MARKET WRAPS
Watch For:
Housing Starts for July; Industrial Production and Capacity
Utilization for July; Canada Housing Starts for July; Canada
Consumer Price Index for July; earnings from Walmart, Home
Depot
Opening Call:
Stock futures dipped on Tuesday ahead of results from major
retailers that could offer clues about consumer behavior during a
period of rampant inflation.
Investors are eyeing a week of key retail earnings, with Walmart
and Home Depot set to post results later Tuesday.
On Wednesday, the FOMC will publish the minutes from its policy
meeting in July, with the minutes closely read for signals on the
Fed's next move.
Tim Pagliara, chief investment officer at CapWealth, said a few
softer inflation readings "doesn't mean the Fed will slow or even
pause the pace of rate hikes, which is what the market is
expecting."
Pagliara said the recent market "melt-up" was "more akin to a
bear market rally and we remind investors that the dot-com bubble
saw four bear market rallies of 20% or more, with each one testing
new lows."
European stocks edged higher for a five-session winning streak,
while Asian shares finished mixed, with a tech selloff htting Hong
Kong's Hang Seng.
Stocks to Watch:
An economic slowdown is encroaching on Apple, which has
reportedly laid off 100 contract workers in charge of
recruiting.
Those made redundant--across several regions--were informed
Apple needed to make adjustments for its current business climate,
according to a Bloomberg report on Tuesday that cited sources close
to the company.
Not all of its contract workers were let go, and full-time
employees involved in recruiting are being retained, the report
said.
A representative for Apple didn't immediately respond to a
request for comment by MarketWatch.
Read more here.
Forex:
The dollar could rise further in the near-term, supported by the
energy shock, uncertainty over whether the PBOC will engineer
another mini-devaluation in the renminbi and improved U.S. economic
data, ING said.
The energy independence of the U.S. leaves the dollar relatively
insulated to rising energy prices, ING added.
Data on industrial production later Tuesday and retail sales on
Wednesday should ease recession fears, ING said. "106.95/107.00
looks like the near-term target for the DXY Dollar Index."
---
Sterling was little moved after the latest U.K. employment data
as investors look ahead to Wednesday's key inflation print.
"The employment reading indicates a robust jobs market and will
provide the Bank of England further reason to continue on its
current trajectory for a higher interest rate environment," Silicon
Valley Bank said.
The U.K. unemployment rate was little changed at 3.8% in the
three months to June while the number of people in employment
increased 160,000 over the quarter and average earnings excluding
bonuses rose 4.7% following 4.4% growth in the previous
quarter.
Bonds:
The prospect of a slowdown of economic activity makes UBS Asset
Management "rather cautious" in its positioning in government
bonds, considering selloffs as an entry opportunity.
"Risk assets have not yet priced in the extent of this economic
slowdown, " UBS AM said, staying underweight stocks and using
selloffs in bonds as an opportunity to increase exposure to
sovereign fixed income.
It sees balanced risks to developed-market sovereign yields
outside the U.S., and sees Treasurys remaining the world's
pre-eminent haven and top source of risk-free yield.
Energy:
Crude futures were more than 1.5% lower in Europe, extending
Monday's hefty losses, on the prospects of a revival of the Iran
nuclear deal and the subsequent resumption of Iranian oil
exports.
DNB Markets said that could see Iran increase production by 1
million barrels a day within 9 months from current levels of 2.5
million barrels.
Metals:
Metals prices edged lower in European trading hurt by a strong
dollar that spiked on Monday after China had cut rates to add some
stimulus to its lockdown-hit economy.
"The macro mood feels heavier this morning," Peak Trading
Research said, noting that the Chinese yuan, the number one
importer currency, had fallen after the PBOC rate cuts.
TODAY'S TOP HEADLINES
Activist Politan Capital Has 9% Stake in Masimo
An activist investor has a big stake in Masimo Corp. and plans
to push the medical-device company to take action to improve its
stock price following a poorly received acquisition, according to
people familiar with the matter.
Politan Capital Management LP, founded by veteran activist
Quentin Koffey, has a 9% stake in Masimo worth roughly $750
million, the people said. Politan's specific ideas couldn't be
learned.
Dan Loeb's Third Point Calls for Disney to Spin Off ESPN,
Refresh Board
Activist investor Dan Loeb's Third Point LLC has bought a new
stake in Walt Disney Co. and is calling on the media company to buy
the rest of Hulu, explore spinning off ESPN and refresh its
board.
Mr. Loeb on Monday said his firm, which liquidated a large
Disney stake earlier this year, has repurchased a "significant
stake" in the company and sent a letter to Disney Chief Executive
Bob Chapek urging the company to engage with Third Point on a
number of issues.
WWE Says Probe of Vince McMahon Is 'Substantially Complete'
An investigation by World Wrestling Entertainment Inc.'s board
of directors into allegations of sexual misconduct against former
chairman and chief executive Vince McMahon is "substantially
complete," the company said in a securities filing on Monday.
The internal investigation, announced in June, found roughly $20
million in expenses that should have been recorded in the company's
financial statements, including $14.6 million that Mr. McMahon
agreed to pay women to settle allegations of sexual misconduct from
2006 to 2022, according to people familiar with the deals. Earlier
this month, the company disclosed additional payments in 2007 and
2009 totaling $5 million that it said were unrelated to the
allegations of misconduct that led to the investigation.
There Is No Preset Path for Australian Rate Rises, RBA Says
SYDNEY-The Reserve Bank of Australia is staying flexible on the
size and pace of future interest-rate rises, underlining in the
minutes of its Aug. 2 board meeting the need to respond to a
shifting inflation outlook and labor data.
The minutes, published Tuesday, repeated the RBA's warning that
the path to reining in inflation while maintaining economic growth
is narrow.
UK Unemployment Rate Increased Modestly in Three Months to
June
The unemployment rate in the U.K. rose slightly in the three
months to June, although the country's labor market remained
tight.
The U.K.'s unemployment rate stood at 3.8% in the three months
through June, up from 3.7% in the preceding three-month period,
according to data from the Office for National Statistics published
Tuesday.
Explosions Hit Russian Ammunition Depot in Crimea
Russian authorities reported explosions at an ammunition depot
in Crimea on Tuesday morning, a week after blasts at a Russian air
base on the peninsula appeared to destroy several warplanes.
The new explosions took place at a temporary ammunition dump at
a former farm near the village of Maiske in northern Crimea, a
local official told Russia state news agency TASS. Local
authorities are evacuating Maiske.
Merrick Garland Weighed Search of Trump's Mar-a-Lago for
Weeks
WASHINGTON-Attorney General Merrick Garland deliberated for
weeks over whether to approve the application for a warrant to
search former President Donald Trump's Florida home, people
familiar with the matter said, a sign of his cautious approach that
will be tested over the coming months.
The decision had been the subject of weeks of meetings between
senior Justice Department and FBI officials, the people said. The
warrant allowed agents last Monday to seize classified information
and other presidential material from Mar-a-Lago.
Former Trump Organization Finance Chief Set to Plead Guilty
The Trump Organization's former finance chief is expected to
plead guilty later this week to criminal charges stemming from his
indictment on tax-fraud charges, according to people familiar with
the matter.
A court hearing is scheduled Thursday morning for longtime chief
financial officer Allen Weisselberg, records show. The guilty plea,
which is expected to carry a sentence of five months in jail, isn't
final, the people said. Mr. Weisselberg isn't expected to cooperate
with Manhattan prosecutors as part of the deal, according to the
people.
Record Numbers of Migrants Arrested at Southern Border, With Two
Million Annual Total in Sight
Record numbers of migrants are being arrested while crossing the
southern U.S. border with Mexico, a sustained surge of single men
and families from across Latin America either seeking asylum or
work, according to new figures Monday from U.S. Customs and Border
Protection.
Border Patrol agents have made about 1.82 million arrests at the
southern border so far in the government's fiscal year, which runs
from October to the end of September. The number beats the record
set last fiscal year, which was 1.66 million apprehensions in the
year ending September 2021.
Camden Diocese Insurers Granted Permission to Challenge
Bankruptcy Plan
A bankruptcy judge sided with insurers for the Diocese of
Camden, allowing them to make their case against the church's
reorganization plan to settle sexual-abuse claims at a trial in
October.
In a court ruling on Friday, Judge Jerrold Poslusny said it was
reasonable for insurers including Century Indemnity Co. and Lloyd's
of London to oppose the plan that they said would harm their rights
in future litigation over sex-abuse claims against the Catholic
diocese in southern New Jersey.
Write to paul.larkins@dowjones.com TODAY IN CANADA
Earnings:
Osisko Mining 2Q
Economic Indicators (ET):
0815 Jul Housing Starts
0830 Jun International transactions in securities
0830 Jul CPI
Stocks to Watch:
Anaergia 2Q Rev C$42.2M Vs. C$26.8M; Restated Annual Audited
Fincl Statements for Yr Ended Dec 2021; Restatements Result of
Previously Announced Discussions With Auditor KPMG Over Technical
Acct Standard; No Change to Previously Disclosed Guidance for
Fiscal 2022, 2023; Expects to Continue Growth Momentum, Improve
Performance in Rest of Yr
---
Automotive Prop REIT 2Q Net C$31.2M
---
Big Rock Brewery 2Q Loss/Shr C$0.09; 2Q Loss C$588,000; 2Q Rev
C$15.8M; 6-Mos Loss/Shr C$0.28 Vs. EPS C$0.05; 6-Mos Rev C$24.6M
Vs. C$24.3M; Sales Affected by Unfavorable Industry Trends,
Specifically in Value Beer Segment; Focusing on Continued Pdt
Innovation, Dev in Premium Category; Engaging in Group Purchasing
to Mitigate Inflationary Pressures; Co-packing Segment Continuing
to Grow as Total Percentage of Rev
---
Inovalis REIT 2Q EPS C$0.14; 2Q Rev C$6.88M
---
Trevali 2Q Loss/Shr C$0.63 Vs. EPS C$0.04; 2Q Rev C$52.0M Vs.
C$101.1M; Initiative to Refinance Debt Maturing in Sept Hasn't
Advanced Sufficiently; No Assurance That Strategic Review to
Solicit Proposals for Investment in Co, Potential Sale of All/Part
of Business Will Progress in Timely Manner; Expects to Miss
Prepayment on Revolving Credit Facility Due Aug 17; Still in Talks
Senior Lenders Over Anticipated Breach of Terms, Potential Default
of Facility
---
Tassal Agrees to A$1.1 Bln Takeover by Canada's Cooke
Tassal Group has agreed to be bought by Canada's Cooke in a
takeover that values the Australian salmon producer at about $772.4
million.
Tassal on Tuesday said that its board unanimously recommended
Cooke's all-cash offer of A$5.23 a share. Tassal previously
rebuffed a A$4.85 indicative proposal from Cooke, which had already
proposed A$4.67 a share and then A$4.80 a share.
The offer price assumes Tassal will not declare a final
dividend. Tassal plans a shareholder vote in November and expects
completion by the end of 2022.
Expected Major Events for Tuesday
04:30/JPN: Jun Tertiary Industry Index
06:00/UK: Jul UK monthly unemployment figures
09:00/GER: Aug ZEW Indicator of Economic Sentiment
12:15/CAN: Jul Housing Starts
12:30/CAN: Jun International transactions in securities
12:30/US: Jul New Residential Construction - Housing Starts and
Building Permits
12:30/CAN: Jul CPI
12:55/US: 08/13 Johnson Redbook Retail Sales Index
13:15/US: Jul Industrial Production & Capacity
Utilization
20:30/US: 08/12 API Weekly Statistical Bulletin
23:01/UK: Jul Scottish Retail Sales Monitor
23:50/JPN: Jun Orders Received for Machinery
23:50/JPN: Jul Provisional Trade Statistics for the Month
All times in GMT. Powered by Onclusive and Dow Jones.
Expected Earnings for Tuesday
Acer Therapeutics Inc (ACER) is expected to report $-0.88 for
2Q.
AgEagle Aerial Systems Inc (UAVS) is expected to report for
2Q.
Agilent Technologies (A) is expected to report $1.04 for 3Q.
Allena Pharmaceuticals Inc (ALNA) is expected to report $-0.48
for 2Q.
Archaea Energy Inc (LFG) is expected to report for 2Q.
Bio-Path Holdings Inc (BPTH) is expected to report for 2Q.
Cue Biopharma Inc (CUE) is expected to report $-0.47 for 2Q.
Empire Petroleum Corp (EP) is expected to report for 2Q.
FTI Consulting (FCN) is expected to report $1.74 for 4Q.
Flanigan's Enterprises Inc (BDL) is expected to report for
3Q.
GEE Group Inc (JOB) is expected to report $0.01 for 3Q.
Global-E Online Ltd (GLBE) is expected to report for 2Q.
Greenlane Holdings Inc (GNLN) is expected to report for 2Q.
Home Depot Inc (HD) is expected to report $4.96 for 2Q.
Interpace Biosciences Inc (IDXG) is expected to report for
2Q.
Jack Henry & Associates Inc (JKHY) is expected to report
$1.00 for 4Q.
Janus International Group Inc (JBI) is expected to report for
2Q.
Lulu's Fashion Lounge Holdings Inc (LVLU) is expected to report
for 2Q.
Lumentum Holdings Inc (LITE) is expected to report for 4Q.
MGT Capital Investments (MGTI) is expected to report for 2Q.
Melco Resorts & Entertainment Ltd (MLCO) is expected to
report $-0.41 for 2Q.
NexImmune Inc (NEXI) is expected to report for 2Q.
Orgenesis Inc (ORGS) is expected to report $-0.02 for 2Q.
P3 Health Partners Inc (PIII) is expected to report for 1Q.
PAVmed Inc (PAVM) is expected to report $-0.23 for 2Q.
Premier Inc (PINC) is expected to report $0.47 for 4Q.
QuickLogic Corp (QUIK) is expected to report for 2Q.
SPAR Group Inc (SGRP) is expected to report for 2Q.
Simply Inc (SIMPQ) is expected to report for 1Q.
StageZero Life Sciences Ltd (SZLS.T) is expected to report for
2Q.
Tofutti Brands (TOFB) is expected to report for 2Q.
Vidler Water Resources Inc (VWTR) is expected to report for
2Q.
Walmart Inc (WMT) is expected to report $1.82 for 2Q.
Yunhong CTI Ltd (CTIB) is expected to report for 2Q.
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ANALYST RATINGS ACTIONS
1Life Healthcare Cut to Hold From Buy by Jefferies
Air Products & Chemicals Raised to Outperform From Market
Perform by BMO Capital
American Equity Cut to In-Line From Outperform by Evercore ISI
Group
Avalara Cut to Market Perform From Outperform by Raymond
James
Charter Communications Cut to Neutral From Overweight by
Atlantic Equities
CME Group Cut to Market Perform From Outperform by Raymond
James
Comcast Cut to Neutral From Overweight by Atlantic Equities
Cullen/Frost Bankers Raised to Buy From Neutral by Compass
Point
Dollar General Cut to Market Perform From Outperform by BMO
Capital
Equifax Cut to Neutral From Overweight by Atlantic Equities
Franklin Electric Cut to Neutral From Buy by Northcoast
Research
Green Dot Cut to Equal-Weight From Overweight by Barclays
Home Point Capital Cut to Neutral From Outperform by Wedbush
IDEAYA Biosciences Cut to Hold From Buy by Stifel
Illinois Tool Works Cut to Sell From Hold by Deutsche Bank
Kinsale Capital Group Cut to Neutral From Buy by Compass
Point
Kiora Pharmaceuticals Cut to Hold From Buy by Maxim Group
Lindsay Cut to Neutral From Buy by Northcoast Research
McDonald's Raised to Buy From Neutral by Kalinowski Research
Plains All American Raised to Buy From Hold by Stifel
Plains GP Holdings Raised to Buy From Hold by Stifel
PLx Pharma Cut to Market Perform From Market Outperform by JMP
Securities
PLx Pharma Cut to Perform From Outperform by Oppenheimer
Poshmark Raised to Overweight From Equal-Weight by Barclays
PPL Corp Raised to Buy From Neutral by B of A Securities
Press Release: Nearly 60% of Renters saw Rent Increase in Past
12 Months
Quanterix Cut to Hold From Buy by Canaccord Genuity
RCM Tech Raised to Buy From Neutral by B. Riley Securities
Revolve Group Cut to Underweight From Equal-Weight by
Barclays
Ryerson Holding Coverage Assumed by BMO Capital at
Outperform
Shift Technologies Cut to Underweight From Neutral by JP
Morgan
Southwest Airlines Cut to Hold From Buy by Argus Research
TaskUs Cut to Equal-Weight From Overweight by Morgan Stanley
Truist Financial Cut to Neutral From Buy by Compass Point
Vroom Cut to Underweight From Neutral by JP Morgan
This article is a text version of a Wall Street Journal
newsletter published earlier today.
(END) Dow Jones Newswires
August 16, 2022 05:06 ET (09:06 GMT)
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