MARKET WRAPS
Watch For:
Third Quarter GDP Estimate, Weekly Jobless Claims, EIA Weekly Natural Gas Storage Report; Earnings from Nike
Today's Top Headlines/Must Reads:
- Americans Spending Less on Gifts, More on Everything Else
- Biden Administration Explores Raising Tariffs on Chinese EVs
- Small-Cap Stocks Are Taking Off. Forget Big Tech.
Opening Call:
Stock futures pointed to opening gains on Thursday, following the worst one-day decline in three months.
There wasn't any clear fundamental trigger for Wednesday's sell-off, setting the stage for a better day on Thursday. But the market has been rallying hard and fast, with the S&P 500 up 22% this year.
"The turnaround happened around 90 minutes before the close, and although there wasn't an obvious catalyst that was responsible, we had just seen the fastest advance for the S&P 500 in over 3 years, so maintaining that momentum was always likely to prove difficult," Deutsche Bank said.
Overseas
Overseas stocks were mixed, as Europe's Stoxx 600 slipped while China's Shanghai Composite Index edged up, after hitting a year-plus low in the previous session. A big U.S. recall by Toyota helped push Japan's Nikkei 225 down 1.6%.
Premarket Movers
Canada's BlackBerry forecast fourth-quarter revenue of $150 million to $159 million, below analysts' estimates for $185.6 million. The stock was down 7.1%.
Boeing moved closer to resuming 737 MAX deliveries to China as it appeared Chinese airlines were getting ready to take delivery of the jets again. Trade publication The Air Current reported Boeing has won a key clearance from China's aviation regulator. Boeing stock was up 2.1%.
Calliditas Therapeutics received full approval from the FDA for Tarpeyo as a treatment for patients with primary immunoglobulin A nephropathy. The stock was up 13%.
Micron Technology issued a better-than-expected outlook for the current quarter, forecasting a sharp rise in revenue. Shares rose 6%.
Toyota fell 4% in Tokyo after it said it was recalling around 1 million Toyota and Lexus vehicles in the U.S. , citing issues over potential airbag malfunctions. The recall affects certain 2020-2022 Toyota and Lexus models. U.S.-listed shares fell 0.4%.
Warner Bros. Discovery CEO David Zaslav met with Paramount CEO Bob Bakish this week and discussed a possible merger , though no formal talks between the companies are under way. Warner Bros. shares rose 2.1%, while Paramount gained 0.1%.
Forex:
The euro could extend its gains against the dollar toward $1.10 if PCE price data on Friday come in on the weak side and keep the bond rally intact, Swissquote said.
"The current cup and handle formation in the EUR/USD is a bullish technical formation and could be interesting for entering fresh long positions."
Traders should be wary, however, that euro strength against the dollar isn't fundamentally deserved, with a strong U.S. economy contrasting with weak eurozone growth and falling inflation, it said.
Bonds:
The inverted yield curve should normalize again next year, J.P. Morgan Asset Management said.
Central banks will respond to the expected slowdown in economic demand and in inflation with sharp interest rate cuts, it added.
"Yields at the short end of the curve are therefore likely to fall below yields at the long end over the course of the [next] year."
J.P. Morgan Asset Management also said investors aiming to protect their investments against weak economic growth or even a recession next year should consider relying on the safety of long-term bonds with a high credit rating.
"Investors who have secured the currently attractive interest rates for their portfolio, benefit from bond yields falling in a disinflationary recession scenario."
Energy:
Oil prices were higher after falling earlier in the trading session on concerns over weak demand after the U.S. reported an unexpected increase in crude inventories.
Prices were higher for three consecutive sessions this week, boosted by fears of global trade disruptions as more companies paused shipments through the Red Sea due to escalating attacks from Yemen's Houthi forces.
Metals:
Copper prices fell on signs of weakening consumption in China this month, while aluminum was down and gold broadly flat as the market continued to price in interest-rate cuts and geopolitical risks.
The lithium market is likely to remain oversupplied for several years, before falling back into deficit from 2027 as demand growth again outpaces production, Macquarie said.
"This translates to lower near-term prices offset by improve price outlook over the longer term."
Macquarie cut its spodumene price forecasts by 61%-74% in 2024-2026 and by 2%-37% in 2027-2028, but raised them by 9%-19% for 2029-2030.
The bank is now projecting a spodumene price of $1,416/metric ton in 2024, down from roughly $3,744/ton in 2023. By 2028, the price should return to around $3,469/ton.
TODAY'S TOP HEADLINES
Wells Fargo Workers in Albuquerque Vote to Form Union, a First for a Megabank
Wells Fargo employees are forming the first union inside a major U.S. lender since the dawn of the modern megabank.
Eight employees at a branch in Albuquerque, N.M., voted Wednesday on whether to organize. Five voted in favor and three voted against, according to a tally by the National Labor Relations Board. The NLRB will finalize the results if no one objects to the election within five days.
Nike Earnings Likely Won't Be Stellar. Wall Street Is Excited About the Stock Anyway.
Wall Street is feeling more upbeat about Nike's 2024 outlook - but analysts are a lot more tepid about the retailer's earnings report coming Thursday afternoon.
Over the past few months, Street sentiment on Nike stock has been improving. Investors have rallied behind the prospect of bigger margins now that the company is seeing better freight costs and less discounting.
FTC Proposes Curbing Targeted Advertising to Children Online
WASHINGTON-The Federal Trade Commission on Wednesday proposed new limits to protect children from what it says are tech companies' increasingly invasive surveillance tactics.
The move is the latest effort by FTC Chair Lina Khan to use the breadth of her legal authorities to rein in often lightly regulated tech companies, including YouTube owner Google and Meta Platforms, owner of Instagram.
What Is Insurrection? Trump Puts Once Obscure Questions Before Courts
Donald Trump's efforts to stay in power after losing the White House are forcing judges all the way up to the Supreme Court to confront obscure legal questions that long seemed largely academic but now carry big consequences.
For one, what counts as insurrection against the U.S.?
Nikki Haley Walks Fine Line on Gender in 2024 GOP Primary
DAVENPORT, Iowa-In a party that often rejects identity politics, Nikki Haley is trying to walk a fine line as the only woman in the Republican presidential field.
The former South Carolina governor, like other high-profile female politicians, has long had to weigh how much to talk about being a woman. It is an especially challenging task in the GOP, where voters are sometimes less interested in hearing about topics related to race and gender.
Write to ina.kreutz@wsj.com
TODAY IN CANADA
Earnings:
Nothing major scheduled
Economic Calendar (ET):
0830 Oct Payroll employment, earnings and hours, and job vacancies
0830 Oct Retail trade
Stocks to Watch:
Agnico Eagle Mines: Acquired 19,010,000 Units of FireFox Gold Corp
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Buhler Industries: Asko Holding to Acquire 97% of the Common Shares of Buhler Industries; Aggregate Cash Purchase Price to Be Paid by ASKO Is C$60.5M; Asko Subsidiary to Purchase All of Common Shrs of the Co Owned by Combine Factory Rostselmash; Asko Subsidiary Will Acquire All Outstanding Debt of Buhler Industries Owed to Rostselmash
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Farmers Edge and Leaf Agriculture Partner to Expand Data Access to Farmers Through Unified API
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GR Silver: Issued 1,343,891 Shares to Settle C$100,792 Debt
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Hammerhead Energy: Hldrs, Court Approve Plan of Arrangement; Crescent Point Energy Will Acquire All Issued and Outstanding Common Shrs and the Co. Will Become a Direct Wholly Owned Subsidiary of Crescent Point
Expected Major Events for Thursday
05:00/JPN: Nov Steel Production
07:00/UK: Nov Public sector finances
07:45/FRA: Dec Monthly business survey (goods-producing industries)
09:00/ITA: Nov PPI
11:00/UK: Dec CBI Distributive Trades Survey
13:00/RUS: Weekly International Reserves
13:30/US: Dec Philadelphia Fed Business Outlook Survey
13:30/CAN: Oct Retail trade
13:30/US: 3Q 3rd estimate GDP
13:30/US: 3Q Revised Corporate Profits
13:30/CAN: Oct Payroll employment, earnings and hours, and job vacancies
13:30/US: 12/16 Unemployment Insurance Weekly Claims Report - Initial Claims
13:30/US: U.S. Weekly Export Sales
15:00/US: Nov Leading Indicators
15:30/US: 12/15 EIA Weekly Natural Gas Storage Report
16:00/US: Dec Federal Reserve Bank of Kansas City Survey of Tenth District Manufacturing
21:30/US: Foreign Central Bank Holdings
21:30/US: Federal Discount Window Borrowings
23:30/JPN: Nov CPI (Nation), CPI ex-food (Nation)
All times in GMT. Powered by Kantar Media and Dow Jones.
Expected Earnings for Thursday
AAR Corp (AIR) is expected to report $0.81 for 2Q.
Apogee Enterprises Inc (APOG) is expected to report $1.10 for 3Q.
CarMax Inc (KMX) is expected to report $0.45 for 3Q.
Carnival Corp (CCL) is expected to report $-0.12 for 4Q.
Cintas Corp (CTAS) is expected to report $3.48 for 2Q.
Daily Journal (DJCO) is expected to report for 4Q.
Limoneira Co (LMNR) is expected to report $-0.19 for 4Q.
Mega Uranium (MGA.T) is expected to report for 4Q.
Microbix Biosystems (MBX.T,MBXBF) is expected to report for 4Q.
Mission Produce Inc (AVO) is expected to report for 4Q.
NASB Financial (NASB) is expected to report for 3Q.
(MORE TO FOLLOW) Dow Jones Newswires
12-21-23 0615ET
