MARKET WRAPS

Watch For:

Retail Sales for August; PPI for August; Weekly Jobless Claims; Canada Wholesale Trade for July; Earnings from Adobe

Today's Top Headlines/Must Reads:

- Betting Inflation Will Keep Falling Is Still a Risky Business

- Fuel Prices Are Soaring. Who Is Feeling the Pinch?

- UAW, Automakers Remain 'Far Apart' in Contract Talks, Union President Says

Follow WSJ market coverage here

Opening Call:

Stock futures were firmer as bond yields steadied and traders eyed retail sales data and opening action for the ARM IPO.

"After much anticipation, markets mostly took the CPI release in their stride yesterday, with bonds and equities fairly steady after the release, before a bond rally eventually took hold," Deutsche Bank said.

Markets are pricing in little chance of the Federal Reserve hiking borrowing costs after its meeting next week and remain undecided about any 25 basis point hike in November.

Those expectations may shift depending on producer prices and retail sales data.

Investors will also be keeping an eye on the opening trading of ARM. It is felt that a well-received ARM listing may help revive the IPO market and boost bullish sentiment more broadly.

"Given the eagerness from investors , it seems ARM could have pushed for an even higher price, but is playing it safe to try to ensure a surge in the share price once trading gets underway," Hargreaves Lansdown said.

Another possible catalyst Thursday is the policy decision by the European Central Bank. ECB decisions may not normally impact U.S. trading in a big way, but then it's unusual to go into a major central bank meeting without the market having a firm view of what will happen.

Read ECB May Hike Rates Again Thursday. But It's a Close Call.

Premarket Movers

Ahead of ARM's debut, shares of fellow chip makers traded higher. Nvidia rose 0.8%, U.S.-listed shares of Taiwan Semiconductor Manufacturing gained 0.9%, Intel was up 0.2%, and Qualcomm rose 0.4%.

Caesars Entertainment shares were volatile after reports that it had suffered a cyberattack and paid a ransom to hackers. The stock rose 1.5%, recouping about half of Wednesday's losses.

Ford was up 0.1% and General Motors rose 0.2% ahead of a deadline late Thursday for a strike by the United Auto Workers union.

HP was down 1.2% after Berkshire Hathaway disclosed it sold 5.5 million shares of the company.

Semtech said it expects a third-quarter loss when analysts forecast a profit. The company also guided for third-quarter sales below analysts' estimates as inflation and export restrictions pressure results. Shares fell 3.9%.

Yum China laid out plans to boost dividends and buybacks, as it updated investors on its goals through 2026. The stock rose more than 3%.

Wednesday's Post-Close Movers

Harpoon Therapeutics said Wednesday that AbbVie would not exercise an exclusive license option on its HPN217 treatment. Shares fell 7.3%.

Ibex's revenue rose 0.7%, to $124.4 million, in the fiscal fourth quarter, missing analysts' forecasts as weaker macroeconomic conditions weighed on results. The company's adjusted earnings per share also missed estimates. Shares dropped 17%.

Forex:

The inflation data, which showed headline annual CPI rose slightly more than expected to 3.7%, had only a limited impact on the dollar, which now trades slightly lower, MUFG said.

"Market participants are assuming that the Fed will put more weight on the slowing trend for core inflation when setting policy and continue to look through upside risks to headline inflation for rising energy prices."

The euro was firmer in early European trading, but it could come under pressure as traders await the outcome of the ECB meeting, DHF Capital said.

"While the ECB is facing elevated inflation, the deteriorating economic conditions in the euro area could affect its interest rate decision, creating some doubts over whether it would raise rates or keep them unchanged."

In addition, the weaker outlook for European economies, with Germany's expected to shrink this year, could continue to weigh on the euro's performance, it said.

Read Euro Movements Will Depend on ECB Decision, Rate Pause Would Disappoint

Read Sell Sterling, Buy Euro, BlackRock Says

Energy:

Oil prices rose in Europe, with Brent setting a fresh 10-month high as investors anticipated a supply shortfall throughout the rest of the year.

Brent has now risen in 11 of the last 15 trading sessions as Saudi Arabia's oil supply cuts bite, cuts that Riyadh has said it will continue until the end of the year.

OPEC and the IEA both issued reports this week which foresaw a sharp deficit forming towards the end of the year if cuts remain in place.

Metals:

Base metals prices were mixed, while gold edged lower in early London trade, as a strong dollar and the possibility of more Fed rate hikes added pressure on dollar-backed commodities.

All eyes will be on the ECB's decision on interest rates later, Peak Trading Research said.

"The euro comprises 58% of the dollar index, so today's ECB policy decision and the currency impact on our commodity markets could be significant."

Read Uranium Price Expected to Head Higher Into 2024

Read Uranium Miners May Be Slow to Respond to Shortfall

Read Metallurgical Coal Gets Boost From Supply Snags

TODAY'S TOP HEADLINES

Arm Sets IPO Price at $51 a Share

Arm set a price of $51 a share as the British chip designer lays the groundwork for the biggest U.S. public offering of the year.

The price was decided on after meetings Wednesday afternoon between underwriters and company executives, according to people familiar with the matter. Initially, the company was eyeing a price of $52 a share, but later settled on $51.

VinFast's Rise and Fall Burns Investors in Familiar SPAC Pattern

A crash in the shares of electric-car startup VinFast Auto is serving as a warning: One of Wall Street's hottest financial trends in recent years often ends with everyday investors getting burned.

The Vietnamese firm last month became one of the latest startups to go public by merging with a shell company, an alternative route to the stock market that became popular during the pandemic. The eye-popping swings in its shares that followed mirror the volatility that has been common among startups that went public the same way and reflect the quirks of how such deals often work.

Inside Exxon's Strategy to Downplay Climate Change

Exxon Mobil issued its first public statement that burning fossil fuels contributes to climate change in 2006, following years of denial. In public forums, the company argued that the risk of serious impact on the environment justified global action.

Yet behind closed doors, Exxon took a very different tack: Its executives strategized over how to diminish concerns about warming temperatures, and they sought to muddle scientific findings that might hurt its oil-and-gas business, according to internal Exxon documents reviewed by The Wall Street Journal and interviews with former executives.

For stocks this was 'the worst part' of inflation report, says First Trust

Major U.S. stock benchmarks remained down for the month on Wednesday, after a choppy trading session ended with mixed results as investors weighed the latest inflation report.

"The Federal Reserve may have gained some traction against inflation, but the inflation problem is far from finished," said First Trust economists in a note Wednesday. "The worst part of today's report was that real average hourly earnings declined 0.5% in August, taking a large bite out of consumer spending power."

U.S. to Shift Millions in Military Aid From Egypt to Taiwan

WASHINGTON-The U.S. plans to redirect some of its foreign military financing allocated for Egypt to Taiwan over what it says is Egypt's failure to make progress on human rights and other issues, according to U.S. officials.

The Biden administration has notified Congress that it would withhold $85 million in aid conditioned on the release of political prisoners, officials said, and some lawmakers are pushing to withhold another $235 million in conditional assistance that goes to Egypt, amid growing calls by Democrats to penalize Cairo for its human-rights record.

U.S. Resumes Counterterrorism Drone Operations From Niger

The U.S. has quietly resumed flying drones for its Niger counterterrorism mission, which was suspended following the military coup in July, a U.S. Air Force commander said Wednesday.

The military coup in Niger had spurred fears that the U.S. strategy for taking on Islamic militants in the region had been upended.

Judge Rejects DACA Immigration Program Again

A federal judge in Texas has once more ruled that the Obama-era program protecting young immigrants known as Dreamers is illegal, the latest in a long-running legal battle that could return to the Supreme Court.

The program, known as Deferred Action for Childhood Arrivals, or DACA, will remain in effect while the decision is appealed, and existing beneficiaries can continue to renew their participation in the program, which provides work permits and protections against deportation. As was the case before Wednesday's decision, new applicants can't be admitted to the program.

Write to ina.kreutz@wsj.com

TODAY IN CANADA

Earnings:

Blackline Safety 3Q

Empire Co. 1Q

Transat A.T. 3Q

Economic Calendar (ET):

0830 Sep Model-based Principal Field Crop Estimates

0830 Jul Wholesale trade

Stocks to Watch:

Haivision Systems 3Q Loss/Shr C$0.03; 3Q Rev C$35M

---

Slate Asset Management L.P. and Slate Management ULC Increase Ownership Position in Slate Office REIT to Over 10%

Expected Major Events for Thursday

04:30/JPN: Jul Revised Industrial Production

10:00/FRA: 2Q OECD Quarterly National Accounts G20 GDP growth

12:30/US: Aug PPI

12:30/CAN: Sep September Model-based Principal Field Crop Estimates

12:30/US: Aug Advance Monthly Sales for Retail & Food Services

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

12:30/US: U.S. Weekly Export Sales

12:30/CAN: Jul Wholesale trade

13:00/RUS: Weekly International Reserves

14:00/US: Jul Manufacturing & Trade: Inventories & Sales

14:30/US: 09/08 EIA Weekly Natural Gas Storage Report

20:30/US: Foreign Central Bank Holdings

20:30/US: Federal Discount Window Borrowings

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

Expected Earnings for Thursday

Adobe Inc (ADBE) is expected to report $2.87 for 3Q.

Amerityre Corp (AMTY) is expected to report for 4Q.

Capstone Green Energy Corp (CGRN) is expected to report for 1Q.

Charles & Colvard Ltd (CTHR) is expected to report for 4Q.

Clearday Inc (CLRD) is expected to report for 2Q.

Copart Inc (CPRT) is expected to report $0.33 for 4Q.

Empire Co (EMLAF,EMP.A.T) is expected to report $0.79 for 1Q.

Frequency Electronics (FEIM) is expected to report for 1Q.

Lennar Corp - A Share (LEN,LENB) is expected to report $3.53 for 3Q.

Lightpath Technologies Inc - Class A (LPTH) is expected to report $-0.01 for 4Q.

MEI Pharma Inc (MEIP) is expected to report for 4Q.

Mitek Systems Inc (MITK) is expected to report $0.00 for 2Q.

RF Industries (RFIL) is expected to report $-0.01 for 3Q.

RegenETP Inc (RGTPQ) is expected to report for 2Q.

RegeneRX Biopharmaceuticals Inc (RGRX) is expected to report for 2Q.

Renovaro Biosciences Inc (RENB) is expected to report for 4Q.

Transat AT (TRZ.T) is expected to report $0.79 for 3Q.

Vinco Ventures Inc (BBIG) is expected to report for 2Q.

eGain (EGAN) is expected to report $0.01 for 4Q.

Powered by Kantar Media and Dow Jones.

ANALYST RATINGS ACTIONS

2seventy bio Cut to Neutral From Buy by Goldman Sachs

2seventy bio Cut to Neutral From Buy by Guggenheim

Acelyrin Cut to Equal-Weight From Overweight by Morgan Stanley

Ball Corp Cut to Neutral From Outperform by Credit Suisse

Blue Water Vaccines Cut to Hold From Buy by Maxim Group

General Motors Raised to Buy From Neutral by UBS

Hostess Brands Cut to In-Line From Outperform by Evercore ISI Group

Immunogen Raised to Overweight From Neutral by JP Morgan

O-I Glass Cut to Neutral From Outperform by Credit Suisse

Oracle Cut to Neutral From Overweight by JP Morgan

Sealed Air Raised to Outperform From Neutral by Credit Suisse

Sight Sciences Cut to Underperform From Neutral by B of A Securities

Southern Co Raised to Neutral From Underperform by B of A Securities

UMB Financial Raised to Overweight From Neutral by Piper Sandler

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

(END) Dow Jones Newswires

September 14, 2023 06:17 ET (10:17 GMT)

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