to Seek Different Colorado Seat to Boost 2024 Chances
Republican Rep. Lauren Boebert said Wednesday she plans to give up her current seat to run in a different part of Colorado in 2024 to improve her chances of staying in Congress after a series of setbacks.
Boebert, a gun-rights activist who formerly ran a firearms-themed restaurant in Rifle, Colo., was elected to represent her current district in 2020 and quickly became a star of the pro-Donald Trump wing of the GOP. But Boebert soon stumbled, with some voters tiring of her provocateur persona. An embarrassing incident this year at the musical "Beetlejuice"-in which she and her date were ejected for talking and vaping-further dented her image.
Write to ina.kreutz@wsj.com
TODAY IN CANADA
Earnings:
Nothing scheduled
Economic Calendar (ET):
Nothing scheduled
Stocks to Watch:
Allkem: COMEX approval granted for development of James Bay Lithium Project in Quebec; Detailed Engineering, Procurement Reached 84% and 90% Completion Respectively; Expects Detailed Engineering, Procurement to Be Fully Complete by Construction Commencement; Preparation of Key Construction Permits Is Complete; Targeted Production Capacity Is 311ktpa of Spodumene Concentrate With an Around 19 Year Mine Life
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Profound Medical Prices $20M Public Offering of Common Shares at $7.50 Each; Offering Is Expected to Close Around Jan. 2
Other News:
Energy Fuels named Nathan Bennett as chief accounting officer and interim chief financial officer , effective Jan. 1.
Expected Major Events for Thursday
01:00/JPN: Nov Steel Imports & Exports Statistics
04:30/JPN: Nov Preliminary Report on Petroleum Statistics
13:00/RUS: Weekly International Reserves
13:30/US: Nov Advance Economic Indicators Report
13:30/US: 3Q U.S. International Investment Position
13:30/US: 12/23 Unemployment Insurance Weekly Claims Report - Initial Claims
15:00/US: Nov Pending Home Sales Index
15:30/US: 12/22 EIA Weekly Natural Gas Storage Report
16:00/US: 12/22 EIA Weekly Petroleum Status Report
21:30/US: Federal Discount Window Borrowings
21:30/US: Foreign Central Bank Holdings
All times in GMT. Powered by Kantar Media and Dow Jones.
Expected Earnings for Thursday
Arcimoto Inc (FUV) is expected to report for 3Q.
CEL-SCI Corp (CVM) is expected to report for 4Q.
California First Leasing Corp (CFNB) is expected to report for 1Q.
Daily Journal (DJCO) is expected to report for 4Q.
Gelesis Holdings Inc (GLSHQ) is expected to report for 3Q.
PhenixFIN Corp (PFX) is expected to report for 4Q.
RVL Pharmaceuticals PLC (RVLPQ) is expected to report for 3Q.
Starcore International Mines Ltd (SAM.T) is expected to report for 2Q.
Williams Industrial Services Group Inc (WLMSQ) is expected to report $-0.03 for 3Q.
Powered by Kantar Media and Dow Jones.
ANALYST RATINGS ACTIONS
Outlook Therapeutics Raised to Overweight From Equal-Weight by Capital One
This article is a text version of a Wall Street Journal newsletter published earlier today.
(END) Dow Jones Newswires
12-28-23 0610ET
