Employment Report for January; Services PMI; ISM Report on
Business Services; Canada Official International Reserves for
January; Earnings from Cigna, Cboe Global Markets and Regeneron
Today's Top Headlines/Must Reads:
- Jobs Report to Show Whether Labor Market Cooling Extended Into
- Bitcoin Prices Rally as Larger Traders Take Charge
- Ryan Cohen Takes Stake in Nordstrom
- Elon Musk's Twitter Pushes to Win Back Advertisers During
Super Bowl Weekend
- China Says It Is Looking Into Spy-Balloon Allegation by
Follow WSJ market coverage here
Stock futures were stumbling Friday, with disappointing results
from the Big Tech trio of Apple, Amazon and Alphabet weighing on
Nasdaq futures in particular.
Today's jobs report will give investors another read on the
Economists expect nonfarm payrolls grew by 187,000 in January
and the unemployment rate rose to 3.6% from 3.5%.
Stocks to Watch
Alphabet reported slowing revenue growth in the fourth quarter
and an earnings miss, sending the stock down 3.9% in premarket
Amazon.com was falling 5.5% after reporting better-than-expected
fourth-quarter sales growth but weaker-than-anticipated profit.
Apple was down 3.1% premarket after it reported fiscal
first-quarter earnings and sales that missed estimates.
Clorox reported better-than-expected profit in its fiscal second
quarter. Shares increased 3.6% in after-hours trading.
Ford's fourth-quarter earnings missed analysts' expectations and
the stock was falling more than 5% in premarket trading.
Magenta Therapeutics said it could be up for sale as part of
review of strategic alternatives. Shares rose 47% in after-hours
Nordstrom rose more than 31% after WSJ reported activist
investor Ryan Cohen has taken a big stake in the retailer.
Qualcomm was down 3.6% after the chip company issued a revenue
outlook below expectations.
Starbucks was down 2% after reporting fiscal first-quarter
earnings that missed forecasts.
With the end of central banks' interest rate rises in sight, it
seems like investors no longer worry about inflation or about going
long duration, Societe Generale said.
"This seems premature in Europe, with core inflation still
rising and showing no signs of a turn. A pause [in interest rate
rises] beyond the summer is highly likely, but the pricing of rate
cuts from late 2023 relies on inflation quickly returning to
Societe Generale continues to underweight EUR rates versus U.S.
rates, seeing a bullish outlook more plausible in Treasurys as the
Federal Reserve is approaching the pivot, while the European
Central Bank is lagging.
The dollar could fall if the nonfarm payrolls data for January
are weaker, Unicredit Research said.
"A slide in the number of nonfarm payrolls (we expect 190,000
from the previous 223,000) is not too heavy but, coupled with a
rise in the unemployment rate to 3.6%, might still weigh on the
greenback [dollar] and allow EUR/USD to steady back above 1.10 as
the week concludes."
The recovery in EUR/USD might be even more evident if the ISM
non-manufacturing survey disappoints expectations with the index
remaining below 50, signaling a contraction in sector activity, as
Unicredit expects, it said.
Sterling faces further weakness after the Bank of England
signalled Thursday that further interest-rate rises should only be
expected if inflationary pressures persist, Commerzbank said.
"A further rate hike in March is no longer that certain, and it
is possible that the BOE has already reached the end of the rate
While the BOE left the door open to further rate rises, the
forex market would have liked to see a more decisive approach given
high uncertainty so it's hardly surprising that sterling fell,
Read Sterling Drops as UK Rate Rise Bets Fall More Than
The ECB's unclear communications at yesterday's policy meeting
is causing the euro to weaken, ING said.
Lagarde's press conference brought "more fog than clarity" about
the rate path beyond March, ING said.
"We remain of the view that at least 75bp of extra tightening
will be delivered by the ECB, which still puts EUR/USD in a
position for a big rally in the second quarter--when U.S.
short-term rates may come off more steadily."
"The ECB communication troubles may cap EUR/USD before then,"
Oil prices ticked lower in Europe despite an impending EU ban on
Russian oil product exports which is expected to tighten crude
The EU's ban is set to come into force Sunday. Ample time to
prepare and strong Russian exports of crude and oil products ahead
of the ban are keeping prices in check, ING said.
"Despite this imminent disruption to flows, the market appears
relatively calm...the market has had a significant amount of time
to prepare for the ban. We have seen strong inflows of middle
distillates into Europe ahead of Feb. 5,"
Base metals were mixed in early London trade, with gold slightly
lower, ahead of the nonfarm payroll data due later.
This week has been a bumper data week, with more positive data
out of China meeting Western central banks indicating more monetary
tightening may be needed in March as they seek to taper
"Despite Chinese growth outperforming, slowing economic growth
elsewhere globally will result in muted global demand growth for
metals," Fitch Solutions said.
It sees metal prices climbing this year on Chinese demand but
elsewhere the picture looks less clear.
TODAY'S TOP HEADLINES
Ryan Cohen Takes Stake in Nordstrom
Activist investor Ryan Cohen is amassing a sizable stake in
Nordstrom Inc. and intends to urge the upscale department-store
chain to make changes to its board following a steep share-price
decline, according to people familiar with the matter.
Mr. Cohen, known for helping ignite big rallies in so-called
meme stocks including GameStop Corp., is one of the top-five
nonfamily shareholders of Nordstrom, the people said.
Big Tech Didn't Quite Clear the Bar
Big tech just closed out a rough year. The current one won't get
much better soon.
Apple, Amazon.com and Google parent Alphabet Inc. all reported
December quarter results Thursday afternoon that showed the effects
of the weakening global economy across most of the companies'
diverse business lines. These include online advertising,
cloud-computing services, e-commerce and tech gadgets such as
smartphones, laptops and smartwatches. These are big businesses,
totaling nearly $1.2 trillion in revenue for the three companies in
Activist Investor Nelson Peltz Steps Up Pressure on Disney
Activist investor Nelson Peltz escalated his criticism of the
Walt Disney Co.'s board and advocated for the removal of director
Michael B.G. Froman, blaming him for backing governance and
compensation decisions that Mr. Peltz says have harmed the
company.Mr. Peltz's Trian Fund Management LP said Thursday in a
letter that Disney's board was responsible for the company's recent
share-price declines, falling income and other examples of
"destruction of value," because it had failed to plan properly for
CEO succession and align the incentives of management and the board
with those of shareholders."We cannot sit idly by," Trian said in
the letter, part of its proxy battle that seeks to add Mr. Peltz,
an 80-year-old corporate-raider-turned-activist-investor, to
Disney's board. Trian pushed shareholders to demand "an ownership
mentality in the boardroom," or risk further stock-price
Elon Musk's Twitter Pushes to Win Back Advertisers During Super
Twitter Inc. is leveraging its most important night of the year
to help it win back the long list of advertisers that ditched the
social-media platform after Elon Musk's $44 billion takeover of the
The San Francisco-based company has been ramping up its Super
Bowl pitch to advertisers, offering a last-minute deal on one of
its most high-profile, big-game ad packages, according to an email
viewed by The Wall Street Journal. It is also telling advertisers
that the number of conversations on its platform about the Super
Bowl and the National Football League is up significantly from a
year earlier, according to other emails sent to advertisers and ad
Adani Group Selloff Deepens, Taking Flagship Company's Weekly
Losses Above 50%
Shares in Adani Group companies were trading lower Friday,
extending a weeklong selloff that has wiped out more than $100
billion in market value and forced its flagship business to cancel
a share sale that would have raised more than $2.0 billion.
Adani Enterprises Ltd. fell 15% in early trading, taking its
losses this week to 52%. Adani Transmission Ltd. and Adani Green
Energy Ltd. both lost 10%, while Adani Power Ltd., Adani Total Gas
Ltd. and Adani Wilmar Ltd. all dropped 5.0% and Adani Ports &
Special Economic Zone Ltd. fell 9.7%.
Ford Posts $1.3 Billion Fourth-Quarter Profit, Misses Full-Year
Ford Motor Co. posted disappointing quarterly results Thursday,
leading the U.S. auto maker to miss its full-year profit guidance
for 2022, as supply-chain snags, quality problems and structural
inefficiencies continued to drag on earnings.
The Dearborn, Mich. auto maker posted $1.3 billion in net income
for the fourth quarter, an 89% drop from the prior-year period,
when its profits were lifted by one-time items, items, such as a
multibillion paper gain on its investment in EV startup Rivian
Starbucks Reports Record Quarterly Revenue While Costs Rise
Starbucks Corp. said Thursday it generated record revenue during
its last quarter, though higher costs ate into its profit.
For the three months ended Jan. 1, Starbucks reported earnings
per share of 75 cents, adjusted for one-time items, below the 77
cents a share expected by analysts polled by FactSet. The chain
reported net income of $855 million, about 5% higher than the $816
million generated in the same quarter a year earlier.
Qualcomm Posts 12% Drop in Sales
Qualcomm Inc. gave a muted outlook as it posted a 12% drop in
sales, reflecting softness in the global smartphone market.
The designer of mobile-phone chips on Thursday said sales in the
quarter fell to $9.5 billion, short of Wall Street's expectation of
$9.6 billion. The company said sales in the current quarter could
fall even more steeply as it forecast revenue between $8.7 billion
and $9.5 billion, also missing estimates from analysts surveyed by
Meta Platforms Shares Surge 23% on Cost Cuts, Stock Buyback
Facebook parent Meta Platforms Inc. shares soared to their best
day in nearly a decade after the company embraced investor-friendly
moves including boosting its stock through a $40 billion buyback
and cutting expenses in the face of increased competition.
Shares of the social-media company closed Thursday up 23% to
$188.87 and are up 57% year to date. The stock recorded its largest
percentage increase since July 2013, when it rose nearly 30%.
Google Parent Alphabet Posts Drop in Ad Revenue Amid
Google reported its first drop in advertising revenue since the
beginning of the pandemic, as a slowdown in online marketing
continues to weigh on the search giant's business.
Alphabet Inc., Google's parent company, reported $59 billion in
advertising revenue for the fourth quarter, a decrease of 3.6% from
the same period in 2021. Those results marked the second time ad
sales fell since Google became a publicly traded company in
McDonald's Ruling Shifts Oversight Liability Focus to Corporate
A judge's decision to allow a shareholder lawsuit against a
former McDonald's Corp. human resources chief has put corporate
executives on alert that they can be held personally liable for
failing to oversee the biggest risks confronted by their
The ruling follows a series of Delaware Court of Chancery
decisions that have set off alarm bells in corporate boardrooms by
making clear that directors can be sued for serious compliance
failures. The latest decision by Vice Chancellor J. Travis Laster
clarifies that the legal scrutiny doesn't stop with the board.
Corporate officers can also be held to account for failing to do
their part, the judge ruled.
Bitcoin Prices Rally as Larger Traders Take Charge
Larger investors appear to be powering a recovery in bitcoin
prices, as the sway of smaller individual traders over
cryptocurrency markets wanes.
Based on end-of-day trading prices, bitcoin has rallied about
51% from a nadir hit in November, after the collapse of the crypto
exchange FTX, according to Dow Jones Market Data. It was quoted
late Thursday at about $23,600, and drifted slightly lower in early
trading Friday. Other tokens such as ether and dogecoin have also
rebounded. The recovery mirrors a rebound in other risky assets,
such as some high-growth technology stocks.
Jobs Report to Show Whether Labor Market Cooling Extended Into
January's employment report will offer clues about the state of
the labor market and overall economy at the start of 2023.
Recent figures paint a mixed picture of U.S. economic health.
Consumer spending, the main driver of economic growth, is starting
to falter. Manufacturing activity is declining. Price increases are
easing, partly as a result of the Federal Reserve's interest-rate
increases aimed at slowing the economy to bring down high
Bonds Take Flight. But Investors Should Brace for Bumps
Fixed income is off to a flying start in 2023, a major
turnaround from last year. But the path ahead looks bumpier.
The rally has swept through nearly all fixed-income sectors. In
investment-grade bonds, the iShares Core U.S. Aggregate Bond
exchange-traded fund (ticker: AGG) is up 4.1%. More impressive are
gains in long-term bonds, with the iShares 20+ Year Treasury Bond
ETF (TLT) ahead 8.9%, clawing back a bit of last year's 31%
China Caixin Services PMI Bounced Back in January
A private gauge of China's service-sector activity bounced back
in January to expansionary territory, signaling a quick economic
recovery following Beijing's removal of its stringent Covid-19
containment regime in December.
The Market Tanked, but Americans Kept Piling Money Into Their
Americans largely stifled the urge to reduce their savings rates
and sell stocks in their retirement accounts last year, even as the
market declined and inflation soared.
About 90% of investors in the 401(k)-style retirement plans
administered by Vanguard Group maintained or increased their
savings rate in 2022. And trading activity fell to a two-decade low
among participants who manage their own investments, according to
data from the Malvern, Pa.-based company.
Mark Cuban and Amazon Are Shaking Up Generic Drugs
Americans tremble at the idea of losing their health coverage,
but bypassing giant insurers saves some people serious money on
prescriptions in a topsy-turvy system.
Consider the story of Ohio pharmacist Nate Hux. Since 2016, his
Pickerington Pharmacy has accepted many types of insurance. But,
due to his frustration with the way middlemen, known as
pharmacy-benefit managers, pocket large profits through opaque
pricing methods, he decided to open another pharmacy right next
door that takes no insurance. It sells generic drugs for their cost
plus a markup, sometimes saving customers hundreds of dollars.
China Says It Is Looking Into Spy-Balloon Allegation by U.S.
China declined to confirm whether it sent a spy balloon over the
continental U.S. but said it wanted to handle the allegation calmly
U.S. officials said on Thursday that a Chinese reconnaissance
balloon had been spotted over Montana, adding that it was expected
to pass in a southeasterly direction over the country for a few
Ukraine Hopes New Bombs From U.S. Will Help It Push Back
ORIKHIV, Ukraine-Ukraine last summer stunned Russian troops with
precision strikes from U.S.-supplied Himars mobile rocket
launchers. Now an even more potent rocket system holds the
potential to re-energize Kyiv's troops.
U.S. officials are expected Friday to say they will give Ukraine
new Ground-Launched Small Diameter Bombs, precision-guided,
250-pound explosives that are strapped to rockets and can be fired
from a Himars or another launcher. The armament, which has never
been deployed and is only at the start of production, has a range
of roughly 94 miles, or around twice the range of current Himars
Northeast Braces for Bitter Cold as Wind Chill Could Hit Minus
65 Degrees in Some Areas
A blast of bitter cold will sweep across the Midwest and
Northeast Friday, with snow squalls and sudden whiteout conditions
making driving, particularly on highways, dangerous.
Wind chill from gusty northwesterly winds will make for the
coldest weather in decades, the National Weather Service said.
Wind-chill warnings and advisories are in effect for the Northern
Plains as well as the Northeast. Record-breaking lows are forecast
for the New York City, Boston and Providence areas.
Nearly 1,000 Migrant Children Separated From Parents at Border
Haven't Been Reunited, Data Shows
Nearly 1,000 children separated from their parents at the U.S.
border under the Trump administration's zero-tolerance policy on
illegal immigration haven't been reunited, federal data shows,
despite a multiyear effort to do so.
The federal program has reunited 600 migrant children with their
parents, according to numbers released by the Department of
Homeland Security on Thursday, the second anniversary of the
establishment of the Family Reunification Task Force by President
Biden soon after he assumed office.
Texas Storms Leave Hundreds of Thousands Without Power
Hundreds of thousands of Texans remained without power as
utility crews worked to fix power lines and poles downed or iced
over by storms this week.
More than 300,000 customers had no power Thursday afternoon,
with most of the outages concentrated in central and northern Texas
communities, according to tracking site PowerOutage.us.
Write to firstname.lastname@example.org TODAY IN CANADA
Brookfield Renewable Partners 4Q
Trilogy Metals 4Q
Economic Events (ET):
0815 Jan Official International Reserves
Stocks to Watch:
Constellation Software Announces Delayed Release Date of Its
Results for the 4Q and Yr Ended Dec 31, 2022; Cites Complexities
Caused by Carve-Out Acctg Associated With Acquisition of Altera
Digital Health; Expects to 4Q Results in March
Diversified Royalty: Stuart Suls Retired, Effective Jan 20
Firm Cap Property Trust Announces Acquisition of 50% Interest in
Two Manufactured Home Communities for C$5.7 M
Lion Electric Completed Sale-Leaseback for Mirabel Mattery
Methanex 4Q EPS 59c; 4Q Rev $986M
Expected Major Events for Friday
00:01/UK: Jan BRC-Sensormatic IQ Footfall Monitor
00:30/JPN: Jan Japan Services PMI
06:00/RUS: Jan Russian Services PMI
07:45/FRA: Dec Industrial production index
08:45/ITA: Jan Italy Services PMI
08:50/FRA: Jan France Services PMI
08:55/GER: Jan Germany Services PMI
09:30/UK: Jan S&P Global / CIPS UK Services PMI
09:30/UK: Jan UK Official Reserves
13:15/CAN: Jan Official International Reserves
13:30/US: Jan U.S. Employment Report
14:45/US: Jan US Services PMI
15:00/US: Jan ISM Report On Business Services PMI
16:00/US: Jan Global Services PMI
All times in GMT. Powered by Onclusive and Dow Jones.
Expected Earnings for Friday
ArcBest Corp (ARCB) is expected to report $2.67 for 4Q.
Associated Capital Group Inc (AC) is expected to report for
Avantor Inc (AVTR) is expected to report for 4Q.
Blade Air Mobility Inc (BLDE) is expected to report for 4Q.
Brookfield Business Corp (BBUC) is expected to report for
Brookfield Renewable Corp (BEPC,BEPC.T) is expected to report
Brookfield Renewable Partners LP (BEP,BEP.UN.T) is expected to
report $-0.10 for 4Q.
CIGNA Corp (CI) is expected to report $3.63 for 4Q.
Cboe Global Markets Inc (CBOE) is expected to report $1.53 for
Church & Dwight Inc (CHD) is expected to report $0.59 for
First United Corp (FUNC) is expected to report for 4Q.
Gorman-Rupp Co (GRC) is expected to report for 4Q.
GrafTech International Ltd (EAF) is expected to report for
IES Holdings Inc (IESC) is expected to report for 1Q.
Immunovant Inc (IMVT) is expected to report for 3Q.
Johnson Outdoors (JOUT) is expected to report $0.73 for 1Q.
Moog Inc - Class A (MOGA,MOGB) is expected to report $1.33 for
Piper Sandler Cos (PIPR) is expected to report for 4Q.
Potomac Bancshares (PTBS) is expected to report for 4Q.
Regeneron Pharmaceuticals Inc (REGN) is expected to report $9.67
SIFCO Industries (SIF) is expected to report for 1Q.
Saia Inc (SAIA) is expected to report $2.94 for 4Q.
Schmitt Industries (SMIT) is expected to report for 2Q.
Sun Country Airlines Holdings Inc (SNCY) is expected to report
System1 Inc (SST) is expected to report for 4Q.
Twin Disc Inc (TWIN) is expected to report $0.07 for 2Q.
Twist Bioscience Corp (TWST) is expected to report $-0.99 for
Ubiquiti Inc (UI) is expected to report for 2Q.
Virtus Investment Partners Inc (VRTS) is expected to report for
WisdomTree Inc (WT) is expected to report $0.05 for 4Q.
Zimmer Biomet Holdings (ZBH) is expected to report for 4Q.
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ANALYST RATINGS ACTIONS
Align Technology Raised to Neutral From Sell by Goldman
Align Technology Shares Rally Amid 4Q Beat, Bullish Analyst
Ashland Global Holdings Cut to Underweight From Neutral by JP
Astra Space Cut to Hold From Buy by Deutsche Bank
FedEx Raised to Buy From Neutral by B of A Securities
FedEx Raised to Buy From Neutral by Citigroup
First Solar Cut to Neutral From Buy by B of A Securities
Fortinet Cut to Market Perform From Outperform by BMO
Fortune Brands Cut to Hold From Buy by Loop Capital
Graco Raised to Buy From Neutral by Seaport Global
GXO Logistics Cut to Underperform From Neutral by Exane BNP
Ingevity Raised to Buy From Hold by Loop Capital
Match Group Cut to Perform From Outperform by Oppenheimer
McGrath RentCorp Raised to Buy From Neutral by Sidoti &
Meta Platforms Raised to Buy From Neutral by B of A
Meta Platforms Raised to Buy From Neutral by Rosenblatt
Meta Platforms Raised to Overweight From Neutral by Piper
O-I Glass Raised to Outperform From Sector Perform by RBC
Okta Raised to Buy From Hold by Needham
Peloton Interactive Cut to Market Perform From Market Outperform
by JMP Securities
Peloton Interactive Cut to Underperform From Neutral by Exane
Qualtrics International Cut to Hold From Buy by Deutsche
R1 RCM Cut to Hold From Buy by Truist Securities
Silicon Laboratories Raised to Buy From Hold by Summit Insights
Sysco Cut to Hold From Buy by Argus Research
Taysha Gene Therapies Cut to Neutral From Buy by BTIG
Varonis Systems Cut to Hold From Buy by Needham
This article is a text version of a Wall Street Journal
newsletter published earlier today.
(END) Dow Jones Newswires
February 03, 2023 06:26 ET (11:26 GMT)
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