MARKET WRAPS

Watch For:

U.S. Durable Goods for September; Bank of Canada rate decision; EIA Weekly Petroleum Status Report; Coca-Cola Co. 3Q results; Boeing Co. 3Q results; Kraft Heinz Co. 3Q results; General Motors Co. 3Q results; McDonald's Corp. 3Q results; Ford Motor Co. 3Q results; Suncor Energy Inc. 3Q results.

Opening Call:

Stocks were poised to trade around record highs as investors awaited results from more of the biggest U.S. companies.

Solid quarterly earnings from American corporations have quelled the investor concerns about supply-chain problems, inflation and Chinese economic growth that rattled markets at the start of fall. The S&P 500 is up 6.2% for October and on course for its biggest monthly advance since November.

"Investors got fairly gloomy in September, clearly against the backdrop of all sorts of macro concerns," said Paul O'Connor, head of the multiasset team at Janus Henderson Investors. "The broader story from results is that companies are managing these dynamics pretty well, and also managing expectations fairly well."

Money managers still have worries, ranging from the fate of President Biden's infrastructure and social-spending plans to the potential unwind of Federal Reserve stimulus measures that have goosed markets since early 2020. For now, though, many investors say they are sticking with stocks in the expectation of modest if bumpy returns through the end of the year.

Results from Coca-Cola, McDonald's and Kraft Heinz, expected before the opening bell, will offer clues about how companies are navigating shortages of workers and raw materials. Harley-Davidson, Boeing and General Motors will also report before the stock market begins to trade, while Ford Motor and eBay are on the block after markets close.

On the economic front, data on orders of durable goods are due to be released at 8:30 a.m. ET. Economists polled by FactSet expect orders to have fallen 1% in September from August, reflecting disruption to supply chains in the auto industry and other sectors.

There were broad declines in overseas markets. The Stoxx Europe 600 fell, pulling back from its second-highest close on record as shares of resource, auto and financial companies lost ground. Deutsche Bank slid 4.3% after the German lender reported a fall in investment-banking revenue.

Asian markets fell after American officials barred China Telecom, China's biggest telecom operator, from doing business in the U.S., adding to investor concerns over tensions between the two biggest economies.

Forex:

The dollar faces a hit from potentially weaker-than-expected third-quarter U.S. economic growth data on Thursday as the recovery is likely to have lost considerable momentum over the summer, Commerzbank said.

"If the market was to be disappointed it might postpone its expectation of an imminent [interest rate] lift-off, with the dollar being sold off short-term," Commerzbank currency analyst Antje Praefcke said.

With Federal Reserve officials entering the blackout period in the run-up to the November 2-3 policy meeting, the market is relying on economic data to confirm its interest rate expectations, she said.

The European Central Bank is likely to deliver a neutral message at Thursday's policy meeting that prompts the market to scale back its interest rate rise expectations and weakens the euro, ING said.

Expectations for the deposit rate to be raised by 10 basis points in late 2022 face a "reality check" as the ECB will avoid suggesting the debate over the withdrawal of stimulus is "leaning in any clear direction," ING analysts said.

That could dent the euro, but only marginally as the currency has showed little reaction to recent policy decisions, they said. EUR/USD could fall below 1.15 in November, versus 1.1596 currently, although seasonality trends in December may see it recover towards 1.1700 at year-end, they said.

Bonds:

In the bond market, the yield on 10-year Treasury notes ticked up to 1.626% Wednesday from 1.618% Tuesday.

Volatility looms for global bond markets due to the prospect of asset-purchase tapering at the next Federal Reserve meeting in early November, said Simon Lue-Fong, head of fixed income at Vontobel.

However, any rise in yields will likely prove a blip within a larger downward trend in yields that is driven by powerful structural forces such as digitalization and demographics, he said.

"All eyes are currently on the Fed but in the greater scheme of things tapering won't be the catalyst for a real change in direction of yields, " he said.

Credit markets would gain from investors taking profits in stocks, said Mizuho. Analysts at the bank see potential for profit-taking flows out of equities.

"Equities continue to perform well and the question once again becomes how far do indices need to rise to induce profit-taking in size," they said. If equities "are indeed vulnerable to investors taking profit, credit is likely the place to be."

However, if the lasting impression is that of a relatively positive third-quarter earnings season, investors may decide to stay invested in equities rather than increase fixed-income exposure, they said.

Commodities:

Oil prices were down after the American Petroleum Institute released data late Tuesday showing rises in U.S. crude oil, gasoline, and distillate fuel inventories.

Those figures come despite recent fears over falling supply--the crucial distribution hub of Cushing, Oklahoma continues to see falling inventory numbers, and Saudi Aramco on Tuesday raised concerns about the world's falling spare oil capacity.

Still, though, those remarks from Aramco are "at odds with what OPEC+ are forecasting for next year," noted ING's Warren Patterson, adding that the group expects strong non-OPEC supply growth in 2022 and ING's forecasts show a market in surplus in 2022.

Aluminum prices fell close to a two-month low as supply concerns ease. The metal has fallen over the past two weeks after hitting a 13-year high. Rising energy costs initially raised concerns that energy-intensive aluminum smelters could cut back on production. But China has been taking steps to curb rising coal prices, the latest of which is China's state planner asking coal-producing provinces to probe illegal storage sites and crack down on hoarding.

Prices for Chinese thermal coal, which powers much of the nation's aluminum smelters, have dropped over 9% this week as of Tuesday. Falling coal prices are easing concerns in the aluminum market.

TODAY'S TOP HEADLINES

Federal Trade Commission Scrutinizing Facebook Disclosures

WASHINGTON-Federal Trade Commission staffers have begun looking into disclosures that Facebook Inc.'s internal company research had identified ill effects from its products, according to people familiar with the matter.

Officials are looking into whether Facebook research documents indicate that it might have violated a 2019 settlement with the agency over privacy concerns, for which the company paid a record $5 billion penalty, one of the people said.

Deutsche Bank Reports Higher Profit as Loan Charges Fall

Deutsche Bank AG said its third-quarter net profit rose as lower bad-loan charges helped offset a fall in investment banking revenue and additional costs for its overhaul.

Still, the German lender said it is on track to meet ambitious financial targets next year, a key test for Chief Executive Officer Christian Sewing, who in 2019 vowed to make the bank leaner and more profitable following years of broken promises from his predecessors.

Ping An Insurance Nine-Month Net Profit Fell 21%

Ping An Insurance (Group) Co. of China Ltd. reported that its net profit for the first nine months of the year fell 21%, due to impairments made on investments related to China Fortune Land Development.

The Chinese insurer reported Wednesday that its net profit in the period was 81.64 billion Chinese yuan ($12.79 billion), compared with CNY103.04 billion in the same period a year earlier. Operating profit rose to CNY118.74 billion, compared with CNY108.69 billion.

Cigarette Sales in U.S. Climbed Slightly in 2020, FTC Says

Americans purchased more cigarettes last year, the first uptick in than two decades, according to a new report released by the Federal Trade Commission.

The number of cigarettes purchased by wholesalers and retailers rose slightly, 0.4%, to 203.7 billion from 202.9 billion in 2019.

Twitter Posts Strong Ad Revenue Growth Despite Apple Privacy Updates

Twitter Inc. largely dodged turmoil in the digital advertising market from new Apple Inc. app privacy policies and supply-chain disruptions as it reported a 37% jump in third-quarter revenue.

The company on Tuesday posted $1.28 billion in revenue, largely in line with Wall Street expectations, with ad sales rising 41% from the year-ago period.

Robinhood Revenue Falls on a Drop in Crypto Trading

Revenue at Robinhood Markets Inc. fell in the third quarter from the previous one, weighed down by a sharp decline in customers' cryptocurrency trading.

The popular trading app recorded revenue of $365 million, a 35% drop versus $565 million during the prior quarter. On a year-over-year basis, revenue climbed 35% from $270 million in the third quarter of 2020.

U.S. Takes Bitcoin Mining Crown After China Crackdown

The U.S. is fast becoming the new global hub for bitcoin mining.

After a government crackdown in China, many miners are betting on reliable access to energy and a more predictable regulatory environment in the U.S. More than a third of the global computing power dedicated to mining bitcoin is now drawn from machines in the U.S., up from less than a fifth last spring, according to data from the University of Cambridge.

U.S. Bans China Telecom Over National Security Concerns

The Federal Communications Commission revoked the license that allows China's largest telecom operator to do business in the U.S., citing national security concerns, dealing the latest in a series of blows against major Chinese businesses in the country.

The FCC said it was taking action against the state-owned China Telecom Corp.'s U.S. business because the company was "subject to exploitation, influence, and control by the Chinese government."

U.S. Consumer Confidence Rose as Delta Covid-19 Wave Eased

U.S. consumer confidence increased in October following three months of declines, as the wave of Covid-19 cases due to the Delta variant started to ease.

The consumer confidence index increased to 113.8 in October from a revised 109.8 in September, according to data from the Conference Board released Tuesday. The indicator came in above the 108.0 estimate from economists polled by The Wall Street Journal.

Home-Price Growth Holds at Record in August

Home-price growth held at a record high in August, as demand from home buyers remained robust despite skyrocketing prices.

The S&P CoreLogic Case-Shiller National Home Price Index, which measures average home prices in major metropolitan areas across the nation, rose 19.8% in the year that ended in August, unchanged from the prior month.

Tax Proposals Hit Headwinds as Democrats Try to Finalize Social-Spending Deal

WASHINGTON-An 11th-hour push by Democrats to fund their social-spending and climate bill faltered, with a proposed tax on billionaires' unrealized capital gains and revised bank-reporting requirements both running into opposition from party lawmakers.

Democrats have scrambled for days to find hundreds of billions of dollars of new revenue acceptable to Sen. Kyrsten Sinema (D., Ariz.), who is opposed to the increases in the top marginal rates on companies, capital gains and personal income that the party planned to rely on to finance the bill. With Republicans opposed to the package, Democrats need unanimous support to pass the legislation in the 50-50 Senate and can afford to lose only a few votes in the House.

German Consumer Confidence Is Expected to Increase in November, Defying Inflation

Consumer sentiment in Germany is expected to strengthen in November, due to increasing propensity to consume and declining propensity to save, according to data from market-research group GfK released on Wednesday.

GfK's forward-looking consumer sentiment index forecasts confidence among households rising to 0.9 point in November from a revised figure of 0.4 point in October. Economists polled by The Wall Street Journal anticipated a drop, expecting sentiment to decline to minus 0.3 point.

Chinese Industrial Companies' Profits Rebound in September

BEIJING--Chinese industrial companies' profits rebounded in September, ending a six-month slide in growth, official data showed Wednesday.

The growth was driven by the high-tech manufacturing industry, pharmaceutical enterprises and the steady recovery of profits in the consumer-goods manufacturing industry.

U.N. Finds Nations' Climate Plans Fall Short of Paris Accord

The world's emissions-reduction plans would allow far more global warming than targeted in the Paris climate accord, and some of the biggest emitters, including the U.S., aren't on track to hit their pollution targets, according to a report from the United Nations.

Tuesday's report adds urgency to the summit set to begin in a few days in Glasgow, Scotland, the first major climate meeting since more than 190 nations signed the Paris agreement in 2015. Countries are searching for ways to reach the agreement's goals, which call for them to ensure the rise in global temperatures by the end of the century is well under 2 degrees Celsius compared with the preindustrial era, and to strive to limit warming to 1.5 degrees.

Europe's Push to Loosen Russian Influence on Gas Prices Bites Back

For years, the European Union tried to loosen Russia's iron grip on its gas supplies by fostering a competitive import market. Those efforts have boomeranged this year as supplies run short, setting off an energy crisis across the continent.

European energy ministers met Tuesday to address the shortage, which is stinging homeowners and lifting prices for goods from metals to fertilizers. But there is little they can do to boost supplies immediately, and Russia isn't helping.

Pope Francis and President Biden to Meet as Both Face Abortion Tensions With U.S. Bishops

ROME-President Biden will meet Pope Francis on Friday for the first time during his administration, as both face contentious relationships with U.S. Catholic Church leaders over the issue of abortion.

The Vatican visit by the second Catholic president in American history will come a little more than two weeks before U.S. bishops, meeting in Baltimore, are expected to debate whether Catholic politicians who support abortion rights, such as Mr. Biden, should be denied Communion. In June, 168 bishops out of 229 voted to draft a statement that would address the question, within a longer document on the importance of the Eucharist.

Write to sarka.halas@wsj.com

TODAY IN CANADA

Earnings:

Acadian Timber Corp. (ADN.T) 3Q

Agnico Eagle Mines Limited (AEM.T) 3Q

Alamos Gold Inc. (AGI.T) 3Q

Capital Power Corp. (CPX.T) 3Q

Champion Iron Ltd. (CIA.T) 2Q

Lundin Mining Corp. (LUN.T) 3Q

Methanex Corp. (MX.T) 3Q

Mullen Grp Ltd. (MTL.T) 3Q .

North American Construction (NOA.T) 3Q

Suncor Energy Inc. (SU.T) 3Q

Teck Resources Limited (TECK.A.T) 3Q

Teck Resources Limited (TECK.B.T) 3Q

Waste Connections Inc. (WCN.T) 3Q

West Fraser Timber Co. (WFG.T) 3Q

Economic Indicators (ET):

1000 Bank of Canada interest rate announcement

Stocks to Watch:

Zoomd Technologies Expects Higher Revenue in 2021 than Previously Expected

Zoomd Technologies Ltd. said Tuesday that it now expects revenue in 2021 to increase more than it previously anticipated as customers increase their marketing budgets.

The Canadian marketing technology company said it has set a new guidance for revenue to grow by 80% compared with 2020.

Previously, the company had expected revenue to increase between 30% and 40% year-over-year.

Zoomd said it is benefiting from growth from new costumers acquired primarily during the second half of 2020 and into 2021 which are increasing their marketing budgets.

It also has benefited from growth in new regions such as Latin America, Asia and India.

Other News:

No items published

Market Talk:

No items published

Expected Major Events for Wednesday

06:00/GER: Nov GfK consumer climate survey

06:00/GER: Sep Foreign trade price indices

06:45/FRA: Sep PPI

06:45/FRA: Oct Consumer confidence survey

08:00/ITA: Sep Foreign Trade non-EU

08:30/UK: Sep Capital issuance

10:00/FRA: 3Q Claimant count and job advertisements collected by Pole emploi

11:00/US: 10/22 MBA Weekly Mortgage Applications Survey

12:30/US: Sep Advance Report on Durable Goods

12:30/US: Sep Advance Economic Indicators Report

14:00/CAN: Bank of Canada interest rate announcement

14:30/US: 10/22 EIA Weekly Petroleum Status Report

23:01/UK: Sep UK monthly automotive manufacturing figures

23:50/JPN: Sep Preliminary Retail Sales

23:50/JPN: Oct Provisional Trade Statistics for 1st 10 days of Month

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

Expected Earnings for Wednesday

Amphenol Corp (APH) is expected to report $0.63 for 3Q.

Applied Industrial Technologies Inc (AIT) is expected to report $1.18 for 1Q.

Ares Management Corp (ARES) is expected to report $0.56 for 3Q.

Armstrong Flooring Inc (AFI) is expected to report $-0.26 for 3Q.

Arrow Financial (AROW) is expected to report $0.80 for 3Q.

Automatic Data Processing Inc (ADP) is expected to report $1.50 for 1Q.

Avery Dennison Corp (AVY) is expected to report $1.97 for 3Q.

Boston Scientific (BSX) is expected to report $0.21 for 3Q.

CME Group Inc (CME) is expected to report $1.44 for 3Q.

Civista Bancshares (CIVB) is expected to report $0.62 for 3Q.

Coca-Cola Co (KO) is expected to report $0.56 for 3Q.

DTE Energy Co (DTE) is expected to report $1.85 for 3Q.

Enterprise Products Partners LP (EPD) is expected to report $0.51 for 3Q.

Evercore Inc (EVR) is expected to report $3.05 for 3Q.

Farmers & Merchants Bancorp Inc (FMAO) is expected to report $0.56 for 3Q.

Farmers National Banc (FMNB) is expected to report $0.51 for 3Q.

First Citizens Bancshares Inc. Cl A (FCNCA,FCNCB) is expected to report $11.48 for 3Q.

Fiserv Inc (FISV) is expected to report $0.76 for 3Q.

Flagstar Bancorp (FBC) is expected to report $1.86 for 3Q.

Harley-Davidson (HOG) is expected to report $0.69 for 3Q.

Masco Corp (MAS) is expected to report $0.88 for 3Q.

New York Community Bancorp (NYCB) is expected to report $0.32 for 3Q.

Norfolk Southern Corp (NSC) is expected to report $2.93 for 3Q.

Old Dominion Freight Line (ODFL) is expected to report $2.37 for 3Q.

Owens Corning (OC) is expected to report $2.47 for 3Q.

Penske Auto (PAG) is expected to report $3.76 for 3Q.

Prosperity Bancshares (PB) is expected to report $1.37 for 3Q.

Republic First Bancorp (FRBK) is expected to report $0.07 for 3Q.

Rollins Inc (ROL) is expected to report $0.20 for 3Q.

Ryder System (R) is expected to report $2.10 for 3Q.

Santander Consumer USA Holdings Inc (SC) is expected to report $1.92 for 3Q.

Sharps Compliance (SMED) is expected to report $-0.03 for 1Q.

Silgan Holdings Inc (SLGN) is expected to report $1.05 for 3Q.

Stifel Financial (SF) is expected to report $1.30 for 3Q.

Stock Yards Bancorp Inc (SYBT) is expected to report $0.76 for 3Q.

Teck Resources Ltd - Class B (TECK,TECK.A.T,TECK.B.T) is expected to report $1.50 for 3Q.

Teledyne Technologies Inc (TDY) is expected to report $2.66 for 3Q.

Thermo Fisher Scientific (TMO) is expected to report $3.84 for 3Q.

Travel + Leisure Co (TNL) is expected to report for 3Q.

Virtus Investment Partners Inc (VRTS) is expected to report $2.08 for 3Q.

Powered by Kantar Media and Dow Jones.

ANALYST RATINGS ACTIONS

Bally's Raised to Outperform From Market Perform by Cowen & Co.

Beyond Meat Cut to Underperform From Neutral by Credit Suisse

CNX Resources Cut to Underperform From Outperform by Raymond James

Coty Raised to Buy From Hold by Deutsche Bank

Envista Holdings Raised to Buy From Neutral by B of A Securities

EOG Resources Is Maintained at Outperform by Raymond James

Facebook Raised to Buy From Neutral by Rosenblatt

Heartland Financial Raised to Overweight From Equal-Weight by Stephens & Co.

Intel Cut to Market Perform From Outperform by BMO Capital

Kimberly-Clark Cut to Hold From Buy by Berenberg

RealReal Raised to Outperform From Market Perform by Raymond James

Simulations Plus Raised to Buy From Hold by Craig-Hallum

Upstart Holdings Cut to Hold From Buy by Jefferies

Winnebago Cut to Sector Weight From Overweight by Keybanc

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

(END) Dow Jones Newswires

October 27, 2021 06:09 ET (10:09 GMT)

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