MARKET WRAPS
Watch For:
Personal Income & Spending; Durable Goods; University of
Michigan Final Consumer Survey; New Home Sales; Canada GDP
Today's Headlines/Must Reads
- A 'Recipe for Disaster': Insiders Warned Meta's Privacy Push
Would Shield Child Predators
- Whether in 2000 or 2024, There's No Upside for Supreme Court
in Deciding Elections
- This Stat Could Transform How You View Economic Growth
Opening Call:
Stock futures drifted lower, with Nike shares down more than 10%
premarket after it cut its revenue outlook.
One last batch of inflation data will test markets before
Christmas.
A readout on price pressures, personal spending and incomes is
due at 8:30 a.m. ET. Economists expect the report to affirm that
inflation retreated last month, even as consumer spending rose.
The PCE data, which includes the Federal Reserve's preferred
measure of inflation, could bolster investor hopes that the Fed can
guide the economy to a soft landing.
Overseas
New curbs on gaming hammered Chinese tech stocks . Stock in
industry heavyweight Tencent, one of the companies hit by the
restrictions, crashed 12%, helping pull Hong Kong's Hang Seng Index
down 1.7%. European stocks were muted, with the Stoxx Europe 600
little changed.
Stocks to Watch
Nike reported fiscal second-quarter earnings that beat analysts'
expectations but announced a $2 billion cost-cutting plan over the
next three years as it expects sales to soften in the second half
of fiscal 2024. Its shares dropped 11%, with shares of Dick's
Sporting Goods and Foot Locker down 4.3% and 6.3%,
respectively.
Berkshire Hathaway purchased 5.2 million shares of Occidental
Petroleum in recent days, bringing its total ownership in the
company to 243.7 million shares, or a 27.7% stake, according to a
filing with the SEC. Occidental shares rose 0.9%.
Rocket Lab was up 14% after it said it received a contract from
a U.S. government customer worth $515 million to "design,
manufacture, deliver, and operate 18 space vehicles. "
Tesla was down 0.4% in premarket trading after RBC Capital
reduced its delivery estimates for the electric-vehicle maker in
the fourth quarter to 456,000 from 476,000, citing registration
data and app downloads.
Bonds:
Reacceleration of inflation and elections in a number of
countries, including the U.S., are among the risks that
fixed-income markets could face next year , J.P. Morgan Asset
Management said.
It added that market pricing interest-rate cuts for March looks
premature, nonetheless, investors should consider phases of
weakness as a buying opportunity.
Energy:
Oil prices rose, supported by growing fears over trade
disruptions due to the situation in the Red Sea and despite a
buildup in U.S. oil inventories and rising output.
Metals:
Metals were higher on concerns over supply constraints and a
broadly improved market sentiment.
Sucden Financial said seasonal activity is expected to pick up
in the new year for copper and support prices above the $8,600 a
metric ton level.
Meantime, gold made solid gains on a weaker dollar, weighed by
the prospect of Fed interest-rate cuts early next year.
TODAY'S TOP HEADLINES
China's Sportswear Giants Take a $25 Billion Tumble
China's biggest sports brands rode a wave of nationalistic
fervor for years, winning over consumers and investors while their
Western rivals faltered in the country.
The homegrown giants are now stumbling. They overestimated
demand for their footwear and apparel and got caught flat-footed by
a broader slowdown in consumer spending.
White House Says $14.1 Billion U.S. Steel Sale Deserves 'Serious
Scrutiny'
The Biden administration's top economic adviser said Thursday
the $14.1 billion deal to acquire U.S. Steel by Japan's Nippon
Steel deserved "serious scrutiny" regarding its potential impact on
national security and supply chains.
"This looks like the type of transaction that the interagency
committee on foreign investment Congress empowered and the Biden
administration strengthened is set up to carefully investigate,"
said National Economic Adviser Lael Brainard in a statement,
referring to Cfius, which reviews certain transactions involving
foreign investment in the U.S. "This Administration will be ready
to look carefully at the findings of any such investigation and to
act if appropriate."
Nike Sends Warning About Slowing Consumer Spending
Nike cut its revenue outlook for the year amid concerns that
consumers around the world are becoming more cautious with their
spending.
The sneaker and apparel company on Thursday said it anticipates
softer sales for the second half of the year. It also plans to
shave up to $2 billion in costs over the next three years through
streamlining the organization and shedding employees, among other
moves. Shares plunged nearly 11% in after-hours trading.
What to Watch in Friday's Spending Report: Inflation Closing In
on Fed's Target
Inflation retreated further in November and consumers picked up
their spending as moods improved, forecasters said, adding to signs
that price pressures can be contained without a recession.
Inflation Outlook Is Clouded by Shipping. Disruptions Hit
Everyone From Ikea to BP.
Just as inflation rates appeared to be reliably retreating, a
new shock has been increasing uncertainty.
The attacks on container-carrying vessels in the Red Sea and
drought in the Panama Canal have cut off two of the world's most
important arteries for trade. Ocean freight rates are surging,
putting pressure on companies that rely on cheap shipping.
U.K. Economy Shrank in 3Q, as Recession Signals Loom
The U.K.'s economy contracted in the third quarter with a
downward revision to the previous quarter indicating that the
country could be stuck in a period of subdued economic
performance.
U.K. gross domestic product declined 0.1% on quarter in the
July-to-September period, according to data from the Office for
National Statistics released Friday, lower than the prior figure of
flat growth in preliminary data published in November.
The Newest Get Rich Quick Trade: Indian Stocks
India's booming stock market is attracting millions of
individual investors hoping to get rich quick.
The benchmark S&P BSE Sensex Index is around 16% higher this
year and hit an all-time high this month. The surge encouraged
investors to open more than 11 million new accounts with the
National Stock Exchange of India in 2023 through the end of August,
and has led to record flows into mutual funds that buy stocks. The
most popular play: subscribing for shares in new listings, which
sometimes surge in value during the first few days of trading.
Emerging Markets Struggled in 2023. Here's Why Next Year May Be
Better.
Emerging markets will get a much-needed catalyst for improvement
in 2024: central banks around the world pivoting to lower interest
rates.
For this year, the MSCI Emerging Markets index is on pace for
another trouncing by the S&P 500 index-returning 5% to date,
compared with a 26% gain for the S&P. China's sputtering
economic recovery and investor apprehension about the country's
prospects were a major drag.
Bitcoin Rose on Rumors in 2023. How to Predict What Comes
Next.
Bitcoin may be a relatively new technology. It can still follow
some pretty old market maxims.
In 2024, FASB to Nudge Forward Projects on Software,
Compensation and Green Credits
The Financial Accounting Standards Board has a busy year ahead
of it. It will be advancing projects in three tentpole
areas-accounting for software costs and environmental credits and
greater disclosure of income-statement expenses-aimed at providing
investors with new financial insight, Chairman Rich Jones said in
an interview.
New rules, which can take years to come to fruition, can also
saddle companies with a greater compliance burden. But in outlining
his 2024 agenda, Jones said the accounting standard-setter for U.S.
companies and nonprofits will again be asking investors and other
stakeholders which issues to take up next.
New North Korean Nuclear Reactor Likely Running, U.N. Says
North Korea appears to be operating a more powerful reactor for
producing plutonium at its main nuclear site for the first time,
the United Nations atomic agency said late Thursday, days after
Pyongyang tested an intercontinental ballistic missile that could
reach across the U.S.
International Atomic Energy Agency Director General Rafael
Grossi said that a light water reactor at North Korea's Yongbyon
nuclear facility was discharging warm water, indicating it was
reaching criticality, the point at which its nuclear chain reaction
becomes self-sustaining. The regime has been building the reactor
for years.
Japan to Send U.S. Patriot Missiles, Creating Deeper Pool for
Ukraine Air Defenses
TOKYO-Japan said Friday it would provide Patriot missiles to the
U.S., bolstering global stocks as Ukraine defends itself from a new
wave of Russian missile attacks.
Tokyo is set to transfer dozens of the interceptor missiles,
which are used to shoot down ballistic missiles and other aerial
threats, from its own supplies, starting as early as the first
quarter of 2024, according to a U.S. official.
Write to paul.larkins@dowjones.com TODAY IN CANADA
Earnings:
None Scheduled
Economic Calendar [ET]:
0830 Oct GDP
Stocks to Watch:
EnCore Energy CFO Mierkey Has Resigned, Effective Dec 23; Dennis
Stover to Act as Interim CFO Until New CFO Found; Stover Is a
Director, Was a Former CEO; Search Committee Well Advanced in
Efforts to Select New CFO
Gold Fields to Acquire Additional Shares of Galiano Gold Upon
Disposal of Interest in Asanko Gold Mine
Royal Bank of Canada Receives Approval To Proceed With
Acquisition Of HSBC Canada
Expected Major Events for Friday
00:01/UK: Nov Zoopla House Price Index
00:01/UK: Dec CBI Growth Indicator and Service Sector Survey
00:01/UK: Nov UK monthly automotive manufacturing figures
05:00/JPN: Nov Supermarket sales
07:00/UK: Nov UK monthly retail sales figures
07:00/UK: 3Q Balance of Payments
07:00/UK: 3Q Business investment revised results
07:00/UK: 3Q UK quarterly national accounts
07:00/GER: Nov Foreign trade price indices
07:45/FRA: Nov PPI
07:45/FRA: Dec Consumer confidence survey
08:59/JPN: Oct Final Labour Survey - Earnings, Employment &
Hours Worked
09:00/ITA: Dec Consumer Confidence Survey
09:00/ITA: Dec Business Confidence Survey
10:00/ITA: Nov Foreign Trade non-EU
11:00/ITA: Oct Industrial turnover
13:30/US: Nov Personal Income and Outlays
13:30/CAN: Oct GDP
13:30/US: Nov Advance Report on Durable Goods
15:00/US: Nov State Employment and Unemployment
15:00/US: 3Q State Quarterly Personal Income
15:00/US: Dec University of Michigan Survey of Consumers -
final
15:00/US: Nov New Residential Sales
15:00/US: 3Q GDP by State
All times in GMT. Powered by Kantar Media and Dow Jones.
Expected Earnings for Friday
Clearday Inc (CLRD) is expected to report for 3Q.
Forward Industries (FORD) is expected to report for 4Q.
SIFCO Industries (SIF) is expected to report for 4Q.
Value Line (VALU) is expected to report for 2Q.
Vyant Bio Inc (VYNT) is expected to report for 3Q.
Powered by Kantar Media and Dow Jones.
ANALYST RATINGS ACTIONS
Amgen Raised to Buy From Neutral by Daiwa Capital
Annexon Raised to Buy From Neutral by B of A Securities
Cava Group Raised to Outperform From Neutral by Wedbush
Cheesecake Factory Raised to Outperform From Neutral by
Wedbush
Chipotle Mexican Cut to Neutral From Outperform by Wedbush
Eli Lilly Cut to Outperform From Buy by Daiwa Capital
Extra Space Storage Raised to Equal-Weight From Underweight by
Morgan Stanley
Glaukos Raised to Overweight From Neutral by JP Morgan
Highwoods Properties Cut to Underweight From Equal-Weight by
Morgan Stanley
Insulet Raised to Outperform From Neutral by Baird
JFrog Raised to Overweight From Equal-Weight by Morgan
Stanley
Merit Medical Raised to Buy From Hold by Canaccord Genuity
Nevro Cut to Hold From Buy by Canaccord Genuity
POINT Biopharma Global Cut to Hold From Buy by Brookline
Capital
Regency Centers Raised to Overweight From Equal-Weight by Morgan
Stanley
Salesforce Raised to Overweight From Equal-Weight by Morgan
Stanley
Simon Property Cut to Equal-Weight From Overweight by Morgan
Stanley
Urban Edge Properties Raised to Equal-Weight From Underweight by
Morgan Stanley
Wendy's Cut to Neutral From Outperform by Wedbush
This article is a text version of a Wall Street Journal
newsletter published earlier today.
(END) Dow Jones Newswires
December 22, 2023 06:14 ET (11:14 GMT)
Copyright (c) 2023 Dow Jones & Company, Inc.
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