MARKET WRAPS
Watch For:
Weekly Jobless Claims; ADP National Employment Report for
December; EIA Weekly Petroleum Status Report; Earnings from
Walgreens Boots Alliance, Conagra, Lamb Weston
Today's Top Headlines/Must Reads:
- Stocks' Bad Start to 2024 Has Forecasters on Edge
- The Hidden Force Pushing Mortgage Rates Down
- Why Companies Still Aren't in a Firing Mood
Opening Call:
Stock futures nudged higher on Thursday, as Wall Street looked
to stabilize after a poor start to the year.
Equity bulls will be hoping that data continues to show economic
activity slowing to the extent that it helps the Federal Reserve
achieve its 2% inflation target, but not by so much that it
indicates a contraction that would badly hit corporate
earnings.
To that end investors will keep a close eye on the December
nonfarm payrolls report, released Friday, hoping it shows steady
jobs growth with benign wage pressures.
Premarket Movers
Dyne Therapeutics commenced an underwritten public offering of
$175 million of shares of its common stock. The stock fell 6%
premarket.
Intel named Justin Hotard as executive vice president and
general manager of its data-center and AI group, effective Feb. 1.
Shares rose 0.6%.
Meta CEO Mark Zuckerberg sold about $428 million of company
stock over the final two months of 2023, according to a regulatory
filing. Shares were rising 0.4%.
MongoDB was downgraded to Neutral from Buy at UBS and the price
target was lowered to $410 from $475, the Fly reported. Shares were
falling 1.3%.
Tesla shares edged higher premarket after Wednesday's 4%
selloff. The stock came under pressure after releasing deliveries
numbers on Tuesday that showed its quarterly sales falling behind
China's BYD.
Wednesday's Post-Close Movers
Cal-Maine Foods' profit fell sharply in the fiscal second
quarter as egg prices dropped from their heights a year ago. Shares
fall 6.5% in after-market trading.
Collegium Pharmaceutical guided for higher revenue and adjusted
earnings in the next fiscal year. Shares rise 2% in after-market
trading.
Forex:
The euro was firmer as the dollar turned lower, but difficult
economic conditions in the eurozone might constrain its progress,
CPT Markets said.
The European Central Bank could face mounting pressure to reduce
interest rates if economic indicators continue to deteriorate,
weakening the euro, CPT said.
Money markets price in 160 basis points of ECB rate cuts
throughout the year, according to Refinitiv data.
German inflation data on Thursday could impact the euro, while
eurozone inflation figures on Friday will be key for highlighting
the path of inflation, CPT added.
Commerzbank said the dollar has risen at the start of 2024,
recovering some of its recent losses but without any apparent
trigger, and its gains could be curtailed without strong economic
data.
Friday's non-farm payrolls data for December will be key, where
Commerzbank sees a risk of a weaker figure, while Thursday's ADP
private payrolls could also "surprise to the downside."
Morgan Stanley has turned neutral on the outlook for the USD.
The bank said its prior conviction about the currency's ongoing
strength has waned meaningfully.
Investors appear to be adopting the mentality that a peak in Fed
hawkishness will be enough to overwhelm USD positives such as
potential upside surprises to U.S. growth, downside growth
surprises abroad, or an uptick in U.S. inflation, the bank
said.
USD strength is harder to envision as U.S. interest rates have
fallen further compared with peers, it added.
Energy:
Oil prices rose around 1% on mounting concerns over global
supply as tensions in the Middle East continued to grow.
Explosions at a ceremony in Iran to commemorate the death of
military commander Qassem Soleimani added to tensions in the region
amid shipping disruptions in the Red Sea and the killing of a
senior Hamas leader in Lebanon.
Meanwhile, the shutdown of Libya's largest oilfield due to local
protests fuelled market concerns over tight supply.
Metals:
Base metals were mixed while gold edged higher as traders waited
for Friday's nonfarm payroll report to gauge which way Fed policy
will move this year.
"Investors are questioning if the Fed will cut interest rates
six times in 2024 if the economy is heading for a soft landing,
i.e., maybe five cuts is more realistic," Peak Trading Research
said.
"This slightly hawkish shift in Fed expectations has supported
the dollar this week, a bearish headwind for our dollar-denominated
commodity markets," Peak added.
Wilson Asset Management Leaders said too much lithium supply may
be cause for concern.
"We did buy into the lithium space," it said, but added that the
fund has been selling some of its lithium stock holdings.
"There's a huge amount of supply out there," it said, adding
that WAM Leaders is a "little bit cautious on lithium."
Iron-ore prices are now likely to average $150/ton over the next
three months, Citi said, representing an upgrade on its previous
forecast of $140/ton.
China is likely to step up targeted support for specific areas
of the real-estate sector, which would be supportive of steel and
iron ore demand, Citi added.
TODAY'S TOP HEADLINES
Google Is Finally Killing Cookies. Advertisers Still Aren't
Ready.
Google is going forward with sweeping changes to how companies
track users online-moves that have been years in the making.
Advertisers still aren't ready.
The changes, among the biggest in the history of the $600
billion-a-year online ad industry, center on the use of cookies,
technology that logs the activity of internet users across websites
so that advertisers can target them with relevant ads.
Fisker Ditches Tesla-Style Direct-Sales Model in Favor of
Dealerships
The electric-vehicle startup Fisker is abandoning a
direct-to-consumer sales model in the U.S. in favor of using
traditional dealerships, after it found the approach too expensive
and struggled in 2023 to get its cars to buyers quickly.
The company is in talks with U.S. dealers and hopes to sign up
at least 50 this year, said Chief Executive Officer Henrik
Fisker.
Jeff Bezos Bets on a Google Challenger Using AI to Try to Upend
Internet Search
Perplexity, a startup going after Google's dominant position in
web search, has won backing from Jeff Bezos and venture capitalists
betting that artificial intelligence will upend the way people find
information online.
Started less than two years ago, Perplexity has fewer than 40
employees and is based out of a San Francisco co-working space. The
company's product, which it calls an answer engine, is used by
about 10 million people monthly.
What the 2024 Tax Brackets Mean for Your Money
Your tax bill is largely determined by tax brackets. These are
really just ranges of taxable income. As your taxable income moves
up this ladder, each layer gets taxed at progressively higher
rates.
Cyber Leaders With Tight Budgets Still Must Secure AI, Cloud
Corporate cybersecurity leaders are looking for ways to spend
less in 2024 and still focus on securing technologies for business
operations as companies face continued hacking threats.
High priorities include protecting artificial intelligence and
cloud computing, which have seen increasing corporate use, and
reducing the number of cyber suppliers, chief information security
officers say.
Russia Moves Forward With Plans to Buy Iranian Ballistic
Missiles
Russia is planning to buy short-range ballistic missiles from
Iran, a step that would enhance Moscow's ability to target
Ukraine's infrastructure at a critical moment in the conflict, U.S.
officials said.
Moscow's plans have provoked deep concern within the Biden
administration and come as support wanes in Congress for continued
U.S. military assistance for Ukraine. Lawmakers have yet to pass a
bill that would provide additional funding for Ukraine.
U.S. Seeks Drone Bases in Coastal West Africa to Stem Islamist
Advance
NAIROBI-The U.S. is seeking to base military drones along the
West African coast in an urgent effort to stop the spread of al
Qaeda and Islamic State in the region, according to American and
African officials.
The U.S. is holding preliminary talks to allow American unarmed
reconnaissance drones to use airfields in Ghana, Ivory Coast and
Benin, countries on the Atlantic Ocean. Relatively stable and
prosperous, the three coastal countries, along with Togo, now find
themselves threatened by Islamist militants surging south from
Mali, Burkina Faso and Niger-three beleaguered nations in the
Sahel, the semidesert band south of the Sahara.
Write to ina.kreutz@wsj.com
TODAY IN CANADA
Earnings:
Nothing scheduled
Economic Calendar (ET):
0815 Dec Official International Reserves
0930 Dec Canada Services PMI
Stocks to Watch:
Algoma Steel Sees 3Q Total Steel Shipments 515,000 Tons
Expected Major Events for Thursday
00:30/JPN: Dec Japan Manufacturing PMI
06:30/GER: Dec North Rhine Westphalia CPI
07:45/FRA: Dec Provisional CPI
08:45/ITA: Dec Italy Services PMI
08:50/FRA: Dec France Services PMI
08:55/GER: Dec Germany Services PMI
09:00/GER: Dec Hesse CPI
09:00/GER: Dec Brandenburg CPI
09:00/GER: Dec Baden-Wuerttemberg CPI
09:00/GER: Dec Bavaria CPI
09:30/UK: Nov Money and Credit - Lending to Individuals, Lending
to Businesses, Broad Money and Credit
09:30/UK: Nov Monetary & Financial Statistics
09:30/UK: Nov Bank of England effective interest rates
09:30/UK: Dec UK Official Reserves
09:30/UK: Dec S&P Global UK Services PMI
09:30/UK: Dec Narrow money (Notes & Coin) and reserve
balances
10:00/GER: Dec Saxony CPI
12:30/US: Dec Challenger Job-Cut Report
13:00/GER: Dec Provisional CPI
13:15/US: Dec ADP National Employment Report
13:15/CAN: Dec Official International Reserves
13:30/US: 12/30 Unemployment Insurance Weekly Claims Report -
Initial Claims
14:30/CAN: Dec Canada Services PMI
14:45/US: Dec US Services PMI
15:00/US: Nov Metropolitan Area Employment and Unemployment
15:30/US: 12/29 EIA Weekly Natural Gas Storage Report
16:00/US: 12/29 EIA Weekly Petroleum Status Report
16:00/US: Dec Global Services PMI
17:00/US: Dec Monthly U.S. Retail Chain Store Sales Index
21:30/US: Federal Discount Window Borrowings
21:30/US: Foreign Central Bank Holdings
23:50/JPN: Dec Monetary Base
All times in GMT. Powered by Kantar Media and Dow Jones.
Expected Earnings for Thursday
Buckle Inc (BKE) is expected to report.
Conagra Brands Inc (CAG) is expected to report $0.68 for 2Q.
Costco Wholesale Corp (COST) is expected to report.
Daily Journal (DJCO) is expected to report for 4Q.
Franklin Covey Co (FC) is expected to report $0.19 for 1Q.
Greenlane Holdings Inc (GNLN) is expected to report for 3Q.
Kura Sushi USA Inc (KRUS) is expected to report for 1Q.
Lamb Weston Holdings Inc (LW) is expected to report $1.42 for
2Q.
Lindsay Corp (LNN) is expected to report $1.30 for 1Q.
Odyssey Marine Exploration Inc (OMEX) is expected to report for
3Q.
Park Aerospace Corp (PKE) is expected to report for 3Q.
Quantum Corp (QMCO) is expected to report $-0.09 for 2Q.
RPM International Inc (RPM) is expected to report $1.22 for
2Q.
RVL Pharmaceuticals PLC (RVLPQ) is expected to report for
3Q.
Schnitzer Steel Industries Inc (RDUS) is expected to report
$0.58 for 1Q.
Simply Good Foods (SMPL) is expected to report $0.36 for 1Q.
Taylor Devices (TAYD) is expected to report for 2Q.
Technical Communications Corp (TCCO) is expected to report for
4Q.
Walgreens Boots Alliance Inc (WBA) is expected to report $0.20
for 1Q.
Powered by Kantar Media and Dow Jones.
ANALYST RATINGS ACTIONS
Ambarella Cut to Equal-Weight From Overweight by Wells Fargo
Ameriprise Raised to Buy From Neutral by Goldman Sachs
Antero Resources Cut to Neutral From Buy by Mizuho
AptarGroup Raised to Outperform From Neutral by Baird
Aptiv Cut to Neutral From Outperform by Baird
Arcutis Biotherapeutics Raised to Buy From Neutral by Mizuho
Aurora Innovation Cut to Sell From Neutral by Goldman Sachs
Avery Dennison Cut to Neutral From Buy by Citigroup
BellRing Brands Cut to Hold From Buy by Truist Securities
Blackstone Cut to Neutral From Buy by Goldman Sachs
BorgWarner Cut to Neutral From Outperform by Baird
Bristol-Myers Squibb Cut to Neutral From Buy by B of A
Securities
CACI International Cut to Hold From Buy by Jefferies
Callon Petroleum Cut to Neutral From Buy by Mizuho
CBRE Group Cut to In-Line From Outperform by Evercore ISI
Group
Charles Schwab Cut to Neutral From Buy by Goldman Sachs
Chesapeake Energy Cut to Neutral From Buy by Mizuho
Citigroup Raised to Outperform From Peer Perform by Wolfe
Research
Civitas Resources Raised to Buy From Neutral by Mizuho
CME Group Cut to Sell From Neutral by Goldman Sachs
CNX Resources Raised to Neutral From Underperform by Mizuho
Comstock Resources Cut to Underperform From Neutral by
Mizuho
Crescent Energy Co Cut to Neutral From Buy by Mizuho
Securities
Crescent Energy Cut to Neutral From Buy by Mizuho
Cullen/Frost Bankers Cut to Underperform From In-Line by
Evercore ISI Group
Discover Financial Raised to Overweight From Neutral by Piper
Sandler
Equitable Cut to Neutral From Overweight by JP Morgan
Exxon Mobil Cut to Neutral From Buy by Mizuho
Gulfport Energy Cut to Neutral From Buy by Mizuho
Health Catalyst Raised to Outperform From In-Line by Evercore
ISI Group
Huntington Bancshares Raised to Outperform From In-Line by
Evercore ISI Group
Keurig Dr Pepper Cut to Equal-Weight From Overweight by Morgan
Stanley
Kymera Therapeutics Cut to Neutral From Buy by B of A
Securities
Lazard Raised to Outperform From Peer Perform by Wolfe
Research
Lincoln National Cut to Underweight From Neutral by JP
Morgan
Masimo Cut to Hold From Buy by Needham
Maximus Cut to Market Perform From Outperform by Raymond
James
MaxLinear Cut to Equal-Weight From Overweight by Wells Fargo
Mercury Systems Cut to Underperform From Hold by Jefferies
Northern Trust Cut to Underperform From Peer Perform by Wolfe
Research
NY Community Bancorp Raised to Neutral From Underperform by
Wedbush
Occidental Petroleum Cut to Neutral From Buy by Mizuho
O-I Glass Cut to Neutral From Buy by Citigroup
Pactiv Evergreen Raised to Buy From Neutral by Citigroup
PBF Energy Raised to Buy From Neutral by Mizuho
PJT Partners Cut to Underperform From Peer Perform by Wolfe
Research
PNM Resources Cut to Neutral From Buy by Mizuho
PNM Resources Raised to Overweight From Equal-Weight by Wells
Fargo
PPG Industries Raised to Buy From Hold by Vertical Research
Prudential Financial Cut to Neutral From Overweight by JP
Morgan
PureCycle Technologies Cut to Hold From Buy by Craig-Hallum
Raymond James Cut to Neutral From Buy by Goldman Sachs
Regions Financial Cut to In-Line From Outperform by Evercore ISI
Group
Rocket Cos. Cut to Equal-Weight From Overweight by Wells
Fargo
Rocket Cos. Cut to Underperform From Market Perform by Keefe,
Bruyette & Woods
Rockwell Automation Raised to Buy From Neutral by UBS
Sherwin-Williams Cut to Neutral From Outperform by Baird
Silgan Holdings Cut to Neutral From Buy by Citigroup
SoFi Technologies Cut to Underperform From Market Perform by
Keefe, Bruyette & Woods
Southern First Bancshares Raised to Overweight From Neutral by
Piper Sandler
State Street Raised to Buy From Neutral by Goldman Sachs
SW Energy Cut to Underperform From Neutral by Mizuho
Synovus Cut to In-Line From Outperform by Evercore ISI Group
Unum Group Raised to Overweight From Neutral by JP Morgan
Verizon Raised to Overweight From Sector Weight by Keybanc
Wendy's Cut to Equal-Weight From Overweight by Barclays
Xponential Fitness Cut to Neutral From Overweight by Piper
Sandler
Yum Brands Raised to Overweight From Equal-Weight by
Barclays
This article is a text version of a Wall Street Journal
newsletter published earlier today.
(END) Dow Jones Newswires
January 04, 2024 06:17 ET (11:17 GMT)
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