MARKET WRAPS
Watch For:
Consumer Price Index for December; Weekly Jobless Claims
Today's Headlines/Must Reads
- Google Trims Hundreds of Jobs as It Marshalls Resources for
AI
- Haley-DeSantis Food Fight Validates Trump's Debate Boycott
Strategy
- China's Messaging to the U.S.: Don't Rock the Boat
Opening Call:
Stock futures traded higher on Thursday ahead of the key
inflation print, with tech stocks continuing to lead gains.
Economists expect the consumer price index rose 3.2% year over
year in December. The reading could provide evidence on whether or
not the Federal Reserve will start cutting interest rates as early
as March.:
Overseas stocks gained. The Nikkei 225 set another multidecade
high and the Hang Seng rallied. Shares also rose across Europe.
Stocks to Watch
Amazon.com skipped a Wednesday deadline to offer remedies to the
European Union over its $1.7 billion acquisition of Roomba maker
iRobot, after the bloc had raised concerns that the deal could
stifle competition in the robot vacuum cleaner market.
Premarket Movers
Citigroup said it was taking one-time charges of $1.3 billion
related to exposures to geopolitical and economic risks in
Argentina and Russia. The stock was down 0.6%.
Coinbase rose 4.6%, MicroStrategy gained 2.6%, and Marathon
Digital was up 5.1% after the SEC approved the launch of the first
spot Bitcoin exchange-traded funds.
KB Homes reported fourth-quarter earnings and sales that fell
from a year earlier but the home builder said demand has been
improving as mortgage rates fall. The stock fell 2%.
Mastercard was up 1% to $432.42. It closed with a market
capitalization greater than $400 billion for the first time after
the stock finished on Wednesday up 1.3%.
Meta Platforms gained 0.7% having rose 3.7% on Wednesday to
close at $370.47, the highest close for shares in more than two
years.
Warren Buffett's Berkshire Hathaway increased its stake in
Occidental Petroleum to 34%, according to a filing with the SEC
late on Wednesday. Shares of Occidental were up 1.5%.
Skydance Media has been discussing a bid for Paramount Global's
parent company, National Amusements, The Wall Street Journal
reported, citing people familiar with the matter. Paramount shares
rose 1.4%.
Post-Close Movers
DocGo issued 2024 revenue outlook and said it planned to send a
cease-and-desist letter to a short seller that has targeted the
company. Its shares gained 7.4%.
Richardson Electronics swung to a loss as sales declined by a
third in the second quarter. Shares fell 12%.
TechTarget and Informa agreed to combine in which the latter
company's digital businesses will merge with the former to create a
global platform for data and market access. TechTarget shares rose
15%.
Forex:
Thursday's inflation data will likely be key to determining the
near-term outlook for the dollar and U.S. rates, though it won't be
a "game-changer," Danske Bank Research said.
"We do not expect today's CPI release to be a game-changer, as
we think the figures broadly will align with consensus."
The relatively loose financial conditions around the end of
2023, which helped push EUR/USD above 1.10, could very well tighten
within the next couple of months, Danske Bank said, adding that it
considers the euro remains a sell against the dollar from a
strategic perspective.
Deutsche Bank said the dollar is pricing in the biggest
interest-rate cuts of all G10 currencies, leaving very little
safe-haven premium and suggesting the currency has room to
strengthen.
Even as the Federal Reserve cuts interest rates, the dollar is
still likely to remain a higher-yielder among major currencies,
suggesting the dollar should rise near term, Deutsche Bank
said.
"We see the risks skewed towards a stronger dollar for the first
few months of 2024 with EUR/USD revisiting 1.05."
Bonds:
Bond yields fell as investors awaited the inflation data.
Some analysts have warned that the market may be too optimistic
about the likely pace of Fed rate cuts given that reducing
inflation further may prove harder.
"Importantly, absent improvements on the supply side, the
outlook for continued disinflation to 2% is likely to get trickier
from here--the so-called 'last mile' challenge," said Mohamed
El-Erian, adviser to Allianz and Gramercy, in a post on X.
Energy:
Oil prices moved higher in Europe on market concerns about
heightened tensions in the Middle East.
U.S. and British warships shot down one of the largest barrages
of missiles and drones fired by Yemen's Houthi rebels into the
crucial Red Sea shipping lane, while Secretary of State Antony
Blinken continued his efforts to prevent the conflict in Gaza from
escalating into a regional war.
Metals:
Metal prices were trading higher with Peak Trading Research
saying a weaker U.S. inflation print would point to a dovish Fed,
lower interest rates and a weaker dollar.
Nickel is stuck in a supply glu t that will take some time to
clear, BMI said, as it downgraded its forecast for 2024 to
$20,000/metric ton from $20,600/ton before. Weak demand in China
and a subdued growth outlook across major markets will cap prices,
BMI added.
Lithium investors are likely to experience further pain before
any recovery in prices, according to Morgan Stanley. The China
lithium carbonate price has fallen to roughly $12,000/metric ton,
down 80% in 2023 and its lowest value since mid-2021. The battery
metal's dramatic retreat has sparked debate on whether prices may
be near a nadir.
TODAY'S TOP HEADLINES
Seven & i to Acquire Most of Sunoco's Convenience Store,
Gasoline Retail Businesses
Seven & i Holdings' U.S. subsidiary will acquire most of
Sunoco's convenience store and gasoline retail businesses for $950
million.
Through this deal, the U.S. subsidiary 7-Eleven, Inc. will
purchase 204 stores in western Texas, New Mexico and Oklahoma,
which will connect its 7-Eleven and Speedway store network
alongside the interstate highway, the Japanese company said
Thursday.
Thomson Reuters Launches $626 Million Offer for Pagero
Thomson Reuters is launching a $626 million cash bid for Pagero
Group, beating a rival offer made by Vertex for the Swedish
e-invoicing provider last month.
Thomson Reuters said Thursday that it will begin a public tender
offer to acquire all of Pagero's shares on Friday. It intends to
pay 40 Swedish krona a share, valuing the Gothenburg-based company
at SEK6.4 billion ($626.0 million).
What to Watch in the CPI Report: Will Inflation's Rapid Downturn
Stabilize?
Consumer inflation ticked up in December but underlying price
pressures continued to ease, analysts estimate, fueling hopes that
the economy can dodge a recession.
Iowa GOP Debate Takeaways: Haley, DeSantis Pummel Each Other
DES MOINES, Iowa-The race to become the sole alternative to
Donald Trump in the GOP nomination contest grew sharper Wednesday
as Ron DeSantis and Nikki Haley faced each other alone in a testy
debate hours after the departure of the most vocal anti-Trump
candidate.
Wednesday night's face-off at Drake University, broadcast on
CNN, came after the presidential race was jolted by the withdrawal
of Chris Christie, who gave no indication that he would endorse
anyone as he tore into Republicans for failing to mount a stronger
challenge to Trump, the former president and GOP nomination
front-runner.
Chris Christie Drops Out of GOP Presidential Race
Chris Christie dropped out of the GOP presidential nomination
race, giving a potential boost to Nikki Haley even as he declined
to endorse another contender in the contest to dislodge
front-runner Donald Trump.
The former New Jersey governor's abrupt exit comes as Republican
voters will make their first selections in the Iowa caucuses on
Monday, followed by the New Hampshire primary eight days later.
Write to paul.larkins@dowjones.com TODAY IN CANADA
Earnings:
None scheduled
Economic Calendar:
Nothing scheduled
Stocks to Watch:
Alamos Gold Sees 4Q Total Gold Production 129,500 Ounces; Sees
2024 Total Gold Production 485,000 Ounces-525,000 Ounces; Sees 2025
Total Gold Production 470,000 Ounces-510,000 Ounces; Sees 2026
Total Gold Production 420,000 Ounces-560,000 Ounces
Cogeco 1Q EPS C$2.21; 1Q Adj EPS C$2.57; 1Q Rev C$776.2M
Cogeco Communications 1Q EPS C$2.01; 1Q Adj EPS C$2.33; 1Q Rev
C$747.7M
Lion Electric Gets $38 Million EPA Grant for 97 School Buses,
Related Charging Infrastructure
Pembina Pipeline Announces C$1.8 Billion Public Note
Offering
Thomson Reuters Recommends Public Tender Offer to Acquire 100%
of Pagero Group; Offer at SEK40 Per Share in Cash; Offer Values All
Pegero Shares at Approx SEK6.4B; Offer Needs Acceptance by Over 90%
of Company's Shareholders
Expected Major Events for Thursday
02:00/JPN: Dec Imported Vehicle Sales
05:00/JPN: Nov Indexes of Business Conditions - Preliminary
Release
09:00/ITA: Nov Industrial Production
11:00/FRA: Nov OECD CPI
13:30/US: Dec Real Earnings
13:30/US: Dec CPI
13:30/US: 01/06 Unemployment Insurance Weekly Claims Report -
Initial Claims
13:30/US: U.S. Weekly Export Sales
15:30/US: 01/05 EIA Weekly Natural Gas Storage Report
16:59/GER: Nov Balance of Payments
19:00/US: Dec Monthly Treasury Statement of Receipts and Outlays
of the U.S. Government
21:30/US: Federal Discount Window Borrowings
21:30/US: Foreign Central Bank Holdings
23:50/JPN: Dec Bank Lending
23:50/JPN: Dec International Transactions in Securities
23:50/JPN: 3Q Revised Balance of Payments
23:50/JPN: Nov Balance of Payments
All times in GMT. Powered by Kantar Media and Dow Jones.
Expected Earnings for Thursday
Concrete Pumping Holdings Inc (BBCP) is expected to report $0.18
for 4Q.
EBET Inc (EBET) is expected to report for 4Q.
Educational Development Corp (EDUC) is expected to report for
3Q.
Quantum Corp (QMCO) is expected to report $-0.09 for 2Q.
RVL Pharmaceuticals PLC (RVLPQ) is expected to report for
3Q.
Rocky Mountain Chocolate Factory Inc (RMCF) is expected to
report for 3Q.
Technical Communications Corp (TCCO) is expected to report for
4Q.
Velan Inc (VLN.T,VLNSF) is expected to report for 3Q.
Powered by Kantar Media and Dow Jones.
ANALYST RATINGS ACTIONS
ACV Auctions Raised to Buy From Neutral by Northcoast
Research
Alaska Air Group Cut to Neutral From Positive by Susquehanna
Allete Cut to Neutral From Buy by Sidoti & Co.
Ally Financial Inc Cut to Market Perform From Outperform by BMO
Capital
Ambrx Biopharma Cut to Market Perform From Market Outperform by
JMP Securities
Apple Cut to Neutral From Buy by Redburn Atlantic
Axonics Cut to Equal-Weight From Overweight by Wells Fargo
Berkshire Hills Bancorp Raised to Neutral From Underweight by
Piper Sandler
Bloom Energy Raised to Outperform From Neutral by Baird
Capital One Cut to Market Perform From Outperform by BMO
Capital
CH Robinson Worldwide Raised to Neutral From Negative by
Susquehanna
Charles Schwab Cut to Neutral From Buy by Citigroup
Chesapeake Utilities Raised to Outperform From Sector Perform by
RBC Capital
Citigroup Cut to Market Perform From Outperform by BMO
Capital
Constellation Brands Cut to Hold From Buy by Argus Research
Dow Cut to Hold From Buy by Deutsche Bank
DT Midstream Cut to Underperform From Peer Perform by Wolfe
Research
Duke Energy Raised to Outperform From Sector Perform by RBC
Capital
Etsy Cut to Neutral From Buy by Goldman Sachs
Exelon Raised to Buy From Neutral by Mizuho
Forward Air Cut to Underperform From Peer Perform by Wolfe
Research
Franklin BSP Realty Trust Raised to Market Outperform From
Market Perform by JMP Securities
Helmerich & Payne Cut to Equal-Weight From Overweight by
Barclays
Hexcel Raised to Buy From Hold by Truist Securities
Hexcel Raised to Neutral From Sell by Goldman Sachs
Home Depot Raised to Outperform From Neutral by Wedbush
Home Depot Raised to Outperform From Neutral by Wedbush
Howmet Aerospace Raised to Buy From Hold by Truist
Securities
Hub Group Cut to Neutral From Positive by Susquehanna
Illinois Tool Works Cut to Underperform From Neutral by B of A
Securities
Juniper Networks Cut to Equal-Weight From Overweight by
Barclays
Juniper Networks Cut to Hold From Buy by Needham
Landstar Raised to Outperform From Peer Perform by Wolfe
Research
Marten Transport Raised to Buy From Hold by Vertical
Research
Mercury Systems Cut to Sell From Neutral by Goldman Sachs
Navient Cut to Underweight From Equal-Weight by Barclays
Newmont Corporation Cut to Hold From Buy by TD Securities
Newmont Cut to Hold From Buy by TD Securities
NuSTAR Energy Cut to Underweight From Neutral by JP Morgan
Oneok Raised to Peer Perform From Underperform by Wolfe
Research
Piper Sandler Cos. Cut to Market Perform From Market Outperform
by JMP Securities
Rapid7 Raised to Buy From Neutral by Citigroup
Raymond James Raised to Overweight From Neutral by JP Morgan
RXO Cut to Hold From Buy by Vertical Research
Ryder System Cut to Hold From Buy by Vertical Research
Saratoga Investment Cut to Neutral From Buy by Compass Point
Solo Brands Cut to Hold From Buy by Jefferies
Solo Brands Cut to Neutral From Buy by Citigroup
Sun Country Airlines Cut to Neutral From Positive by
Susquehanna
Synchrony Financial Cut to Market Perform From Outperform by BMO
Capital
Toast Raised to Buy From Neutral by Goldman Sachs
United Airlines Raised to Positive From Neutral by
Susquehanna
Universal Logistics Raised to Buy From Hold by Stifel
Virgin Galactic Raised to Hold From Sell by Truist
Securities
Woodward Inc Raised to Buy From Sell by Goldman Sachs
Zillow Group Cut to Neutral From Buy by B of A Securities
This article is a text version of a Wall Street Journal
newsletter published earlier today.
(END) Dow Jones Newswires
January 11, 2024 06:17 ET (11:17 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.