MARKET WRAPS

Watch For:

U.S. Personal Income & Outlays for September; U.S. Employment Cost Index for 3Q; U.S. Chicago Business Barometer -- ISM-Chicago Business Survey -- Chicago PMI for October; University of Michigan Final Consumer Survey for October; Canada GDP for August; Exxon Mobil Corp. 3Q results; Chevron Corp. 3Q results.

Opening Call:

Stock futures declined after quarterly reports from Apple and Amazon.com showed that supply-chain problems and tight labor markets are hitting even some of the biggest corporate winners of the pandemic.

Investors have been monitoring earnings for signs that stickier-than-expected inflation and shipping and logistics delays are weighing on profits. Apple said that supply-chain disruptions were hindering the manufacturing of iPhones and other products and would bring increased challenges during the holiday-shopping season. Amazon posted lower-than-expected third-quarter sales and signaled that a tight labor market and supply-chain disruptions would weigh on fourth-quarter earnings.

In premarket trading, Apple shares fell 3.7%, and Amazon.com shares retreated 4.8%.

"Because they are two big household names, it could be a fragile market, " said Lars Skovgaard Andersen, investment strategist at Danske Bank Wealth Management. While investors have known about supply-chain and inflation issues for months, he said, "The question is, is it going to continue to be a problem? We don't buy equities based on what's happening right now, we buy based on what's going to happen in the future."

Meantime, Facebook shares added 1.2% premarket after the company changed its name to Meta to reflect growth opportunities beyond its namesake social-media platform in the digital realms known as the metaverse.

Overall, strong earnings have supported a stock rally this month. About 82% of the S&P 500 companies that have posted results this reporting season have beaten analysts' earnings expectations, according to FactSet data from early Thursday. Companies including Chevron, Colgate-Palmolive and Exxon Mobil are slated to report earnings before the market opens.

U.S. consumer spending data, due out at 8:30 a.m. ET, is expected to show an increase in September, driven both by higher prices and higher demand.

Forex:

The euro could rise against the dollar on potentially strong third-quarter eurozone economic growth data and month-end flows from the rebalancing of investors' portfolios, Unicredit said.

"We expect firm 3Q21 GDP growth numbers across the eurozone this morning compared to the bleak performance of the U.S. economy that emerged yesterday," Unicredit analysts said, noting that third-quarter U.S. economic data also missed expectations Thursday.

"Moreover, a very large amount of USD was bought in recent weeks, according to IMM statistics, and it is the end of the month, two factors that have the potential to amplify the USD adjustment."

Bonds:

In bond markets, the yield on the 10-year Treasury note ticked up to 1.596% from 1.568% Thursday.

Insight Investment expects U.S. inflation to moderate and believes that an interest rate rise by the Federal Reserve is unlikely before the end of 2022 or early 2023, said portfolio manager Scott Ruesterholz.

"Because the growth slowdown is led by supply shortages and not waning demand, we believe the Fed will be inclined to look through it and announce a taper next week," he said.

Insight Investment is of the view that inflationary pressures are at or near their peak, though just as it may take over a year for supply chains to normalize fully, it will similarly take some time for inflation to normalize, he said, expecting inflation to stay above 3% into next summer.

The message from the European Central Bank's meeting on Thursday was that the current transitory factors pushing up inflation will diminish next year, bringing inflation back below target, but markets were left wanting more, said Mizuho.

The kneejerk reaction--with eurozone government bonds massively selling off--was that ECB President Christine Lagarde wasn't "dovish" enough, Mizuho said, implying that market had hoped for more signals that policy tightening won't come fast.

However, the quick retracement in Bunds indicated that the messages related to the ECB's inflation projects have been heard, Mizuho added.

Commodities:

Oil prices rose, with both benchmarks on course for gentle weekly losses amid rising inventories and easing pressure on the energy basket after President Putin ordered Gazprom to increase gas flow to Europe.

Those gains come after reports that the OPEC+ Joint Technical Committee revised its oil market balance for Q4 from an undersupply of 670,000 barrels a day to an undersupply of 1.1 million barrels a day, according to DNB Markets's Helge Andre Martinsen. OPEC+ meets next week as COP26 gets underway.

Metals prices fell as China's efforts to tamp down rising coal prices continue to alleviate concerns that metals supply would be hampered by high energy prices.

Beijing's efforts have sparked a sell-off in coal, which "in turn spilled over into both China's non-ferrous and ferrous markets as the thinking was that with increased coal (and power) supply, metals production could ramp-up," said Ed Meir, a metals consultant at ED&F Man.

Copper is still set for a monthly gain of roughly 7% thanks to low inventories levels, which have offset the concerns about the global gas crunch.

TODAY'S TOP HEADLINES

Apple Warns of Supply Chain Woes While Amazon Faces Increased Labor Costs

Apple Inc. and Amazon.com Inc. reported quarterly results that showed how supply-chain problems and tight labor markets are tripping up even some of the biggest business winners of the pandemic era.

Apple, which had record 12-month profit nearing $100 billion, warned that supply-chain disruptions are hindering iPhone and other product manufacturing and would bring increased challenges during the important holiday-shopping quarter.

Amazon Earnings Suffer as Growth Slows, Costs Rise

Amazon.com Inc. posted lower-than-expected third-quarter sales and signaled that a tight labor market and supply-chain disruptions would weigh on earnings.

The Seattle-based tech company has been navigating substantial shifts in the economy in recent months. Online sales have surged since the start of the Covid-19 pandemic, boosting Amazon's profit, but sales growth has slowed while labor and supply-chain shortages make it harder to meet demand. The company says it has spent heavily to build out its fulfillment network.

Facebook's Four New Letters Won't Spell Alphabet

The first in a three-part series on Facebook's finances

The most controversial company in tech needs the world to see it through rose-colored virtual-reality glasses. But a rose by any other name has just as many thorns.

Facebook Changes Company Name to Meta in Focus on Metaverse

Facebook Inc. Chief Executive Officer Mark Zuckerberg said the company changed its name to Meta to reflect growth opportunities beyond its namesake social-media platform in online digital realms known as the metaverse.

"Over time I hope our company will be seen as a metaverse company," Mr. Zuckerberg said Thursday. He unveiled the name, formally Meta Platforms Inc., for the company that also includes Facebook, Instagram, WhatsApp and other products during Facebook's annual developer event, where he detailed his vision for the metaverse that he sees as key to the tech giant attracting younger users.

Evergrande Averts Default Again by Making Second Late Payment

China Evergrande Group avoided default for a second time by making an overdue interest payment on dollar bonds shortly before the end of a 30-day grace period, people familiar with the matter said.

Evergrande, one of China's largest real-estate developers, made a coupon payment that was originally due on Sept. 29, the people said. Evergrande was on the hook to pay about $45 million of interest on $951 million of bonds, which have a 9.5% coupon and mature in 2024, according to CreditSights research.

American Banks Have What They Want in China. Their Fate Is Still Out of Their Hands.

American investors are probably warier of China now than at any time in decades. Relations between the two countries are tense, and the prospect of a wider fallout from the struggles of property giant China Evergrande Group hovers over the market.

Yet at the same time, it is possibly a historic moment for American financial companies in China. As part of the Trump administration's trade deal, China agreed to ease foreign-ownership restrictions across financial services. Now, U.S. banks including Goldman Sachs, JPMorgan Chase and Morgan Stanley are all at some stage of taking full or fuller ownership of what used to be securities industry joint ventures with Chinese partners. These moves will help give them more access to China's onshore investment banking and trading markets. Meanwhile major U.S.-based asset managers such as BlackRock are being welcomed in as never before to help manage a huge pool of wealth.

Evergrande Averts Default Again by Making Second Late Payment

China Evergrande Group avoided default for a second time by making an overdue interest payment on dollar bonds shortly before the end of a 30-day grace period, people familiar with the matter said.

Evergrande, one of China's largest real-estate developers, made a coupon payment that was originally due on Sept. 29, the people said. Evergrande was on the hook to pay about $45 million of interest on $951 million of bonds, which have a 9.5% coupon and mature in 2024, according to CreditSights research.

Consumer Spending Likely Grew More Slowly in September

Growth in household spending likely slowed in September as a combination of high Covid-19 cases, product shortages and rising prices held consumers back.

Economists surveyed by The Wall Street Journal estimate the Commerce Department on Friday will report that personal-consumption expenditures rose 0.6% in September, down from 0.8% in August.

U.S. Economy Slowed in Third Quarter on Delta Surge, Supply Crunch

The U.S. economy grew at the slowest pace of the recovery in the third quarter, but economists expect strong consumer demand and an easing pandemic to boost growth in the coming months despite lingering supply constraints.

Gross domestic product grew at a seasonally adjusted annual rate of 2.0% from July to September, the Commerce Department said Thursday, marking the weakest quarter of growth since the recovery began in mid-2020.

Biden Framework for Social-Climate Package Fails to Ease Passage of Infrastructure Bill

WASHINGTON-The White House released a $1.85 trillion framework designed to show progress in months of social spending and climate talks that fell short of persuading progressives to quickly approve a parallel, roughly $1 trillion infrastructure bill.

President Biden met with House Democrats in the morning to pitch them on the new framework, a far slimmer piece of legislation than the $3.5 trillion package the party originally had outlined. Democrats have been rushing to complete negotiations on the bill so that they can also move forward with the public-works legislation, which passed the Senate over the summer but has languished in the House.

Eurozone Inflation Rises at the Fastest Pace in 13 Years

The annual rate of inflation in the eurozone accelerated in October at the fastest pace since July 2008, due to rising energy prices, supply constraints and strong consumer demand.

Consumer prices rose 4.1% on year in October, according to a first estimate released Friday by Eurostat, the European Union's statistics agency. Prices rose 3.4% on year in September.

German Economy Grew at Slower-Than-Expected Pace in 3Q

Germany's economy grew in the third quarter, according to a first estimate published Friday by the Federal Statistical Office, but missed expectations.

Gross domestic product rose by an adjusted 1.8% from the previous quarter, Destatis said. This expansion was smaller than economists' expectations of 2.1% growth in The Wall Street Journal's survey.

G-20 Climate Talks Threatened by Clash Over Coal Ahead of COP26

ROME-Leaders from the Group of 20 major economies are split over phasing out coal and limiting global warming to 1.5 degrees Celsius, officials said, throwing into doubt whether ambitious climate change targets can be hit.

The gathering of world leaders in Rome this weekend is expected to set the tone for talks at the nearly two-week-long United Nations climate summit in Glasgow, slated to follow immediately afterward.

Florida Sues Biden Administration Over Covid-19 Vaccine Mandate for Federal Contractors

Florida is suing the Biden administration over vaccine mandates for federal contractors, Gov. Ron DeSantis said Thursday.

The lawsuit, filed in the U.S. District Court in the middle district of Florida's Tampa division, alleges that the requirement for employees at federal contractors be vaccinated by Dec. 8 interferes with Florida's employment policies and threatens economic harm and the loss of federal contracts.

SEC Seeks Testimony From Sen. Richard Burr's Brother-in-Law in Insider-Trading Probe

WASHINGTON-The Securities and Exchange Commission is asking a federal judge to require Sen. Richard Burr's brother-in-law to testify in an enforcement probe that examines possible insider trading by both men.

U.S. District Judge Lewis Liman has scheduled a Friday hearing to consider the SEC's request for testimony from Gerald Fauth, who is chairman of the National Mediation Board and Mr. Burr's brother-in-law. The SEC says the order is necessary because Mr. Fauth has "waged a relentless battle to avoid" complying with a SEC subpoena issued in May 2020, according to a court filing.

NAACP Urges Pro Athletes to Avoid Deals With Texas Teams Over New State Laws

The NAACP is calling on professional athletes from five sports leagues to avoid signing with Texas-based teams over laws recently passed in the state.

The two-page letter sent Thursday asks the athletes to use their influence to help protect the constitutional rights of people affected by the new laws, including Texas's recent policies on abortion, voting rights and coronavirus mask mandates. The athletes are members of Major League Baseball and the National Football League, National Hockey League, National Basketball Association and Women's National Basketball Association.

Accused Major League Baseball Hacker Charged With Extortion

Federal prosecutors charged a Minnesota man on Thursday with illegally streaming sports games from sites including Major League Baseball and then attempting to extort the league after he hacked its website.

The U.S. attorney's office in Manhattan accused Joshua Streit, 30 years old, with operating a website that illegally live-streamed games from professional sports leagues, including Major League Baseball, the National Basketball Association, the National Football League and the National Hockey League. Mr. Streit then contacted MLB in an attempt to get money for telling the league about unauthorized access to its systems, prosecutors said.

U.S. in Talks to Pay Hundreds of Millions to Families Separated at Border

WASHINGTON-The Biden administration is in talks to offer immigrant families that were separated during the Trump administration around $450,000 a person in compensation, according to people familiar with the matter, as several agencies work to resolve lawsuits filed on behalf of parents and children who say the government subjected them to lasting psychological trauma.

The U.S. Departments of Justice, Homeland Security, and Health and Human Services are considering payments that could amount to close to $1 million a family, though the final numbers could shift, the people familiar with the matter said. Most of the families that crossed the border illegally from Mexico to seek asylum in the U.S. included one parent and one child, the people said. Many families would likely get smaller payouts, depending on their circumstances, the people said.

Write to sarka.halas@wsj.com

TODAY IN CANADA

Earnings:

Cameco Corp. (CCO.T) 3Q

Fortis Inc. (FTS.T) 3Q

HEXO Corp. (HEXO.T) 4Q

Imperial Oil Limited (IMO.T) 3Q

Shaw Commun (SJR.B.T) 4Q

SNC-Lavalin Grp Inc. (SNC.T) 3Q

Voyager Digital Ltd. (VOYG.T) 2Q

Wstshore Termnls Invstmnt (WTE.T) 3Q

Economic Indicators (ET):

0830 Sep Industrial product & raw materials price indexes

0830 Aug GDP

Expected Major Events for Friday

01:00/JPN: Sep Steel Imports & Exports Statistics

04:30/JPN: Sep Preliminary Report on Petroleum Statistics

05:00/JPN: Oct Consumer Confidence Survey

05:00/JPN: Sep Housing Starts

05:00/JPN: Sep Construction Orders

05:30/FRA: Sep Household consumption expenditure in manufactured goods

05:30/FRA: 3Q GDP - first estimate

06:45/FRA: Sep Housing starts

06:45/FRA: Oct Provisional CPI

08:00/ITA: 3Q GDP preliminary estimate

08:00/GER: 3Q GDP - 1st release

08:30/UK: Sep Bank of England effective interest rates

08:30/UK: Sep Money and Credit - Lending to Individuals, Lending to Businesses, Broad Money and Credit

08:30/UK: Sep Monetary & Financial Statistics

08:30/UK: 3Q Insolvency statistics

09:00/ITA: Oct Provisional CPI

09:00/ITA: Oct Cities CPI

12:30/US: Sep Personal Income & Outlays

12:30/CAN: Sep Industrial product & raw materials price indexes

12:30/CAN: Aug GDP

12:30/US: 3Q Employment Cost Index

13:45/US: Oct Chicago Business Barometer - ISM-Chicago Business Survey - Chicago PMI

14:00/US: Oct University of Michigan Survey of Consumers - final

19:00/US: Sep Agricultural Prices

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

Expected Earnings for Friday

AbbVie Inc (ABBV) is expected to report $2.40 for 3Q.

AdvanSix (ASIX) is expected to report $1.20 for 3Q.

Balchem Corp (BCPC) is expected to report $0.79 for 3Q.

Barnes Group (B) is expected to report $0.49 for 3Q.

Booz Allen Hamilton Holding Corp (BAH) is expected to report $1.03 for 2Q.

Carter's Inc (CRI) is expected to report $1.74 for 3Q.

Cboe Global Markets Inc (CBOE) is expected to report $1.27 for 3Q.

Cerner Corp (CERN) is expected to report $0.62 for 3Q.

Charter Communications Inc (CHTR) is expected to report $5.90 for 3Q.

Chevron Corporation (CVX) is expected to report $2.17 for 3Q.

Church & Dwight Inc (CHD) is expected to report $0.70 for 3Q.

Colgate-Palmolive Co (CL) is expected to report $0.79 for 3Q.

Cowen Inc (COWN) is expected to report $1.05 for 3Q.

Dime Community Bancshares Inc (DCOM) is expected to report for 3Q.

Exxon Mobil Corp (XOM) is expected to report $1.58 for 3Q.

Fannie Mae (FNMA) is expected to report $0.42 for 3Q.

Fortis Inc (FTS,FTS.T) is expected to report $0.66 for 3Q.

Freddie Mac (FMCC) is expected to report $0.00 for 3Q.

Gorman-Rupp Co (GRC) is expected to report $0.34 for 3Q.

Grainger (WW) (GWW) is expected to report $5.36 for 3Q.

HEXO Corp (HEXO,HEXO.T) is expected to report for 4Q.

Huntsman Corp (HUN) is expected to report $0.98 for 3Q.

Imperial Oil Ltd (IMO,IMO.T) is expected to report $1.25 for 3Q.

L3Harris Technologies Inc (LHX) is expected to report for 3Q.

Moneygram International Inc (MGI) is expected to report $0.02 for 3Q.

Newell Brands Inc (NWL) is expected to report $0.46 for 3Q.

Oppenheimer Holdings (OPY) is expected to report for 3Q.

PNM Resources Inc (PNM) is expected to report $1.24 for 3Q.

Phillips 66 (PSX) is expected to report $2.08 for 3Q.

Phillips 66 Partners LP (PSXP) is expected to report $1.01 for 3Q.

Portland General Electric (POR) is expected to report $0.64 for 3Q.

Provident Financial Services Inc (PFS) is expected to report $0.47 for 3Q.

SNC-Lavalin (SNC.T,SNCAF) is expected to report $0.35 for 3Q.

Shaw Communications Inc - Class B (SJR,SJR.A.V,SJR.B.T) is expected to report $0.33 for 4Q.

Travelzoo (TZOO) is expected to report for 3Q.

US Silica (SLCA) is expected to report $-0.21 for 3Q.

Westbury Bancorp (WBBW) is expected to report for 4Q.

Weyerhaeuser Co (WY) is expected to report $0.57 for 3Q.

WisdomTree Investments Inc (WETF) is expected to report $0.07 for 3Q.

iRadimed Corp (IRMD) is expected to report $0.15 for 3Q.

Powered by Kantar Media and Dow Jones.

ANALYST RATINGS ACTIONS

Armour Residential REIT Cut to Hold From Buy by JonesTrading

Avis Budget Group Cut to Neutral From Buy by B of A Securities

BJ's Wholesale Club Cut to Neutral From Buy by B of A Securities

Boot Barn Holdings Raised to Buy From Hold by Craig-Hallum

CVR Energy Cut to Underperform From Neutral by Credit Suisse

Elanco Animal Health Cut to Hold From Buy by Stifel

Eversource Energy Raised to Neutral From Underperform by Mizuho

First Commonwealth (PA) Raised to Outperform From Sector Perform by RBC Capital

LendingClub Raised to Buy From Neutral by Compass Point

Matador Resources Cut to Equal-Weight From Overweight by Capital One

Motorola Solutions Cut to Neutral From Buy by Northcoast Research

Netgear Cut to Neutral From Buy by BWS Financial

Norfolk Southern Raised to Buy From Neutral by B of A Securities

Paccar Raised to Outperform From Neutral by Credit Suisse

Phillips 66 Partners Cut to Neutral From Outperform by Credit Suisse

Redwood Trust Is Maintained at Strong Buy by Raymond James

Remitly Global Raised to Outperform From Peer Perform by Wolfe Research

RiceBran Technologies Cut to Hold From Buy by Lake Street

Sherwin-Williams Cut to Neutral From Buy by B of A Securities

Stock Yards Bancorp Cut to Market Perform From Outperform by Keefe, Bruyette & Woods

Teradyne Raised to Buy From Hold by Craig-Hallum

Teradyne Raised to Buy From Sell by UBS

Teradyne Raised to Outperform From Market Perform by Cowen & Co.

Terminix Cut to Neutral From Outperform by Baird

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

(END) Dow Jones Newswires

October 29, 2021 05:55 ET (09:55 GMT)

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