Weekly Jobless Claims; EIA Weekly Petroleum Status Report; FedEx
Stock futures fell Thursday as investors continued to react to
Jerome Powell's acknowledgement that a recession in the U.S. will
be hard to avoid as the Federal Reserve fights a rapid rise of
Jeffrey Halley, senior market analyst at OANDA, said Powell's
discussion about a "challenging" soft landing "should have been
enough to spark a somewhat counterintuitive risk sentiment rally as
Fed hiking expectations were dialed back."
But instead, Halley said, the response was mixed as Powell
"asserted, quite forcefully, that soaring inflation had to be
brought back to earth."
Recent economic data are sending signals that inflation and the
Fed's tightening cycle are weighing on activity, Barclays said.
Household consumption, a key growth driver for the economy, has
been resilient in the last few months but high-frequency indicators
suggest that consumers are slowing their spending. The housing
sector is also deteriorating, pointing to a sharp weakening of
activity in the coming quarters, Barclays said.
It expects GDP to grow at an annualized rate of 2% on quarter in
the second quarter and by 1.5% in both the third and fourth
"We predict growth to remain below trend in 2023, with quarterly
GDP growth to drop to just 0.5% during the second half, suggesting
high recession risks."
The dollar is unlikely to depreciate on a sustained basis even
though the market has scaled back its interest-rate rise
expectations due to recession fears and inflation expectations have
eased, said MUFG Bank.
The market has pared its expectations for the Fed's peak rate to
just over 3.5% while the 10-year breakeven inflation rate has
fallen to 2.55% from a peak of 3.04% in April, said MUFG.
Overall, recent developments have dampened upward pressure on
the dollar but they aren't "sufficient on their own to trigger a
deeper and/or sustainable reversal of dollar strength."
Oil prices continued to fall in Europe, last down almost 2%, on
heightened demand worries as recession expectations rise.
While commodity indexes have been "super weak for a while," oil
has been a bit of an outlier on the lower supply and higher demand
outlook, said SPI Asset Management's Stephen Innes.
"But I think it's a fallacy to think oil could stay this
elevated given the amount of central bank-induced slowdown likely
to be seen later in the year."
The Fed and other inflation-fighting central banks want lower
commodities, which is what they are explicitly trying to engineer,
Gold edged lower in Europe but ANZ said the threat of an
economic downturn is likely to provide a floor to prices, despite
central banks aggressively hiking rates to tame inflation.
OANDA puts resistance at $1860 and support at $1805, with senior
market analyst Jeffrey Halley saying: "I would need to see a couple
of daily closes above $1900 to get excited about a reinvigorated
Copper prices continued to fall after hitting a 16-month low on
Wednesday, as macroeconomic weakness pressured markets.
"The macro environment has gone from bad to worse this week,"
said Peak Trading Research. "Forward-looking inflation expectations
keep dropping. This is no surprise given that Powell is
laser-focused on getting inflation back down to 2%."
TODAY'S TOP HEADLINES
Elon Musk Calls Tesla's New Car Factories 'Gigantic Money
Tesla Inc.'s two newest car factories have been losing billions
of dollars as supply-chain disruptions and battery-cell
manufacturing challenges limit the company's ability to increase
production, Elon Musk said in a recent interview.
The company's plants in Germany and Texas, which opened earlier
this year, are "gigantic money furnaces," the Tesla chief executive
said in a May 30 interview with a Tesla owners' club that was
Revlon Stock Surges After Bankruptcy Filing, Aided by Individual
Traders have found the latest meme stock in the makeup
Shares of Revlon Inc. surged $2.08, or 34%, to close at $8.14 on
Wednesday, up 650% from an all-time low set last week, as
individual investors helped the cosmetics maker's stock have its
best three-day stretch on record following its mid-June bankruptcy
BMW Opens Electric-Car Plant in China
Bayerische Motoren Werke AG opened a $2.2 billion plant in China
for electric cars, as the German auto maker seeks to catch up with
Tesla Inc. and Chinese rivals in the country's booming
The 15 billion yuan investment in the plant is the biggest that
BMW has ever made in China, its largest market, the company said in
a statement Thursday. The plant in the northern industrial city of
Shenyang will be operated by BMW and its local partner and will
boost the joint venture's annual output by around 18% from 2021 to
830,000 vehicles, BMW said.
Chinese Shipping Companies Dive Amid Rising Recession Fears
Chinese shipping companies' shares dropped in Hong Kong on
Thursday, following the U.S. Federal Reserve's overnight warning of
a potential economic contraction, which could weigh on U.S. demand
for imported goods and consequently global shipping activity.
Pacific Basin Shipping Ltd. plunged as much as 10% by the midday
trading break, while COSCO SHIPPING Holdings Co. and Orient
Overseas (International) Ltd. each were down 4.7% and 7.2%,
Norway Central Bank Hikes Rate to Surprise 1.25% From 0.75%,
Signals Next Move in August
Norway's central bank unexpectedly raised its key policy rate to
1.25% from 0.75% on Thursday, and said it expects to raise the rate
further to 1.50% in August.
Analysts polled by The Wall Street Journal had expected the
central bank to raise its key rate to 1.00%.
Philippines Raises Benchmark Interest Rate as Inflation Risks
The Philippine central bank raised its benchmark interest rate
to rein in rising prices amid a longer-term outlook of elevated
inflation in the Southeast Asian nation.
The Bangko Sentral ng Pilipinas on Thursday increased its
benchmark overnight borrowing rate by 25 basis points to 2.50% and
its corresponding lending rate by the same amount to 3.00%.
Bank Indonesia Stands Pat, Says Will Keep an Eye on
Indonesia's central bank kept its benchmark interest rate
unchanged on Thursday, in line with economists' expectations but as
many other economies tighten policy to tame rising inflation.
Bank Indonesia maintained its key benchmark seven-day reverse
repo rate at 3.50%, as predicted by six out of 10 economists polled
by The Wall Street Journal. It held its overnight deposit and
lending facility rates at 2.75% and 4.25%, respectively.
China Approves Plan to Develop Fintech Sector Regulations
Chinese President Xi Jinping approved a plan to standardize and
develop regulations for the payments and financial technology
sector in a high-level meeting, signaling that a regulatory
crackdown on the sector might be easing.
The core function of fintech platform companies should serve the
real economy and authorities will enhance the supervision of
payment firms and their financial activities, according to a
Wednesday meeting of the Central Commission for Comprehensively
Deepening Reform chaired by Mr. Xi, state media Xinhua
Ukraine Set to Be Invited to Become EU Member in Week of Summits
Uniting Against Russia
Ukraine is expected to take a step closer to European Union
membership as leaders of the world's liberal democracies kick off a
week of summitry Thursday, seeking a show of unity against Russia's
invasion despite pressure from rising food and energy prices, voter
discontent and internal discord over how to support Kyiv.
The gatherings begin in Brussels, where EU leaders are likely to
invite Ukraine and neighbor Moldova to begin the protracted process
of entering the bloc. The 27 leaders will also debate potential
responses to soaring bills for fuel and groceries that EU citizens
are facing in the wake of Russian President Vladimir Putin's
four-month-long war. They arrive days after France's recently
re-elected President Emmanuel Macron was humbled by angry voters in
parliamentary elections that cost his party a majority.
Write to email@example.com TODAY IN CANADA
Evertz Tech 4Q
Field Trip Health 4Q
Neighbourly Pharmacy 4Q
Economic Indicators (ET):
0830 Apr Employment Insurance
Stocks to Watch:
Cathedral Energy Services Announces Acquisition of Operating
Assets of Compass Directional Services for C$9.5M
Turqoise Hill Target Price Cut 14% to C$42.00/Share by
Xenon Pharmaceuticals Prices $250.0M Public Offering of Shrs,
Warrants; Offering 7,868,854 Common Shrs, Pre-Funded Warrants for
327,868 Shrs; Shrs Being Offered at $30.50 Each, Pre-Funded
Warrants at $30.4999 Each; Xenon Has Granted Underwriters Option
for 1,229,508 Shrs
Xenon Offering Expected to Close on or About June 27; Jefferies,
J.P. Morgan, SVB Securities, Stifel Acting as Managers for
Expected Major Events for Thursday
00:30/JPN: Jun Japan Flash Manufacturing PMI
05:30/JPN: May Tokyo area department store sales
05:30/JPN: May Nationwide department store sales
06:00/UK: May Public sector finances
06:45/FRA: Jun Monthly business survey (goods-producing
07:15/FRA: Jun France Flash PMI
07:30/GER: Jun Germany Flash PMI
08:30/UK: Jun Flash UK PMI
10:00/UK: Jun CBI Distributive Trades Survey
12:30/CAN: Apr Employment Insurance
12:30/US: 1Q International Transactions
12:30/US: 06/18 Unemployment Insurance Weekly Claims Report -
13:00/RUS: Weekly International Reserves
13:45/US: Jun US Flash Manufacturing PMI
13:45/US: Jun US Flash Services PMI
14:30/US: 06/17 EIA Weekly Natural Gas Storage Report
15:00/US: 06/17 EIA Weekly Petroleum Status Report
15:00/US: Jun Federal Reserve Bank of Kansas City Survey of
Tenth District Manufacturing
20:30/US: Foreign Central Bank Holdings
20:30/US: Federal Discount Window Borrowings
23:01/UK: Jun UK Consumer Confidence Survey
23:30/JPN: May CPI (Nation), CPI ex-food (Nation)
23:50/JPN: May Services Producer Price Index
All times in GMT. Powered by Kantar Media and Dow Jones.
Expected Earnings for Thursday
Accenture PLC (ACN) is expected to report $2.83 for 3Q.
Apogee Enterprises Inc (APOG) is expected to report $0.56 for
Armstrong Flooring Inc (AFIIQ) is expected to report $-0.26 for
BlackBerry (BB,BB.T) is expected to report $-0.13 for 1Q.
CalAmp (CAMP) is expected to report $-0.25 for 1Q.
Capstone Green Energy Corp (CGRN) is expected to report for
Darden Restaurants (DRI) is expected to report $2.21 for 4Q.
Evertz Technologies (ET.T,EVTZF) is expected to report $0.16 for
Factset Research Systems (FDS) is expected to report $1.94 for
FedEx Corp (FDX) is expected to report $6.66 for 4Q.
GMS Inc (GMS) is expected to report $1.58 for 4Q.
Kayne Anderson Energy Infrastructure Fund Inc (KYN) is expected
to report for Full year.
Methode Electronics (MEI) is expected to report $0.43 for
National Energy Services Reunited Corp (NESR) is expected to
report $0.11 for 1Q.
Nautilus (NLS) is expected to report $-0.72 for 1Q.
Republic First Bancorp (FRBK) is expected to report $0.07 for
Rite Aid Corp (RAD) is expected to report for 1Q.
Singularity Future Technology Ltd (SGLY) is expected to report
Smith & Wesson Brands Inc (SWBI) is expected to report for
Techprecision Corp (TPCS) is expected to report for 4Q.
VistaGen Therapeutics Inc (VTGN) is expected to report $-0.06
Powered by Kantar Media and Dow Jones.
ANALYST RATINGS ACTIONS
Anthem Cut to Equal-Weight From Overweight by Morgan Stanley
Beacon Roofing Supply Cut to Sector Perform From Outperform by
Boston Beer Cut to Market Perform From Outperform by
Brixmor Property Group Raised to Overweight From Neutral by JP
Burlington Stores Cut to Market Perform From Outperform by Cowen
Cigna Raised to Overweight From Equal-Weight by Morgan
Convey Health Soltns Cut to Equal-Weight From Overweight by
Convey Health Soltns Cut to Neutral From Buy by Guggenheim
Dow Cut to Underperform From Neutral by Credit Suisse
Enerpac Tool Group Raised to Overweight From Equal-Weight by
Equity Residential Raised to Outperform From Sector Perform by
Extra Space Storage Raised to Overweight From Neutral by JP
GMS Cut to Sector Perform From Outperform by RBC Capital
Hudson Pacific Properties Cut to Neutral From Buy by B of A
Installed Building Cut to Underperform From Sector Perform by
Jack In The Box Cut to Market Perform From Outperform by Cowen
JELD-WEN Cut to Underperform From Sector Perform by RBC
Kraft Heinz Raised to Outperform From Market Perform by BMO
Medical Properties Trust Cut to Neutral From Overweight by JP
New York Times Cut to Neutral From Buy by Cannonball
Nike Cut to Neutral From Buy by Seaport Global
Palomar Holdings Raised to Overweight From Neutral by Piper
PNM Resources Raised to Buy From Neutral by Mizuho
PulteGroup Cut to Sector Perform From Outperform by RBC
Scotts Miracle-Gro Cut to Equal-Weight From Overweight by Wells
SiteOne Landscape Supply Raised to Sector Perform From
Underperform by RBC Capital
Summit Materials Raised to Outperform From Sector Perform by RBC
Taylor Morrison Home Raised to Outperform From Sector Perform by
Welltower Raised to Overweight From Neutral by JP Morgan
This article is a text version of a Wall Street Journal
newsletter published earlier today.
(END) Dow Jones Newswires
June 23, 2022 05:14 ET (09:14 GMT)
Copyright (c) 2022 Dow Jones & Company, Inc.
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