MARKET WRAPS

Watch For:

Weekly Jobless Claims; PPI for September; EIA Weekly Petroleum Status Report; Canada Manufacturing Survey for August; results from Bank of America, Citigroup, Morgan Stanley, UnitedHealth, Wells Fargo

Opening Call:

Stock futures rose ahead of a wave of earnings, including from major banks, which investors will use to assess how companies are positioned to deal with risks including inflation and higher energy prices.

"Can companies weather those risks or was the entire rally only fueled by ultraloose monetary policy?" said Carsten Brzeski, ING's global head of macro research. Investors are looking to see "where are we in terms of the post-lockdown cycle and also to get some insights into how solid earnings and companies are going into this tapering period and this era of somewhat higher interest rates."

Data include jobless claims for the week ended Oct. 9, which are forecast to fall for a second consecutive week when figures are released at 8:30 a.m. ET, according to economists surveyed by The Wall Street Journal.

Overseas, the pan-continental Stoxx Europe 600 added 0.7%, while indexes in Asia closed with mixed performance.

Stocks to Watch:

Deere workers represented by the United Auto Workers union went on strike after an agreement over wages and benefits couldn't be reached with the agricultural equipment giant. The strike began around midnight Central time.

Workers earlier this week rejected a new, six-year collective bargaining agreement. The UAW said 90% of its members voted against the contract proposal, which would have provided workers with immediate raises of 5% to 6%.

The contract, which also included improved benefits, would have covered more than 10,000 workers at 14 facilities across the United States, according to Deere.

Deere said operations would keep running while talks with the union continued, but added it couldn't estimate when the strike might end.

"We are determined to reach an agreement with the UAW that would put every employee in a better economic position and continue to make them the highest paid employees in the agriculture and construction industries, " said Brad Morris, Deere vice president of labor relations, in a statement early Thursday.

Forex:

The dollar continued to weaken in Europe and although the market largely shrugged off the higher-than-expected CPI reading, inflation fears haven't gone away, said DBS. It noted that data due later Thursday may show PPI surged 8.7% on year in September. However, DBS said there is still room for the USD Index to rise further toward 96.00 in the coming months.

Unicredit said a drop in the 10-year Treasury-German Bund yield spread below 170 basis points was also likely to be contributing to the dollar's decline.

"EUR/USD is showing resilience again re-approaching the 1.16 handle but has to break above 1.1650 to reduce selling pressure in a more convincing way."

Sterling's gains on speculation about an imminent U.K. interest-rate rise are expected to be limited, reflecting concerns about the nation's particularly severe supply chain issues, labor shortages and high inflation, said Commerzbank.

Many of the supply shortages that the world is experiencing reflect pent-up demand in the wake of coronavirus so are expected to be temporary but this view doesn't apply to the U.K. due to Brexit, said Commerzbank's Ulrich Leuchtmann. The U.K. also faces further political and economic risks from its stubborn position in post-Brexit negotiations, he added.

"Those make a stronger sterling impossible, despite rapid Bank of England rate hikes."

The Turkish lira fell to a record low versus the dollar after President Recep Tayyip Erdogan fired three central bank officials. Erdogan removed deputy governors Ugur Namik Kucuk and Semih Tumen along with Monetary Policy Committee member Adullah Yavas.

"Erdogan believes that cutting interest rates causes inflation to fall, and he tends to fire central bank employees, including governors, who disagree with him in this respect," said Oanda analyst Jeffrey Halley. "Readers should be pencilling in USD/TRY trading on a 10.0000 handle sooner rather than later."

Bonds:

The narrowing gap between shorter- and longer-term Treasury yields suggests investors expect the Fed might increase rates faster than they previously anticipated, which could slow growth further out in the future. Central-bank officials have said that much of the recent pickup in inflation is temporary and expect it to moderate in the years ahead, particularly as supply-chain bottlenecks ease.

"There's a lot more sensitivity to inflation data now," said Gennadiy Goldberg, senior U.S. rates strategist at TD Securities. "The market is becoming more and more concerned that we are getting an inflationary shock."

Deutsche Bank analysts now expect the Fed to start raising short-term interest rates in December 2022 instead of the third quarter of 2023, in part due to rising inflation expectations, according to a report Wednesday. The bank predicts the central bank will maintain a gradual pace and the federal-funds rate will reach 1.9% by the end of 2024.

AXA Investment Managers said the latest inflation data from the U.S. and Germany shouldn't give central banks any reason to change their announced policy.

In the case of the Fed, it means a gradual scaling back of the bond-buying programs from November, followed by gradual rises of key interest rate from mid-2022, said Achim Stranz, chief investment officer. For the European Central Bank it means a similar strategy with a six- to 12-month time lag.

Commodities:

Oil prices extended their gains in Europe following the IEA's monthly market report release, showing forecasts for as much as 500,000 barrels a day of extra oil demand in the coming months as a result of gas-to-oil switching.

"An acute shortage of natural gas, LNG and coal supplies stemming from the gathering global economic recovery has sparked a precipitous run-up in prices for energy supplies and is triggering a massive switch to oil products and direct crude use for power generation," the IEA said, adding that power-generation plants, fertilizer producers, manufacturing operations and refineries are all affected.

Gold prices hovered close to a one-month high after the inflation data, which also pushed the dollar and Treasury yields lower, further helping bullion.

TODAY'S TOP HEADLINES

Effort to Bar Tech Companies From 'Self-Preferencing' Gains Traction

WASHINGTON-Legislation to bar internet companies from favoring their own products on their platforms is gaining more support, in what could be a potential threat to the business models of tech giants like Amazon.com Inc. and Apple Inc.

Bipartisan Senate legislation set to be unveiled on Thursday would prohibit dominant platforms from favoring their own products or services, a practice known as self-preferencing. It would also bar these dominant platforms from discriminating among business users in a way that materially harms competition.

Read More ->

Facebook Limits Employee Access to Some Internal Discussion Groups

Facebook Inc. has told employees it is tightening controls over some internal discussion groups, a move that comes after Frances Haugen, a former employee, gathered documents that formed the foundation of The Wall Street Journal's Facebook Files series showing the company's platforms are riddled with flaws that can cause harm.

Facebook provides staff online discussion groups on an internal message system called Workplace, where staff can cooperate or exchange ideas. In a memo to employees Tuesday, the social-media giant said it would restrict who can view group discussions on topics such as platform safety and election integrity, the company confirmed. The move to restrict internal data access was reported earlier Wednesday by the New York Times.

Read More ->

LaserShip Is Buying Package Carrier OnTrac in a $1.3 Billion Deal

Fast-growing parcel carrier LaserShip Inc. agreed to buy Western U.S. rival OnTrac Logistics Inc. in an approximately $1.3 billion deal aimed at extending the regional last-mile delivery specialist's reach across a wider swath of the U.S. at a time of surging e-commerce demand.

The transaction is expected to close at the end of October and would create a network allowing two-day shipping to 74% of the U.S. population, LaserShip Chief Commercial Officer Josh Dinneen said.

Read More ->

Netflix Employee Group Calls for Walkout Amid Tensions Over Dave Chappelle Show

Tensions are rising inside Netflix Inc. over a Dave Chappelle stand-up special that some employees said was offensive to the transgender community, the latest clash between the streaming giant's radical-candor culture and its embrace of creative freedom.

A Netflix transgender-employee group is encouraging staff to stage a walkout next Wednesday to protest Co-Chief Executive and Chief Content Officer Ted Sarandos's recent defense of Mr. Chappelle's special. The plans for a walkout were earlier reported by the Verge and confirmed by Netflix.

Read More ->

Deere Workers Go on Strike. They Want Higher Pay. -- Barrons.com

Deere workers represented by the United Auto Workers union went on strike after an agreement over wages and benefits couldn't be reached with the agricultural equipment giant.

The strike began around midnight Central time.

Read More ->

Australian Miner Places $2 Billion Copper Bet on Green Energy Transition

South32 Ltd. bet on copper being in hot demand in an accelerating global energy transition with an investment of up to $2.05 billion in a Chilean copper mine, as big miners pivot to metals needed for electric vehicles and renewable energy infrastructure.

The Australia-based mining company-which has assets in the U.S. and Brazil, among other places-on Thursday said it would buy a 45% stake in the Sierra Gorda copper mine in the Antofagasta region of northern Chile for an upfront cost of $1.55 billion and future sum of up to $500 million linked to production rates and metal prices. It agreed to purchase the stake from Japan's Sumitomo Metal Mining Co. Ltd. and Sumitomo Corp. The other 55% of the mine is owned by Poland's KGHM Polska Miedz SA.

Read More ->

TSMC Posts Record Quarterly Profit on Chip Demand

Taiwan Semiconductor Manufacturing Co.'s third-quarter net profit rose to a record, thanks to strong chip demand for electronics devices and data processing.

The world's largest contract chip maker said Thursday that net profit was 156.26 billion New Taiwan dollars (US$5.57 billion), up from NT$137.31 billion a year earlier. That beat the estimate of NT$149.42 billion from a poll of analysts by S&P Global Market Intelligence.

Read More ->

Gas Shortage Forces Power Plants to Switch to Oil, Boosting Demand

Soaring natural-gas and coal prices are forcing power-generation companies and manufacturers to switch to using oil, a move that could add half a million barrels a day to global demand, the International Energy Agency said Thursday.

In its monthly market report, the IEA increased its global oil-demand forecasts for this year and the next by 170,000 and 210,000 barrels a day, respectively, but added that the cumulative effect of the energy crisis could be as large as 500,000 barrels a day from September through next year's first quarter.

Read More ->

Tight Labor Market Keeping Jobless Claims in Check

Unemployment claims are holding near the lowest levels since early 2020, as employers cling to workers in a competitive labor market.

Economists surveyed by The Wall Street Journal estimate jobless claims fell to 318,000 last week from 326,000 a week earlier. Claims, a proxy for layoffs, remain near their lowest levels since the coronavirus pandemic's onset. Initial claims reached a pandemic low of 312,000 in the week ended Sept. 4.

Read More ->

U.S. SPAC Frenzy Inspires a Reboot in Asia

SPACs have lost some luster in America, but stock exchanges in Singapore and Hong Kong are betting the vehicles will boost their allure to global investors and startups in the region.

The two Asian financial hubs have been pushing forward with competing plans to enable listings of special-purpose acquisition companies, which raise money and go public before finding businesses to merge with. Singapore launched its SPAC rules in September, while Hong Kong is seeking public comment on its proposed regulations until the end of this month.

Read More ->

Fed Official Sees Risks of More Persistent Inflation

A Federal Reserve official warned in a speech Wednesday night of growing risks that supply-chain disruptions could keep inflation elevated for longer than forecasters have anticipated.

While monthly inflation readings should decline from high rates observed in the spring, "I still see a material risk that supply-related pricing pressures could last longer than expected," said Fed governor Michelle Bowman in remarks prepared for delivery at South Dakota State University in Brookings, S.D.

Read More ->

China's Factory-Gate Prices Rise at Record Pace

HONG KONG-Cost pressures on Chinese factories continued to accumulate last month as energy prices soared, dimming hope that global inflation would ease in the near term.

China's producer-price index, a gauge of factory-gate prices, rose by 10.7% in September from a year ago, accelerating from a 9.5% increase in August, and grew at the fastest pace in 25 years, according to the National Bureau of Statistics.

Read More ->

German Economy Forecast to Grow 2.4% in 2021 and 4.8% in 2022

A complete normalization of contact-intensive activities isn't expected in the short term in Germany and supply bottlenecks are hampering manufacturing for the time being, the country's leading economic-research institutes said in a joint report.

"The Corona pandemic still shapes the economic situation in Germany," according to the joint economic forecasts report by the Ifo Institute, DIW Berlin, IfW Kiel, IWH and RWI.

Read More ->

Singapore Central Bank Surprises With Policy Tightening

Singapore's central bank unexpectedly tightened its currency policy to cushion against inflationary pressures arising from strengthening global demand amid a global supply-chain crunch.

The Monetary Authority of Singapore said Thursday that it will "slightly" increase the slope of the Singapore dollar nominal effective exchange rate policy band from the current slope of zero.

Read More ->

U.S.-Canada Border's Full Opening in November Spurs Travel Plans

OTTAWA-Upon learning the U.S. intends to reopen land border crossings in early November to fully vaccinated travelers from Canada and Mexico, Emily Pearce started planning a visit to the nearest Target store, located in upstate New York.

The Ottawa resident said for months she has been eyeing a pair of wicker nightstands that the retailer sells. Target doesn't ship to Canada, and she can't find anything comparable in Canada at the same price point.

Read More ->

Biden Administration Seeks to Expand Wind Farms in Coastal Waters

WASHINGTON-The Biden administration is preparing to open up large sections of the U.S. coastline to wind-turbine projects as part of a plan to boost production of clean, renewable energy.

The U.S. is aiming by 2025 to lease up to seven tracts for wind farms in coastal waters between Maine and the Carolinas on the Atlantic Coast, off California and Oregon along the Pacific Coast and in the Gulf of Mexico, Interior Department Secretary Deb Haaland said.

Read More ->

WHO Creates New Team to Study Covid-19 Origins

The World Health Organization established a new panel of scientists whose mandate will include attempting to revive a stalled inquiry into the origins of the coronavirus that caused a global pandemic.

The 26-member team, drawn from countries including the U.S., China, India, Nigeria and Cambodia, is larger than a 10-member international group of scientists sent earlier this year to Wuhan, the Chinese city that was the site of the first confirmed Covid-19 outbreak in December 2019. The team will also have a broader mandate to lead investigations of future epidemics as well as Covid-19.

Read More ->

Rudy Giuliani Associate Lev Parnas Funneled Foreign Money Into U.S. Elections, Prosecutors Say

The criminal trial of former Rudy Giuliani associate Lev Parnas kicked off in a New York federal court Wednesday with prosecutors describing him as a Florida businessman who promoted his political connections while working to funnel foreign money into U.S. elections in 2018.

Mr. Parnas, who faces six counts of campaign-finance charges, is accused of conspiring with Andrey Kukushkin, a co-defendant in the case, to make more than $25,000 in political contributions in a calendar year with funds from Russian businessman Andrey Muraviev. Federal-election laws prohibit foreign nationals from making political contributions in U.S. elections. It is also illegal to make a political contribution in another person's name.

Read More ->

Write to paul.larkins@dowjones.com TODAY IN CANADA

Earnings:

None scheduled

Economic Indicators (ET):

0830 Aug Monthly Survey of Manufacturing

Expected Major Events for Thursday

04:30/JPN: Aug Revised Industrial Production

08:00/GER: Ifo Joint Economic Forecast of German economic research institutes

08:00/FRA: Oct IEA Oil Market Report

08:30/UK: 3Q Bank of England Credit Conditions Survey

08:30/UK: 3Q Bank of England's Bank Liabilities Survey

12:30/US: Sep PPI

12:30/US: 10/09 Unemployment Insurance Weekly Claims Report - Initial Claims

12:30/CAN: Aug Monthly Survey of Manufacturing

13:00/RUS: Weekly International Reserves

13:45/US: Bloomberg Consumer Comfort Index

14:30/US: 10/08 EIA Weekly Natural Gas Storage Report

15:00/US: 10/08 EIA Weekly Petroleum Status Report

20:30/US: Federal Discount Window Borrowings

20:30/US: Foreign Central Bank Holdings

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

Expected Earnings for Thursday

Alcoa Corp (AA) is expected to report $1.71 for 3Q.

Art's Way Manufacturing (ARTW) is expected to report for 3Q.

BancFirst Corp (BANF) is expected to report $1.22 for 3Q.

Bank Of South Carolina (BKSC) is expected to report for 3Q.

Bank of America Corp (BAC) is expected to report $0.71 for 3Q.

Barrick Gold Corp (ABX.T,GOLD) is expected to report for 3Q.

Brainstorm Cell Therapeutics Inc (BCLI) is expected to report $-0.20 for 3Q.

CCA Industries (CAWW) is expected to report for 3Q.

CCUR Holdings Inc (CCUR) is expected to report for 3Q.

Citigroup Inc (C) is expected to report $1.71 for 3Q.

Colabor Group (GCL.T) is expected to report for 3Q.

Colony Bankcorp (CBAN) is expected to report $0.30 for 3Q.

Commercial Metals Co (CMC) is expected to report $1.34 for 4Q.

Cryo-Cell International Inc (CCEL) is expected to report for 3Q.

Del Taco Restaurants Inc (TACO) is expected to report $0.10 for 3Q.

Domino's Pizza Inc (DPZ) is expected to report $3.10 for 3Q.

Duck Creek Technologies Inc (DCT) is expected to report for 4Q.

FRMO Corp (FRMO) is expected to report for 1Q.

Ferrellgas Partners LP (FGPR) is expected to report for 4Q.

Goodfellow (GDL.T) is expected to report for 3Q.

Intellipharmaceutics International Inc (IPCI,IPCI.T) is expected to report for 3Q.

J.W. Mays Inc (MAYS) is expected to report for 4Q.

Liquid Media Group Ltd (YVR) is expected to report for 3Q.

Marten Transport (MRTN) is expected to report $0.26 for 3Q.

Morgan Stanley (MS) is expected to report $1.65 for 3Q.

Omega Flex (OFLX) is expected to report for 3Q.

Progressive Corp (PGR) is expected to report.

Pure Bioscience (PURE) is expected to report for 4Q.

Rocky Mountain Chocolate Factory Inc (RMCF) is expected to report for 2Q.

Tanzanian Gold Corp (TNX.T,TRX) is expected to report for 4Q.

U.S. Bancorp (USB) is expected to report $1.15 for 3Q.

US Global Investors (GROW) is expected to report for 4Q.

United Security Bancshares (UBFO) is expected to report for 3Q.

UnitedHealth Group Inc (UNH) is expected to report $4.18 for 3Q.

Video Display Corp (VIDE) is expected to report for 2Q.

Walgreens Boots Alliance Inc (WBA) is expected to report $0.87 for 4Q.

Wells Fargo (WFC) is expected to report $1.00 for 3Q.

Powered by Kantar Media and Dow Jones.

ANALYST RATINGS ACTIONS

BellRing Brands Cut to Hold From Buy by Truist Securities

Columbia Banking System Raised to Buy From Neutral by DA Davidson

Constellation Brands Raised to Buy From Hold by HSBC

ContinentalRes Oklahoma Cut to Neutral From Buy by MKM Partners

CyrusOne Cut to Equal-Weight From Overweight by Wells Fargo

Freshpet Raised to Buy From Hold by Truist Securities

Graphic Packaging Raised to Outperform From Neutral by Baird

Midland States Bancorp Cut to Equal-Weight From Overweight by Stephens & Co.

Monster Beverage Cut to Hold From Buy by Jefferies

Neuronetics Cut to Neutral From Buy by BTIG

NiSource Raised to Buy From Neutral by Goldman Sachs

Plug Power Raised to Overweight From Equal-Weight by Morgan Stanley

ProPhase Labs Cut to Neutral From Buy by Dawson James

Sempra Energy Cut to Neutral From Buy by Goldman Sachs

Skyworks Cut to Neutral From Outperform by Baird

Umpqua Holdings Cut to Equal-Weight From Overweight by Stephens & Co.

Umpqua Holdings Cut to Hold From Buy by Truist Securities

Valvoline Raised to Buy From Neutral by Seaport Global

Wayfair Cut to Hold From Buy by Jefferies

WEX Raised to Buy From Neutral by B of A Securities

Xcel Energy Raised to Buy From Neutral by Goldman Sachs

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

(END) Dow Jones Newswires

October 14, 2021 05:53 ET (09:53 GMT)

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