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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