UKX FTSE 100 Index

MARKET WRAPS

Watch For:

Weekly Jobless Claims; ADP National Employment Report for December; EIA Weekly Petroleum Status Report; Earnings from Walgreens Boots Alliance, Conagra, Lamb Weston

Today's Top Headlines/Must Reads:

- Stocks' Bad Start to 2024 Has Forecasters on Edge

- The Hidden Force Pushing Mortgage Rates Down

- Why Companies Still Aren't in a Firing Mood

Opening Call:

Stock futures nudged higher on Thursday, as Wall Street looked to stabilize after a poor start to the year.

Equity bulls will be hoping that data continues to show economic activity slowing to the extent that it helps the Federal Reserve achieve its 2% inflation target, but not by so much that it indicates a contraction that would badly hit corporate earnings.

To that end investors will keep a close eye on the December nonfarm payrolls report, released Friday, hoping it shows steady jobs growth with benign wage pressures.

Premarket Movers

Dyne Therapeutics commenced an underwritten public offering of $175 million of shares of its common stock. The stock fell 6% premarket.

Intel named Justin Hotard as executive vice president and general manager of its data-center and AI group, effective Feb. 1. Shares rose 0.6%.

Meta CEO Mark Zuckerberg sold about $428 million of company stock over the final two months of 2023, according to a regulatory filing. Shares were rising 0.4%.

MongoDB was downgraded to Neutral from Buy at UBS and the price target was lowered to $410 from $475, the Fly reported. Shares were falling 1.3%.

Tesla shares edged higher premarket after Wednesday's 4% selloff. The stock came under pressure after releasing deliveries numbers on Tuesday that showed its quarterly sales falling behind China's BYD.

Wednesday's Post-Close Movers

Cal-Maine Foods' profit fell sharply in the fiscal second quarter as egg prices dropped from their heights a year ago. Shares fall 6.5% in after-market trading.

Collegium Pharmaceutical guided for higher revenue and adjusted earnings in the next fiscal year. Shares rise 2% in after-market trading.

Forex:

The euro was firmer as the dollar turned lower, but difficult economic conditions in the eurozone might constrain its progress, CPT Markets said.

The European Central Bank could face mounting pressure to reduce interest rates if economic indicators continue to deteriorate, weakening the euro, CPT said.

Money markets price in 160 basis points of ECB rate cuts throughout the year, according to Refinitiv data.

German inflation data on Thursday could impact the euro, while eurozone inflation figures on Friday will be key for highlighting the path of inflation, CPT added.

Commerzbank said the dollar has risen at the start of 2024, recovering some of its recent losses but without any apparent trigger, and its gains could be curtailed without strong economic data.

Friday's non-farm payrolls data for December will be key, where Commerzbank sees a risk of a weaker figure, while Thursday's ADP private payrolls could also "surprise to the downside."

Morgan Stanley has turned neutral on the outlook for the USD. The bank said its prior conviction about the currency's ongoing strength has waned meaningfully.

Investors appear to be adopting the mentality that a peak in Fed hawkishness will be enough to overwhelm USD positives such as potential upside surprises to U.S. growth, downside growth surprises abroad, or an uptick in U.S. inflation, the bank said.

USD strength is harder to envision as U.S. interest rates have fallen further compared with peers, it added.

Energy:

Oil prices rose around 1% on mounting concerns over global supply as tensions in the Middle East continued to grow.

Explosions at a ceremony in Iran to commemorate the death of military commander Qassem Soleimani added to tensions in the region amid shipping disruptions in the Red Sea and the killing of a senior Hamas leader in Lebanon.

Meanwhile, the shutdown of Libya's largest oilfield due to local protests fuelled market concerns over tight supply.

Metals:

Base metals were mixed while gold edged higher as traders waited for Friday's nonfarm payroll report to gauge which way Fed policy will move this year.

"Investors are questioning if the Fed will cut interest rates six times in 2024 if the economy is heading for a soft landing, i.e., maybe five cuts is more realistic," Peak Trading Research said.

"This slightly hawkish shift in Fed expectations has supported the dollar this week, a bearish headwind for our dollar-denominated commodity markets," Peak added.

Wilson Asset Management Leaders said too much lithium supply may be cause for concern.

"We did buy into the lithium space," it said, but added that the fund has been selling some of its lithium stock holdings.

"There's a huge amount of supply out there," it said, adding that WAM Leaders is a "little bit cautious on lithium."

Iron-ore prices are now likely to average $150/ton over the next three months, Citi said, representing an upgrade on its previous forecast of $140/ton.

China is likely to step up targeted support for specific areas of the real-estate sector, which would be supportive of steel and iron ore demand, Citi added.

TODAY'S TOP HEADLINES

Google Is Finally Killing Cookies. Advertisers Still Aren't Ready.

Google is going forward with sweeping changes to how companies track users online-moves that have been years in the making. Advertisers still aren't ready.

The changes, among the biggest in the history of the $600 billion-a-year online ad industry, center on the use of cookies, technology that logs the activity of internet users across websites so that advertisers can target them with relevant ads.

Fisker Ditches Tesla-Style Direct-Sales Model in Favor of Dealerships

The electric-vehicle startup Fisker is abandoning a direct-to-consumer sales model in the U.S. in favor of using traditional dealerships, after it found the approach too expensive and struggled in 2023 to get its cars to buyers quickly.

The company is in talks with U.S. dealers and hopes to sign up at least 50 this year, said Chief Executive Officer Henrik Fisker.

Jeff Bezos Bets on a Google Challenger Using AI to Try to Upend Internet Search

Perplexity, a startup going after Google's dominant position in web search, has won backing from Jeff Bezos and venture capitalists betting that artificial intelligence will upend the way people find information online.

Started less than two years ago, Perplexity has fewer than 40 employees and is based out of a San Francisco co-working space. The company's product, which it calls an answer engine, is used by about 10 million people monthly.

What the 2024 Tax Brackets Mean for Your Money

Your tax bill is largely determined by tax brackets. These are really just ranges of taxable income. As your taxable income moves up this ladder, each layer gets taxed at progressively higher rates.

Cyber Leaders With Tight Budgets Still Must Secure AI, Cloud

Corporate cybersecurity leaders are looking for ways to spend less in 2024 and still focus on securing technologies for business operations as companies face continued hacking threats.

High priorities include protecting artificial intelligence and cloud computing, which have seen increasing corporate use, and reducing the number of cyber suppliers, chief information security officers say.

Russia Moves Forward With Plans to Buy Iranian Ballistic Missiles

Russia is planning to buy short-range ballistic missiles from Iran, a step that would enhance Moscow's ability to target Ukraine's infrastructure at a critical moment in the conflict, U.S. officials said.

Moscow's plans have provoked deep concern within the Biden administration and come as support wanes in Congress for continued U.S. military assistance for Ukraine. Lawmakers have yet to pass a bill that would provide additional funding for Ukraine.

U.S. Seeks Drone Bases in Coastal West Africa to Stem Islamist Advance

NAIROBI-The U.S. is seeking to base military drones along the West African coast in an urgent effort to stop the spread of al Qaeda and Islamic State in the region, according to American and African officials.

The U.S. is holding preliminary talks to allow American unarmed reconnaissance drones to use airfields in Ghana, Ivory Coast and Benin, countries on the Atlantic Ocean. Relatively stable and prosperous, the three coastal countries, along with Togo, now find themselves threatened by Islamist militants surging south from Mali, Burkina Faso and Niger-three beleaguered nations in the Sahel, the semidesert band south of the Sahara.

Write to ina.kreutz@wsj.com

TODAY IN CANADA

Earnings:

Nothing scheduled

Economic Calendar (ET):

0815 Dec Official International Reserves

0930 Dec Canada Services PMI

Stocks to Watch:

Algoma Steel Sees 3Q Total Steel Shipments 515,000 Tons

Expected Major Events for Thursday

00:30/JPN: Dec Japan Manufacturing PMI

06:30/GER: Dec North Rhine Westphalia CPI

07:45/FRA: Dec Provisional CPI

08:45/ITA: Dec Italy Services PMI

08:50/FRA: Dec France Services PMI

08:55/GER: Dec Germany Services PMI

09:00/GER: Dec Hesse CPI

09:00/GER: Dec Brandenburg CPI

09:00/GER: Dec Baden-Wuerttemberg CPI

09:00/GER: Dec Bavaria CPI

09:30/UK: Nov Money and Credit - Lending to Individuals, Lending to Businesses, Broad Money and Credit

09:30/UK: Nov Monetary & Financial Statistics

09:30/UK: Nov Bank of England effective interest rates

09:30/UK: Dec UK Official Reserves

09:30/UK: Dec S&P Global UK Services PMI

09:30/UK: Dec Narrow money (Notes & Coin) and reserve balances

10:00/GER: Dec Saxony CPI

12:30/US: Dec Challenger Job-Cut Report

13:00/GER: Dec Provisional CPI

13:15/US: Dec ADP National Employment Report

13:15/CAN: Dec Official International Reserves

13:30/US: 12/30 Unemployment Insurance Weekly Claims Report - Initial Claims

14:30/CAN: Dec Canada Services PMI

14:45/US: Dec US Services PMI

15:00/US: Nov Metropolitan Area Employment and Unemployment

15:30/US: 12/29 EIA Weekly Natural Gas Storage Report

16:00/US: 12/29 EIA Weekly Petroleum Status Report

16:00/US: Dec Global Services PMI

17:00/US: Dec Monthly U.S. Retail Chain Store Sales Index

21:30/US: Federal Discount Window Borrowings

21:30/US: Foreign Central Bank Holdings

23:50/JPN: Dec Monetary Base

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

Expected Earnings for Thursday

Buckle Inc (BKE) is expected to report.

Conagra Brands Inc (CAG) is expected to report $0.68 for 2Q.

Costco Wholesale Corp (COST) is expected to report.

Daily Journal (DJCO) is expected to report for 4Q.

Franklin Covey Co (FC) is expected to report $0.19 for 1Q.

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

Kura Sushi USA Inc (KRUS) is expected to report for 1Q.

Lamb Weston Holdings Inc (LW) is expected to report $1.42 for 2Q.

Lindsay Corp (LNN) is expected to report $1.30 for 1Q.

Odyssey Marine Exploration Inc (OMEX) is expected to report for 3Q.

Park Aerospace Corp (PKE) is expected to report for 3Q.

Quantum Corp (QMCO) is expected to report $-0.09 for 2Q.

RPM International Inc (RPM) is expected to report $1.22 for 2Q.

RVL Pharmaceuticals PLC (RVLPQ) is expected to report for 3Q.

Schnitzer Steel Industries Inc (RDUS) is expected to report $0.58 for 1Q.

Simply Good Foods (SMPL) is expected to report $0.36 for 1Q.

Taylor Devices (TAYD) is expected to report for 2Q.

Technical Communications Corp (TCCO) is expected to report for 4Q.

Walgreens Boots Alliance Inc (WBA) is expected to report $0.20 for 1Q.

Powered by Kantar Media and Dow Jones.

ANALYST RATINGS ACTIONS

Ambarella Cut to Equal-Weight From Overweight by Wells Fargo

Ameriprise Raised to Buy From Neutral by Goldman Sachs

Antero Resources Cut to Neutral From Buy by Mizuho

AptarGroup Raised to Outperform From Neutral by Baird

Aptiv Cut to Neutral From Outperform by Baird

Arcutis Biotherapeutics Raised to Buy From Neutral by Mizuho

Aurora Innovation Cut to Sell From Neutral by Goldman Sachs

Avery Dennison Cut to Neutral From Buy by Citigroup

BellRing Brands Cut to Hold From Buy by Truist Securities

Blackstone Cut to Neutral From Buy by Goldman Sachs

BorgWarner Cut to Neutral From Outperform by Baird

Bristol-Myers Squibb Cut to Neutral From Buy by B of A Securities

CACI International Cut to Hold From Buy by Jefferies

Callon Petroleum Cut to Neutral From Buy by Mizuho

CBRE Group Cut to In-Line From Outperform by Evercore ISI Group

Charles Schwab Cut to Neutral From Buy by Goldman Sachs

Chesapeake Energy Cut to Neutral From Buy by Mizuho

Citigroup Raised to Outperform From Peer Perform by Wolfe Research

Civitas Resources Raised to Buy From Neutral by Mizuho

CME Group Cut to Sell From Neutral by Goldman Sachs

CNX Resources Raised to Neutral From Underperform by Mizuho

Comstock Resources Cut to Underperform From Neutral by Mizuho

Crescent Energy Co Cut to Neutral From Buy by Mizuho Securities

Crescent Energy Cut to Neutral From Buy by Mizuho

Cullen/Frost Bankers Cut to Underperform From In-Line by Evercore ISI Group

Discover Financial Raised to Overweight From Neutral by Piper Sandler

Equitable Cut to Neutral From Overweight by JP Morgan

Exxon Mobil Cut to Neutral From Buy by Mizuho

Gulfport Energy Cut to Neutral From Buy by Mizuho

Health Catalyst Raised to Outperform From In-Line by Evercore ISI Group

Huntington Bancshares Raised to Outperform From In-Line by Evercore ISI Group

Keurig Dr Pepper Cut to Equal-Weight From Overweight by Morgan Stanley

Kymera Therapeutics Cut to Neutral From Buy by B of A Securities

Lazard Raised to Outperform From Peer Perform by Wolfe Research

Lincoln National Cut to Underweight From Neutral by JP Morgan

Masimo Cut to Hold From Buy by Needham

Maximus Cut to Market Perform From Outperform by Raymond James

MaxLinear Cut to Equal-Weight From Overweight by Wells Fargo

Mercury Systems Cut to Underperform From Hold by Jefferies

Northern Trust Cut to Underperform From Peer Perform by Wolfe Research

NY Community Bancorp Raised to Neutral From Underperform by Wedbush

Occidental Petroleum Cut to Neutral From Buy by Mizuho

O-I Glass Cut to Neutral From Buy by Citigroup

Pactiv Evergreen Raised to Buy From Neutral by Citigroup

PBF Energy Raised to Buy From Neutral by Mizuho

PJT Partners Cut to Underperform From Peer Perform by Wolfe Research

PNM Resources Cut to Neutral From Buy by Mizuho

PNM Resources Raised to Overweight From Equal-Weight by Wells Fargo

PPG Industries Raised to Buy From Hold by Vertical Research

Prudential Financial Cut to Neutral From Overweight by JP Morgan

PureCycle Technologies Cut to Hold From Buy by Craig-Hallum

Raymond James Cut to Neutral From Buy by Goldman Sachs

Regions Financial Cut to In-Line From Outperform by Evercore ISI Group

Rocket Cos. Cut to Equal-Weight From Overweight by Wells Fargo

Rocket Cos. Cut to Underperform From Market Perform by Keefe, Bruyette & Woods

Rockwell Automation Raised to Buy From Neutral by UBS

Sherwin-Williams Cut to Neutral From Outperform by Baird

Silgan Holdings Cut to Neutral From Buy by Citigroup

SoFi Technologies Cut to Underperform From Market Perform by Keefe, Bruyette & Woods

Southern First Bancshares Raised to Overweight From Neutral by Piper Sandler

State Street Raised to Buy From Neutral by Goldman Sachs

SW Energy Cut to Underperform From Neutral by Mizuho

Synovus Cut to In-Line From Outperform by Evercore ISI Group

Unum Group Raised to Overweight From Neutral by JP Morgan

Verizon Raised to Overweight From Sector Weight by Keybanc

Wendy's Cut to Equal-Weight From Overweight by Barclays

Xponential Fitness Cut to Neutral From Overweight by Piper Sandler

Yum Brands Raised to Overweight From Equal-Weight by Barclays

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

(END) Dow Jones Newswires

January 04, 2024 06:17 ET (11:17 GMT)

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