MARKET WRAPS

Watch For:

U.S. CPI for September; BlackRock Inc. 3Q results; JPMorgan Chase & Co. 3Q results.

Opening Call:

Stock futures ticked down ahead of fresh data on consumer prices and the start of earnings season, both of which are expected to provide insight into whether recent concerns about inflation are warranted.

Stocks have been weighed down by fears about inflation in recent days, stoked by rising energy prices and continued bottlenecks in supply chains. Investors are trying to gauge the effect this could have on central bank support for the economy and whether the higher costs for raw materials and energy will erode profits as third-quarter earnings season kicks off.

"Equity markets need to incorporate the higher uncertainty on central banks' approaches and the uncertainties on the earnings side," said Antonio Cavarero, head of investments at Generali Insurance Asset Management. "This doesn't mean the tide has turned, but some higher caution is probably the way to go for the next few weeks."

Data on the consumer price index for September is set to go out at 8:30 a.m. ET. Economists project that inflation remained at an elevated level, boosted by worker shortages and strained supply chains.

"The Fed will be very sensitive to this number. If it comes very far from market expectations, they will have an incentive to prove they are on top of things," Mr. Cavarero said.

Federal Reserve official Raphael Bostic said Tuesday that there was a risk of inflation being more persistent than expected and that he was on board with an imminent pullback in some stimulus measures. The Fed is expected to publish minutes from its last meeting at 2 p.m., providing investors with more insight into policymakers' views.

Several household-name companies are scheduled to report earnings on Wednesday ahead of the opening bell, including JPMorgan, BlackRock and Delta Air Lines.

"Have we passed the point of the sweet spot-low costs and explosive demand, to a point where demand is softening and costs are picking up? We do expect to see some signs of that starting to emerge," said Sebastian Mackay, a multiasset fund manager at Invesco. "I do believe we'll be in a more rocky patch for equities, where they will be moving sideways or possibly down a little bit."

Stocks to Watch:

Apple shares were down in late trading Tuesday, pressured by a Bloomberg report that says the company is "likely" to reduce its iPhone 13 production target by up to 10 million units due to ongoing component shortages.

The article asserts that Apple had expected to produce 90 million new iPhones in the December quarter, but that the company is telling manufacturing partners that the total is now likely to be lower, due to a shortage of components from both Broadcom and Texas Instruments.

Apple never comments on production goals. In response to a query from Barron's, Apple declined to comment on the report, which is sourced to "people with knowledge of the matter."

On a conference call with investors after Apple reported June-quarter financial results, Chief Financial Officer Luca Maestri said that the company expected supply constraints to be worse in the September quarter, with a particular impact on both iPhones and iPads.

In reporting March results, Apple had warned that supply constraints would trim June-quarter sales by between $3 billion and $4 billion, but Maestri said Apple was able to make adjustments and reduce the impact to slightly below the low end of that range.

Forex:

The dollar fell after rising strongly on Tuesday as investors look ahead to U.S. inflation data and the Federal Reserve's meeting minutes later for clues on the central bank's next policy steps.

The DXY dollar index dropped 0.1% to 94.4130 after rising to a one-year high of 94.5610 on Tuesday. A narrowing of the spread between short-term and long-term U.S. Treasury yields on Tuesday allowed the safe-haven dollar to "maintain its upward momentum aided by risk hedging buying ahead of U.S. inflation data tonight and nervousness about growth outlooks in the third quarter earnings season releases," Oanda analyst Jeffrey Halley said.

Sterling was little moved after U.K. economic growth data missed forecasts but could fall later if the figures prompt the market to scale back interest rate rise expectations, Silicon Valley Bank said.

The U.K. economy grew 0.4% month-on-month in August, below the 0.6% growth expected by economists in a WSJ survey. The miss will stoke concerns about slower growth combined with high inflation, or stagflation, Silicon's vice president Sam Cooper said.

"While sterling was largely unchanged in the immediate aftermath, any indication that the miss could cast doubts on expectations for the Bank of England to raise interest rates in the near future will see the pound come under pressure."

Bonds:

The yield on the benchmark 10-year Treasury note held steady at 1.578% Wednesday, from 1.579% Tuesday.

A higher-than-expected increase in consumer prices in the U.S. in September could upset equities and spill into high-yield corporate bonds, said UniCredit.

"An adverse reaction in equities is also likely to adversely affect the high-yield market, which suffered again yesterday," analysts at the bank said. They added that the iBoxx high yield nonfinancial corporate bond index widened five basis points to 295 bps Tuesday, the highest level since March.

In their view, any spread widening in either investment-grade or the high-yield corporate bonds should nonetheless be contained due to a supportive technical backdrop of falling new-bond supply and bond-buying by the European Central Bank. U.S. Sept.

Commodities:

Oil prices stabilized following a report that suggested Iran nuclear talks could recommence as soon as this week, prompting some traders to price in a potential higher supply of crude to the market.

Tempered demand due to the sharp rise in energy prices may also be contributing to the stabilization, according to Mr. Mackay. "We are probably entering the stage where prices have moved up so quickly that we are now getting a demand response, people are reining in spending and that starts to balance the market a little bit," he said.

European benchmark natural gas prices were up 6.6% at EUR91.37 per megawatt hour, with the recent price drivers going nowhere.

The idea of insufficient energy expenditure features prominently in the IEA's World Energy Outlook released early Wednesday, in which the watchdog said that while oil and gas spending was "one of the very few areas that is reasonably well-aligned,"--with the levels necessary for net-zero emissions by 2050--clean-energy spending needs to triple in order to avoid the risk of more energy market turbulence. OPEC's monthly report is due later Wednesday.

Base metals rose across the board after Chinese exports rose at a faster-than-expected pace last month, despite concerns about supply bottlenecks and power shortages.

Three-month copper on the LME was up 0.9% at $9,539.50 a metric ton while aluminum gained 1.3% to $3,107 a ton and nickel rose 1.3% to $19,200 a ton.

China's exports rose 28.1% last month, a quicker pace than in August and more than economists had been expecting, suggesting strong economic activity in the world's second-largest economy. Imports missed expectations, but copper imports rose, snapping five consecutive months of decline and lifting hopes about demand for the red metal.

Gold prices ticked higher ahead of U.S. CPI data which should offer clues into the Fed's plans for tapering and interest rates.

TODAY'S TOP HEADLINES

SAP Shares Rise Amid Continuing Cloud Push

Shares in Germany's SAP SE rose Wednesday as its cloud business continued to grow in the last quarter, prompting the business-software giant to raise targets for the third time this year.

At 0855 GMT, SAP shares traded 5% higher at EUR122.74.

Read More ->

Boeing Mandates Covid-19 Vaccine for U.S. Employees

Boeing Co. said it will mandate Covid-19 vaccination for its approximately 125,000 U.S. employees by the Dec. 8 deadline set by a presidential order requiring federal employees and contractors to receive the shots.

The company said it is requiring its U.S.-based employees to either show proof of vaccination or have an approved medical or religious exemption.

Read More ->

Netflix's 'Squid Game' Is Slammed by Kim Jong Un's Propagandists as 'Beastly'

SEOUL-"Squid Game," Netflix Inc.'s dystopian drama set in South Korea, is the top-watched show in more than 90 countries.

But one nation isn't giving rave reviews: North Korea.

Read More ->

PR Firm Sard Verbinnen to Merge With Finsbury Glover Hering

Public-relations firm Sard Verbinnen & Co. has agreed to merge with rival Finsbury Glover Hering in a move that will create a major new player in the business of advising companies on deals, crises and other critical situations.

The deal was announced Wednesday by WPP PLC, Finsbury's majority owner, valuing the combined firm at more than $900 million. The Wall Street Journal reported late Tuesday that the agreement was set to be announced.

Read More ->

Hasbro CEO Brian Goldner Dies at Age 58

Hasbro Inc. Chief Executive Brian Goldner, who pushed the storied toy company far beyond playthings into movies and entertainment, died Tuesday, just days after he took a leave of absence for medical care.

He was 58 years old and on Sunday said he was stepping aside from his position of more than a decade. Mr. Goldner had been diagnosed with prostate cancer in 2014 and had been undergoing treatment over the past year.

Read More ->

Former Braskem CEO Sentenced for Bribery Charges in U.S.

The former chief executive officer of Brazilian petrochemical company Braskem SA has been sentenced to 20 months in prison for his role in a scheme that diverted $250 million from the company to a slush fund to pay Brazilian government officials, the U.S. Justice Department said.

Tuesday's sentencing of Jose Carlos Grubisich, a 64-year-old Brazilian citizen, at the federal court in Brooklyn, N.Y., comes after his guilty plea in April. He pleaded guilty to one count of conspiring to violate the antibribery provisions of the U.S. Foreign Corrupt Practices Act and one count of conspiring to violate the books and records provision of the FCPA and failing to accurately certify Braskem's financial reports as a corporate officer, the Justice Department said.

Read More ->

L.A. Port to Operate Around the Clock to Ease Cargo Logjams, White House Says

WASHINGTON-The White House on Wednesday is expected to announce a pledge from one of the country's busiest ports to operate around the clock, a move aimed at easing cargo bottlenecks that have led to goods shortages and higher consumer costs.

By going to 24/7, the Port of Los Angeles will join the neighboring Port of Long Beach, Calif., which started doing the same thing last month. Major ports in Asia and Europe have operated around the clock for years.

Read More ->

Clarida Defends Himself Amid Federal Reserve Trading Controversy

The Federal Reserve's second in command on Tuesday defended trading he undertook early last year just ahead of a key shift in monetary policy, as the coronavirus pandemic was beginning to take hold in the U.S.

"I've had the opportunity to serve in the Council of Economic Advisers, the Treasury and the Federal Reserve across four administrations, as part of a career in economic policy, academia and the private sector that has spanned nearly 40 years, and I've always acquitted myself honorably and with integrity with respect to the obligations of public service," Fed Vice-Chairman Richard Clarida said during a virtual appearance.

Read More ->

Fed Is Behind the Curve on Countering Runaway Inflation Risks, Summers Says

SYDNEY--Former U.S. Treasury Secretary Larry Summers has sounded alarm bells over risks of runaway inflation in the U.S., saying the Federal Reserve is moving glacially in its efforts to counter the threat.

The Fed's traditional role is to "remove the punchbowl just before the party starts," Mr. Summers told a Citi investment conference in via Zoom on Wednesday.

Read More ->

Biden Administration Embarking on 'Aggressive' Tack for Cryptocurrency, White House Official Says

The Biden administration is only beginning to ramp up regulatory scrutiny around cryptocurrencies, according to a senior White House official.

Peter Harrell, senior director for international economics and competitiveness with the National Security Council, said the administration would move to address a range of risks around the emerging sector while seeking to position the U.S. as a leader in digital asset innovation.

Read More ->

Investor Shift From Fossil Fuels Leaves Surging Market to Smaller Players

This should be a great time for energy investors. Few of them are still around to enjoy it.

Years of awful returns and pressure from clients to exit from the oil-and-gas business have left fewer and smaller firms able to take advantage of rising prices and help boost production. The unwillingness of some banks to make energy loans has compounded the challenges to boosting energy supplies.

Read More ->

Chinese Exports Grew at Faster Pace in September

BEIJING--China's exports grew at a faster-than-expected pace last month, shrugging off logistics bottlenecks, power shortages and other negative effects that risk denting demand.

Chinese exports rose 28.1% in September from a year earlier, accelerating from a 25.6% increase in August, the General Administration of Customs said Wednesday.

Read More ->

Governments' Climate Pledges Not Enough to Meet Paris Agreement Targets, IEA Says

The world's governments are set to fail to prevent dangerous climate change even if the lofty pledges lawmakers and business have laid out in recent months are successfully implemented, the International Energy Agency said Wednesday.

Whether lawmakers continue with policy measures already in place or follow through on their latest promises, rising temperatures will exceed the limit global leaders committed to in the Paris Agreement of keeping overall global temperatures to less than two degrees Celsius above preindustrial levels, the IEA said.

Read More ->

U.S. Convenes International Summit on Ransomware

The U.S. will convene a summit of more than 30 nations starting Wednesday to discuss methods to combat ransomware. Russia wasn't invited.

Read More ->

Covid-19 Vaccine-Mandate Fight Between Texas and Biden Has Companies Caught in the Middle

The move by Texas to bar Covid-19 vaccine mandates by businesses sets up a clash between the state and the Biden administration, leaving employers caught in the middle.

On one side, Monday's executive order from Texas Gov. Greg Abbott forbids any private entity to require its employees or customers to get vaccinated. On the other hand, the Biden administration is working on requirements that private-sector workers be vaccinated or tested weekly at businesses with 100 or more employees.

Read More ->

California to Ban Sales of Gas-Powered Leaf Blowers and Lawn Mowers

California will become the first state to ban the sale of gas-powered leaf blowers and lawn mowers under legislation signed by Gov. Gavin Newsom.

The Democrat also on Saturday signed a bill mandating that stores have gender-neutral toy and child-care aisles and another that requires students to take an ethnic-studies class before graduating high school, ahead of a Sunday deadline to approve or veto bills passed in the legislative session that ended in September.

Read More ->

Write to sarka.halas@wsj.com

TODAY IN CANADA

Earnings:

Aritzia Inc. (ATZ.T) 2Q

Economic Indicators (ET):

Nothing major scheduled

Stocks to Watch:

*BlackBerry: BlackBerry, Google and Qualcomm Join Forces to Drive Advancements in Next-Generation Automotive Cockpits

Other News:

U.S. to Ease Covid-19 Curbs on Land-Border Crossings

The Biden administration intends to ease Covid-19 travel restrictions on land-border crossings from Canada and Mexico and will require foreign nationals taking those routes into the U.S. for nonessential reasons to show proof of vaccination beginning in November.

The new rules from the Department of Homeland Security will amend land-travel restrictions first imposed by the Trump administration in 2020 that have become a source of frustration for the Canadian and Mexican governments and for U.S. border cities, particularly as Covid-19 vaccines have become widely available across the U.S.

For the first time in 20 months, Canadian and Mexican citizens will be permitted to enter the U.S. at its land-border crossings for purposes such as shopping or visit family and friends so long as they are fully vaccinated. Mexican and Canadian citizens were always permitted to enter for essential reasons such as attending school or trucking goods across the border.

Unvaccinated travelers will still be prohibited from coming to the U.S. for nonessential travel.

Senior administration officials told reporters Tuesday evening that the new rules are designed to bring the land borders into harmony with a new vaccine requirement for international travelers arriving by air, also set to take effect in November.

In January, the U.S. will extend the land-border vaccine requirement to foreign nationals coming to the U.S. for essential travel. The administration officials said this additional time would allow a smooth transition to the new system for truck drivers and others. The officials said the implementation dates for the new rules would be announced later.

Market Talk:

No items published

Expected Major Events for Wednesday

06:00/UK: Aug Index of production

06:00/UK: Aug UK trade

06:00/UK: Aug Index of services

06:00/UK: Aug Monthly GDP estimates

06:00/GER: Sep CPI

10:00/FRA: Aug OECD Harmonised Unemployment Rates

11:00/US: 10/08 MBA Weekly Mortgage Applications Survey

12:30/US: Sep Real Earnings

12:30/US: Sep CPI

14:00/US: Sep Online Help Wanted Index

16:59/GER: Aug Balance of Payments

17:59/UK: Sep NIESR Monthly GDP Tracker

18:00/US: Sep Monthly Treasury Statement of Receipts & Outlays of the U.S. Govt

20:30/US: 10/08 API Weekly Statistical Bulletin

23:01/UK: CBI and PwC Financial Services Survey

23:01/UK: Sep RICS Residential Market Survey

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

Expected Earnings for Wednesday

A&W Revenue Royalties Income Fund (AW.UN.T,AWRRF) is expected to report for 3Q.

Aritzia Inc (ATZ.T) is expected to report $0.18 for 2Q.

Basic Energy Services (BASXQ) is expected to report for 2Q.

BlackRock Inc (BLK) is expected to report $9.57 for 3Q.

CPI Aerostructures (CVU) is expected to report $0.06 for 1Q.

Delta Air Lines (DAL) is expected to report $0.28 for 3Q.

E2open Parent Holdings Inc (ETWO) is expected to report for 2Q.

Firan Technology Group Corp (FTG.T) is expected to report for 3Q.

First Republic Bank (FRC) is expected to report $1.84 for 3Q.

JPMorgan Chase & Co (JPM) is expected to report $3.01 for 3Q.

Mission Produce Inc (AVO) is expected to report for 3Q.

National American University Holding Inc (NAUH) is expected to report for 1Q.

Nurix Therapeutics Inc (NRIX) is expected to report for 3Q.

Oil Dri Corporation of America (ODC) is expected to report for 4Q.

Sleep Number Corp (SNBR) is expected to report $1.43 for 3Q.

Steel Connect Inc (STCN) is expected to report for 4Q.

Theratechnologies (TH.T,THTX) is expected to report $-0.07 for 3Q.

Washington Federal (WAFD) is expected to report $0.63 for 4Q.

Winmark (WINA) is expected to report for 3Q.

Powered by Kantar Media and Dow Jones.

ANALYST RATINGS ACTIONS

Acuity Brands Raised to Neutral From Sell by UBS

Adamas Pharmaceuticals Cut to Market Perform From Market Outperform by JMP Securities

Adamas Pharmaceuticals Cut to Neutral From Buy by HC Wainwright & Co.

Adamas Pharmaceuticals Cut to Neutral From Overweight by Piper Sandler

Airbnb Raised to Outperform From Market Perform by Cowen & Co.

Altice USA Cut to Hold From Buy by Deutsche Bank

Amkor Technology Cut to Neutral From Outperform by Credit Suisse

Archer Daniels Midland Cut to Equal-Weight From Overweight by Stephens & Co.

Callaway Golf Raised to Buy From Neutral by Compass Point

Charter Communications Cut to Hold From Buy by Deutsche Bank

Citrix Systems Cut to Market Perform From Outperform by William Blair

First Bancorp NC Cut to Neutral From Overweight by Piper Sandler

Flexion Therapeutics Cut to Market Perform From Outperform by BMO Capital

Flexion Therapeutics Cut to Market Perform From Strong Buy by Raymond James

Flexion Therapeutics Cut to Neutral From Outperform by Credit Suisse

Fortinet Is Maintained at Equal-Weight by Morgan Stanley

Kilroy Realty Raised to Hold From Sell by Deutsche Bank

Kirby Corp Raised to Buy From Hold by Stifel

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

Lumentum Holdings Cut to Outperform From Strong Buy by Raymond James

MGM Resorts Raised to Outperform From Neutral by Credit Suisse

Protagonist Therapeutics Raised to Overweight From Neutral by JP Morgan

Reinsurance Group Raised to Outperform From Market Perform by Keefe, Bruyette & Woods

Square Inc Raised to Overweight From Neutral by Atlantic Equities

Trex Co Cut to Neutral From Outperform by Baird

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

(END) Dow Jones Newswires

October 13, 2021 06:07 ET (10:07 GMT)

Copyright (c) 2021 Dow Jones & Company, Inc.