UKX FTSE 100 Index

MARKET WRAPS

Watch For:

Employment Report for December; ISM Report on Business Services PMI for December; Canada Labour Force Survey for December; earnings from Constellation Brands

Today's Headlines/Must Reads

- Markets Moving in Lockstep Threaten to Make for a Trying 2024

- Top Bank Regulator Takes on 'Drive Fast, Crash' Risk Culture

- Netflix Eyes Ways to Make Money From Videogames in Potential Pivot

Opening Call:

Stock futures fell and Treasury yields continued to rise on Friday ahead of the December payrolls report.

Expectations are for the Labor Department to report 170,000 nonfarm jobs were created last month, and for the unemployment rate to tick up a tenth to 3.8%. Hourly wages are seen rising by 0.3%.

Economists at Goldman Sachs have a slightly above-market forecast, of 190,000 jobs created. They note the seasonal adjustment factors could provide a tailwind as well as milder-than-usual winter weather in the Northeast and Midwest. But they did say lackluster holiday spending suggests a decline in retail payrolls along the lines of the 38,000 decline in November.

Bloomberg News reported a big options bet made on Thursday, that the 10-year yield will rise to as high as 4.15%.

Stocks to Watch

Endeavour Mining shares extended their sharp fall in London trading after the company dismissed its chief executive on Thursday following an investigation into an allegedly irregular payment instruction.

Medical Properties Trust fell 14% premarket after it announced on Thursday that it was giving extra support to its largest tenant.

Peloton stock rose around 2% premarket, on pace to extend Thursday's sharp gains, after the company said it would partner with TikTok to create a workout hub.

Post-Close Movers

Applied Therapeutics said a trial of AT-001 failed to show a statistically significant difference between the treatment and placebo. Shares dropped 30%.

Dermata Therapeutics received a newly issued patent in Japan. Shares more than doubled.

Fusion Pharmaceuticals had a study protocol approved by regulators. Shares rose 7.7%.

Forex:

The dollar rose ahead of the jobs data. Thursday's ADP private payrolls and weekly jobless claims were better than expected and bond yields rose.

"With [U.S.] money markets currently pricing 16bps of easing in March this year, there is still clearly some room for a further back-up in short-term rates," ING said.

This year's trend of a rising DXY dollar index "has a little further to run," it added.

Energy:

Oil prices edged higher in Europe on persisting concerns over escalating tensions in the Middle East and disruptions to global supply.

"There is still plenty of tension in the Middle East with Houthi rebels launching a sea drone in the Red Sea, [while] a U.S. air strike in Baghdad killed a commander of an Iranian-backed militia group, and Islamic State claimed responsibility for two explosions in Iran earlier this week," ING said.

Metals:

Base metals were weaker and gold flat ahead of the nonfarm payrolls, with investors aiming to gauge how the Fed will approach monetary policy this year

"With the data looking more promising, yesterday saw investors grow increasingly skeptical about the likelihood of a rate cut by March," Deutsche Bank said.

TODAY'S TOP HEADLINES

Exxon Mobil Expects Up to $2.6 Billion in Upstream Impairments

Exxon Mobil is expecting up to $2.6 billion in impairments in the fourth quarter for its upstream business, mostly related to idled assets in California.

The oil and gas giant said in a regulatory filing Thursday that it was expecting impairments of $2.4 billion to $2.6 billion in its upstream business.

New Management at Lucky Bucks Sues Former Executives, Alleges Fraud

The slot machine operator formerly known as Lucky Bucks is suing members of its former management and their affiliates, seeking the return of approximately $200 million and accusing them of defrauding the company.

Now known as Arc Gaming and Technologies, Georgia-based Lucky Bucks emerged from bankruptcy in October. The company's new management filed a lawsuit in state court on Tuesday under Georgia's Racketeer Influenced and Corrupt Organizations Act that named nine former high-ranking employees and one contractor as well as a dozen associated entities.

Berkshire Buys More Liberty SiriusXM Tracking Stock

Berkshire Hathaway purchased 2.8 million shares of the Liberty SiriusXM tracking stock in recent days, apparently seeking to capitalize on Liberty Sirius' discount relative to the value of its stake in Sirius XM Holdings, the satellite radio company.

Berkshire paid about $82 million for its recent purchases of the tracking stock, bought from Jan. 2 through Jan. 4, according to a Form 4 filing with the Securities and Exchange Commission late Thursday.

Tesla to recall 1.6 million vehicles in China

Tesla will recall 1.62 million vehicles in China, over concerns about steering software, news agencies reported Friday, citing a government statement.

AFP and Reuters reported that the China State Administration for Market Regulation said both imported as well as domestically produced vehicles were part of the recall, which will be conducted electronically. Reuters reported that the software update will be to avoid misuse of the Autosteer function and cut the risk of collision.

SpaceX Sues Labor Board Over Employee Firings

SpaceX sued the U.S. government's labor board a day after an official at the agency accused the company of violating a federal workplace law by firing employees who circulated a letter critical of Elon Musk.

The rocket company led by Musk alleged in a complaint filed in federal court Thursday that a suit brought by a director at the National Labor Relations Board is unconstitutional.

What to Watch in the Jobs Report: Slower Hiring Adds to Case for Soft Landing

The December employment report will show the labor market continued to cool but still added jobs at a solid pace as unemployment remained low, analysts estimate.

Eurozone Inflation Rose Less Than Expected, Keeping Rate-Cut Talk on Track

Eurozone inflation rebounded in December, but by less than expected, potentially fueling further speculation that the European Central Bank could soon signal its readiness to cut interest rates.

The bloc's consumer price index-a measure of the cost of goods and services-rose 2.9% on year, from 2.4% the previous month, according to preliminary data published by the European Union's statistics agency Eurostat on Friday.

China Launches Antidumping Probe Into Brandy Imported From EU

China has launched an antidumping investigation into brandy imported from the European Union, escalating trade tensions after the EU's antisubsidy probe into China's electric-vehicle makers.

The investigation will focus on brandy products that come in smaller than 200-liter containers from the EU, China's Ministry of Commerce said in a statement on Friday.

Pro Take: Fed Losses, or 'Deferred Assets,' Rise, Along With Potential for Political Backlash

The Federal Reserve considered the optics and politics of sustained financial losses before they became a reality in September 2022, even developing a term for them-"deferred assets."

A 2016 internal memo also warned of the potential for risks in Washington if the Fed failed to contribute positive earnings to the Treasury Department for the U.S. budget because of those losses.

North Korea Fires Artillery Barrage Toward Border Islands in the South

SEOUL-North Korea fired more than 200 artillery shells near the western border islands of South Korea on Friday, prompting Seoul to issue an emergency-shelter order for residents at a time when tensions between the two countries have escalated.

No residents were injured at the Yeonpyeong and Baengnyeong islands, which are located just miles from North Korea's coastline, Seoul's military said. The barrage of shells, launched from roughly 9 a.m. to 11 a.m. local time, landed in North Korean waters shy of the Northern Limit Line, a disputed inter-Korean maritime border.

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 paul.larkins@dowjones.com TODAY IN CANADA

Earnings:

None Scheduled

Economic Calendar [ET]:

0830 Dec Labour Force Survey

1000 Dec Ivey Purchasing Managers Index

Stocks to Watch:

American Tower Agrees to Sell India Operations to Brookfield Asset Management; Expects Total Cash Proceeds of Up to About $2.5B From Sale; Expects Transaction to Close in 2H; Deal Subject to Closing Conditions, Including Government and Regulatory Approvals

Expected Major Events for Friday

00:01/UK: Dec BRC-Sensormatic IQ Footfall Monitor

00:30/JPN: Dec Japan Services PMI

05:00/JPN: Dec Auto sales

05:00/JPN: Dec Consumer Confidence Survey

07:00/GER: Nov Retail Trade

07:00/UK: Dec Halifax House Price Index

07:00/UK: 4Q Halifax House Price Index: UK Regional Breakdown quarterly release

09:00/UK: Dec UK monthly car registrations figures

09:00/ITA: 3Q General Govt Quarterly Accounts

09:30/UK: Dec S&P Global UK Construction PMI

10:00/ITA: Dec Provisional CPI

10:00/ITA: Dec Cities CPI

13:30/US: U.S. Weekly Export Sales

13:30/CAN: Dec Labour Force Survey

13:30/US: Dec U.S. Employment Report

15:00/US: Nov Manufacturers' Shipments, Inventories & Orders (M3)

15:00/US: Dec ISM Report On Business Services PMI

15:00/CAN: Dec Ivey Purchasing Managers Index

All times in GMT. Powered by Kantar Media and Dow Jones.

Expected Earnings for Friday

AngioDynamics (ANGO) is expected to report $-0.24 for 2Q.

Chicken Soup for the Soul Entertainment Inc (CSSE) is expected to report $-0.77 for 3Q.

Clearday Inc (CLRD) is expected to report for 3Q.

Constellation Brands Inc (STZ) is expected to report $2.99 for 3Q.

Drive Shack Inc (DSHK) is expected to report $-0.06 for 3Q.

Environmental Tectonics Corp (ETCC) is expected to report for 3Q.

Greenbrier Cos (GBX) is expected to report $0.78 for 1Q.

Hurco Cos (HURC) is expected to report for 4Q.

Infinity Pharmaceuticals Inc (INFIQ) is expected to report $0.03 for 3Q.

National American University Holding Inc (NAUH) is expected to report for 2Q.

SIFCO Industries (SIF) is expected to report for 4Q.

Powered by Kantar Media and Dow Jones.

ANALYST RATINGS ACTIONS

Aflac Cut to Underperform From In-Line by Evercore ISI Group

Akoustis Technologies Cut to Neutral From Overweight by Piper Sandler

Allstate Raised to Overweight From Equal-Weight by Morgan Stanley

Ameren Cut to Neutral From Buy by B of A Securities

American Express Raised to Overweight From Neutral by JP Morgan

Ameriprise Cut to In-Line From Outperform by Evercore ISI Group

Apple Cut to Neutral From Overweight by Piper Sandler

Armstrong World Raised to Neutral From Sell by UBS

Automatic Data Raised to Peer Perform From Underperform by Wolfe Research

Avantor Raised to Outperform From In-Line by Evercore ISI Group

Bath & Body Works Cut to Equal-Weight From Overweight by Barclays

BJ's Wholesale Club Cut to Equal-Weight From Overweight by Wells Fargo

Brunswick Corp Cut to Market Perform From Outperform by Raymond James

Builders FirstSource Cut to Hold From Buy by Truist Securities

Capital One Cut to Neutral From Overweight by JP Morgan

Chart Industries Raised to Strong Buy From Outperform by Raymond James

Cigna Raised to Outperform From Market Perform by Bernstein

Clarus Cut to Hold From Buy by Jefferies

CNO Financial Cut to Underperform From In-Line by Evercore ISI Group

Cognizant Tech Solutions Raised to Peer Perform From Underperform by Wolfe Research

Collegium Pharmaceutical Cut to Hold From Buy by Jefferies

Comerica Raised to Buy From Neutral by Goldman Sachs

Consolidated Edison Raised to Sector Weight From Underweight by Keybanc

Dollar General Raised to Overweight From Equal-Weight by Barclays

Edwards Lifesciences Cut to In-Line From Outperform by Evercore ISI Group

Emerson Electric Raised to Buy From Neutral by Mizuho

Enphase Energy Cut to Sector Weight From Overweight by Keybanc

EPAM Systems Raised to Outperform From Peer Perform by Wolfe Research

First Watch Restaurant Cut to Hold From Buy by Stifel

First Watch Restaurant Group Inc. Cut to Hold From Buy by Stifel Nicolaus

Five Below Raised to Outperform From In-Line by Evercore ISI Group

Floor & Decor Holdings Cut to Equal-Weight From Overweight by Wells Fargo

Fox Corp. Raised to Peer Perform From Underperform by Wolfe Research

General Motors Raised to Outperform From Peer Perform by Wolfe Research

Guess Cut to Hold From Buy by Jefferies

HCA Healthcare Cut to Market Perform From Outperform by Bernstein

Home Depot Raised to Overweight From Equal-Weight by Barclays

Illumina Cut to Market Perform From Outperform by TD Cowen

Installed Building Cut to Hold From Buy by Truist Securities

International Game Tech Cut to Hold From Buy by Jefferies

Itron Cut to Market Perform From Outperform by Raymond James

MACOM Technology Cut to Neutral From Overweight by Piper Sandler

Mattel Cut to Neutral From Buy by Roth MKM

Merck Raised to Outperform From Market Perform by TD Cowen

Mesa Labs Raised to Outperform From In-Line by Evercore ISI Group

Microchip Tech Cut to Neutral From Overweight by Piper Sandler

Micron Technology Raised to Overweight From Neutral by Piper Sandler

MongoDB Cut to Neutral From Buy by UBS

Murphy USA Raised to Buy From Hold by Jefferies

NorthWestern Cut to Sector Weight From Overweight by Keybanc

Papa John's Cut to Sell From Hold by Stifel

PayPal Holdings Cut to Perform From Outperform by Oppenheimer

Pfizer Cut to Market Perform From Outperform by TD Cowen

Principal Financial Raised to In-Line From Underperform by Evercore ISI Group

PTC Raised to Overweight From Neutral by JP Morgan

PulteGroup Cut to Neutral From Buy by UBS

Qorvo Cut to Neutral From Overweight by Piper Sandler

RealReal Cut to Neutral From Outperform by Baird

Revolve Group Cut to Hold From Buy by Jefferies

Revolve Group Cut to Neutral From Outperform by Baird

Revvity Raised to Outperform From In-Line by Evercore ISI Group

Rivian Automotive Cut to Peer Perform From Outperform by Wolfe Research

Rocket Cos. Cut to Underweight From Neutral by JP Morgan

Roper Technologies Cut to Market Perform From Outperform by TD Cowen

Sallie Mae Cut to Neutral From Overweight by JP Morgan

Schneider National Cut to In-Line From Outperform by Evercore ISI Group

Skyworks Cut to Neutral From Overweight by Piper Sandler

Snowflake Cut to Sell From Neutral by Monness, Crespi, Hardt

Snowflake Stock Just Soared. Why One Analyst Thinks It's Time to Sell. -- Barrons.com

Solar Stocks Enphase and Sunrun May Be in the Political Hot Seat, Says Analyst -- Barrons.com

Sprouts Farmers Market Raised to In-Line From Underperform by Evercore ISI Group

State Street Cut to Underperform From Neutral by B of A Securities

Steven Madden Cut to Hold From Buy by Jefferies

SunPower Cut to Market Perform From Outperform by Raymond James

Sunrun Cut to Sector Weight From Overweight by Keybanc

Tech Is Tanking, but Verizon Is on Fire. The Telco Gets Another Upgrade. -- Barrons.com

Today's Stock Market Movers: Walgreens, Mobileye, Apple, APA, Callon, Peloton, Sunrun, and More -- Barrons.com

TopBuild Cut to Hold From Buy by Truist Securities

Truist Financial Raised to Buy From Neutral by B of A Securities

Unifirst Cut to Neutral From Outperform by Baird

United Natural Foods Cut to Underweight From Equal-Weight by Wells Fargo

Verizon Raised to Outperform From Peer Perform by Wolfe Research

Visteon Cut to Peer Perform From Outperform by Wolfe Research

WEC Energy Group Cut to Underperform From Neutral by B of A Securities

Western Union Cut to Underperform From Peer Perform by Wolfe Research

Yeti Holdings Cut to Hold From Buy by Canaccord Genuity

Yum Brands Cut to Hold From Buy by Stifel

Yum China Holdings Cut to Neutral From Overweight by JP Morgan

Yum! Brands Inc. Cut to Hold From Buy by Stifel Nicolaus

Zimmer Biomet Holdings Cut to In-Line From Outperform by Evercore ISI Group

This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

January 05, 2024 06:12 ET (11:12 GMT)

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