Watch For:

U.S. Weekly Jobless Claims; Oracle 2Q earnings.

Opening Call:

Stock futures edged down as investors assessed the latest headlines on restrictions to limit the spread of the Omicron variant.

Stocks have swung in recent weeks, buffeted by conflicting headlines on the Omicron coronavirus variant and mixed signals on the health of the economy. Investors are still awaiting further data on the strain's severity and vaccine efficacy. Some pharmaceutical companies including Pfizer and GlaxoSmithKline have said this week that their shot and antibody treatment appear to work in early-stage studies.

European governments have moved to tighten restrictions, spurring concerns about setbacks to the economic recovery. U.K. Prime Minister Johnson outlined a new work-from-home mandate and mask guidelines on Wednesday evening. A study released by a Japanese scientist said the variant was four times more transmissible than the Delta strain.

"There's still a lot we don't know, we're waiting for details to emerge, " said Arun Sai, a multiasset strategist at Pictet Asset Management. On restrictions, "as long as it's temporary, it doesn't completely derail the recovery. We now know the playbook. We're talking about a one or two quarter postponement of a recovery in services, that's the critical element that's at risk here."

Cloud-computing firm Oracle, network company Broadcom and wholesaler Costco are set to report Thursday after market close. Popular meme stock GameStop declined 3.2% in off-hours trading after the company posted earnings that showed a widening loss last quarter.

"Earnings have been strong overall, it's a really positive underlying driver for equity markets," said Kiran Ganesh, a multiasset strategist at UBS Global Wealth Management.

Shares of declined 0.2% premarket after the Italian government fined it $1.3 billion for alleged abuse of market dominance. The European Union is also investigating the e-commerce giant in a similar antitrust case.

Fresh data on U.S. jobless claims, a proxy for layoffs, is set to go out at 8:30 a.m. ET. Economists are forecasting that the level will remain near pandemic lows. It has come close to the pre-pandemic average in recent weeks in a sign that the labor market is improving.

In Asia, China's producer-price index showed a 12.9% increase in November from a year earlier, a decline from the previous month but still more than economists expected. Consumer prices also rose.

"Factory gate prices only showed modest signs of slowing," which may signal that higher inflation will remain in place in the coming months, said Michael Hewson, a chief markets analyst at CMC Markets. China's producer prices drive consumer prices around the world, he added.


The dollar was higher in Europe, with the USD Index back above 96.00, as investors looked ahead to data Friday that are expected to show inflation accelerated further in November, which would support bets the Federal Reserve will speed up the withdrawal of asset purchases.

On Wednesday the dollar "emerged as an underperformer" on reduced safe haven flows after the Pfizer/BioNTech announcement, said ING analysts. "Investors may be attracted by current levels [in particular against low-yielders] to build back some dollar longs ahead of the CPI report and the Fed meeting next week, so we would expect the dollar to start finding some support as early as today."

Sterling is likely to weaken versus the dollar if the Bank of England delays raising interest rates and the Fed accelerates the tapering of asset purchases, MUFG Bank said.

The BOE will likely keep rates unchanged until at least February after the U.K. government tightened coronavirus restrictions and following recently cautious comments from BOE officials, MUFG's Lee Hardman said.

Meanwhile, the Fed should speed up tapering at its December 14-15 meeting, he said. "The time gap between the first BOE and Fed rate hikes is likely to be much shorter now than initially expected which should keep downward pressure on cable heading into year end and moving it closer to the 1.3000-level."

Bitcoin reversed direction after four days of gains, slipping 2% from its level at 5 p.m. Wednesday. It traded below $50,000, a 28% drop from its record high set in November.


The yield on the benchmark 10-year Treasury note edged down to 1.494% Thursday from 1.508% Wednesday.

Long-dated yields for government debt edged higher still in Europe, after they posted their biggest three-day rise in weeks following the Pfizer/BioNTech Omicron report. Meanwhile, the 2-year yield, which is most closely associated with the near-term path of Fed policy, declined on Wednesday.

Bank of America said the yield curve will keep flattening: "The hawkish Fed pivot suggests risks of further curve flattening and further pull forward of rate hikes."

Higher U.S. front-end rates "are a clear reflection of the recent shift in Fed policy due to elevated inflation concerns," while fears of policy errors help drive the long-end trend, as tightening begins when the economy still struggles, said BofA.

The European Central Bank's first interest rate rise could come at the beginning of 2024, with a 25 basis point increase, said Barclays. It sees some risks of a rate hike already a quarter earlier, or even in mid-2023, subject to inflationary developments.

"If inflation does not fall below 1.5% in 4Q 2022-1Q 2023, as per our and the ECB's current forecasts, but converges to 2% from above, the lift-off date would likely be brought forward to 1H 2023," Barclays said.


Brent crude could climb even further after a recent rebound as structural deficits keep supporting prices, Goldman Sachs said. Brent has already recovered about half of the ground it lost as the emergence of the Omicron variant fueled concerns about oil demand.

"We therefore recommend investors re-engage some long positions, but caution that oil markets may see substantial increases in volatility and decreases in liquidity in coming weeks," it said.

Iron ore has become Morgan Stanley's top mined-commodities pick on a six-month horizon, citing an expected recovery in Chinese steel output following the Beijing Winter Olympics in February.

A recent slip in aluminum prices should give investors a good entry point to buy into that commodity as well in the coming months, supported by constrained Chinese supply, said Morgan Stanley.

"We also highlight nickel's strong demand story, supported by both stainless steel output and EVs, and supply risks in Indonesia." Coal and zinc are toward the bottom of its list of picks, given Beijing has intervened to boost coal supply and zinc is facing risks to demand.

Meantime, Citi expects a U-shaped swing in iron-ore prices in 2022 as an easing in Chinese credit will likely prompt a recovery in property starts and sales in the second half of 2022, following major declines in the first half. Citi said China already has plenty of iron ore sitting in stockpiles at its ports to meet upticks in demand.

"Steel mills' weak appetite for purchasing iron ore, owing to lower output and rising use of steel scrap, has resulted in 30-million-ton inventory builds at Chinese ports since July 2021."

Gold was flat in early European trade with investors focusing on upcoming U.S. inflation data due this week. Geopolitical tensions between the U.S. and Russia may help support demand for safe-haven assets like gold in the near term, Commerzbank said.




Robinhood's Stock Fizzles After Splashy Public Offering

It has been a rough few weeks for Robinhood Markets Inc.'s stock.

Shares of the retail-trading platform have tumbled lately and reached an all-time intraday low this week. Robinhood's stock has been trading for more than four weeks below its initial public offering price of $38 a share. It closed Wednesday at $23.72, a 38% decline from its IPO price and a 72% drop from its intraday high of $85 reached earlier this year.


Italy's UniCredit Unveils New Strategy as Restructuring Ends

ROME-UniCredit SpA said it plans to expand by hiring staff and investing in digitization as part of a three-year strategic plan that includes share buybacks and bigger dividends.

The plan, the first since Chief Executive Andrea Orceltook the helm in April, targets annual revenue growth of about 2% and profit growth of 10% through 2024.


Chinese Developer Kaisa Defaults, Fitch Says, as Industry's Debt Challenges Mount

Kaisa Group Holdings Ltd., which in 2015 became one of the first Chinese developers to default abroad, has defaulted again after not repaying a $400 million bond that came due this week, Fitch Ratings said.

Failures to repay investors are piling up in China's property sector, as real-estate companies buckle under the strain of falling home sales, government curbs on borrowing, and a bond-market selloff that has all but shut the market for new deals.


Uber Workers Would Be Classed as Employees Under EU Proposal

Uber Technologies Inc., Inc.-backed Deliveroo PLC and other gig-economy companies could be forced to give more benefits to their drivers and delivery personnel under a European Union proposal that would reclassify many of their jobs as employment.

The draft bill, proposed Thursday by the EU's executive arm, would establish a presumption that many of the companies in what is often called the gig economy actually employ workers, depending on the level of control the companies exercise over how workers perform their jobs. Until now, most such companies have deemed the majority of their workers to be independent contractors.


Amazon Fined $1.3 Billion in Italian Antitrust Case

Italy's antitrust regulator fined Inc. $1.3 billion for harming competitors by favoring third-party sellers that use the U.S. company's logistics services.

The fine of 1.13 billion euros comes as Amazon awaits the outcome of a similar investigation being carried out by the European Union. The EU last year separately filed antitrust charges against Amazon for allegedly using nonpublic data from third-party sellers to compete against them.


Senators Want Social-Media Apps to Share Research

A bipartisan group of U.S. senators plans to introduce legislation that would require Meta Platforms Inc. and other social-media companies to provide outside researchers with data access.

The bill, to be announced Thursday by Sens. Chris Coons (D., Del.) Rob Portman (R., Ohio) and Amy Klobuchar (D.,Minn.), would allow researchers to submit proposals to the National Science Foundation. If the NSF supports a proposal, social-media platforms would be required to furnish the needed data, subject to privacy protections that could include anonymizing it or "white rooms" in which researchers could review sensitive material.


SoundCloud Plans to Expand Free Services to Attract New Artists

SoundCloud Ltd., the music-streaming platform known for launching the careers of Billie Eilish, Post Malone and other artists, plans to offer additional services for free to attract more musicians to its platform, the company's chief financial officer said.


AstraZeneca Covid-19 Antibody Authorized by FDA as Novel Tool to Prevent Symptomatic Disease

The U.S. Food and Drug Administration authorized a preventive antibody combination from AstraZeneca PLC that has shown strong efficacy in reducing risk of symptomatic Covid-19, offering a first-of-its-kind alternative for a minority of people for whom vaccines are considered less effective.

The antibody cocktail, called Evusheld, is aimed primarily for use in a minority of adolescents and adults age 12 and older with moderate to severely compromised immune systems. That may be because they have cancer or another illness or take medications or undergo treatments such as chemotherapy that inhibit an immune response to Covid-19 vaccines, the FDA said in a statement.


Mambu Valued at $5.3 Billion in Investment Led by Private-Equity Firm EQT

A group led by private-equity company EQT AB is acquiring a minority stake in banking-software firm Mambu, a deal that values the financial-technology company at more than $5.3 billion, the companies said.

The investment is the latest bet on European technology providers that are taking advantage of the switch to digital-banking services by consumers and businesses.


Jobless Claims Are Stabilizing at Pre-Pandemic Levels

Worker filings for unemployment benefits are settling at pre-pandemic levels as a tight labor market keeps layoffs low.

Economists surveyed by The Wall Street Journal expect jobless claims, a proxy for layoffs, fell to 211,000 for the week ended Dec. 4 from 222,000 the previous week. The Labor Department will report last week's jobless claims figures on Thursday at 8:30 a.m. ET.


Market Can Weather Evergrande Crisis, China's Top Central Banker Says

Financial stress at China Evergrande Group and a few of its peers won't cause longer-term damage to the Hong Kong market, and broader problems with debt at Chinese property developers should be dealt with according to market principles, China's top central banker said.

Hong Kong-listed Evergrande, which is one of China's largest developers and has close to $20 billion in U.S. dollar bonds outstanding, didn't make overdue payments on some bonds before a final deadline Monday, potentially setting the stage for Asia's largest default. Fitch Ratings downgraded Evergrande and two key subsidiaries to a "restricted default" rating on Thursday, citing the missed coupon payments.


China Reopens a Funding Spigot for Property Developers

HONG KONG-Chinese regulators have quietly reopened an onshore funding spigot for the country's property developers, enabling some firms to tap into an obscure form of debt financing that helps pay their suppliers.

Over the past four years, real-estate developers from China Evergrande Group to Country Garden Holdings Co. were regular users of yuan-denominated debt instruments known in the industry as "supply chain asset-backed securities." Property firms were behind the equivalent of more than $38.6 billion in such bonds that were issued last year, according to Wind data, a huge jump from $12.4 billion in 2019. The actual totals are likely higher, because some deals from developers weren't classified as such.


China's Factory-Gate Inflation Softens in November

HONG KONG-China's factory-gate inflation ebbed in November after hitting a 26-year high, which economists say will give policy makers more room for easing to bolster a slowing economy.

The producer-price index rose 12.9% from a year earlier in November, down from 13.5% growth in October, which was the fastest increase since 1995, according to data released by the National Bureau of Statistics. The reading beats the 12% increase expected by economists polled by The Wall Street Journal.


Covid Spurs Biggest Rise in Life-Insurance Payouts in a Century

The Covid-19 pandemic last year drove the biggest increase in death benefits paid by U.S. life insurers since the 1918 influenza epidemic, an industry trade group said.

Death-benefit payments rose 15.4% in 2020 to $90.43 billion, mostly due to the pandemic, according to the American Council of Life Insurers. In 1918, payments surged 41%.


German Exports Rose in October, Beating Forecasts

German exports increased in October, beating forecasts and surpassing pre-pandemic levels.

Exports rose 4.1% on month in adjusted terms, statistics office Destatis said Thursday. Economists had forecast a 1.1% increase in adjusted terms, according to a poll by The Wall Street Journal.


U.S. Moves to Tighten Iran Sanctions Enforcement as Nuclear Talks Stall

The Biden administration is moving to tighten enforcement of sanctions against Iran, according to senior U.S. officials, the first sign of Washington increasing economic pressure on Tehran as diplomatic efforts to restore the 2015 nuclear deal falter.

According to senior State and Treasury Department officials, the U.S. will send a top-level delegation, including the head of Treasury's Office of Foreign Assets Control, Andrea Gacki, next week to the United Arab Emirates. The U.A.E. is a top U.S. ally but also Iran's second-largest trade partner and a conduit for Iran's trade and financial transactions with other countries.


Senate Passes Legislation Aimed at Blocking Biden's Covid-19 Vaccine Rules for Employers

WASHINGTON-The Senate approved legislation aimed at nullifying President Biden's vaccine-or-test mandate for private employers, marking a significant rebuke even if lawmakers ultimately fall short of stopping the new Covid-19 rule.

The measure passed 52-48, with Democratic Sens. Joe Manchin of West Virginia and Jon Tester of Montana joining all Republicans in supporting the bill.


Covid-19 Vaccine Rollout for Young Children Is Slow in Many States

Covid-19 vaccinations for children 5 to 11 years old are off to a slow start in many parts of the U.S., federal data show, underscoring the challenges health officials face in persuading parents to inoculate their children.

Roughly five million, or 18%, of the estimated 28.4 million U.S. children in the 5-to-11 age bracket have gotten at least one shot in the five weeks since they were cleared to get vaccinated, the data show. The picture varies by region, with rates in several New England states above 30% and some states in the South far off the national pace, an analysis by The Wall Street Journal of the data shows.


Olympics Boycott Expands to Include Diplomatic Officials From U.K., Canada

OTTAWA-The U.K. and Canada on Wednesday joined a widening diplomatic boycott of the 2022 Winter Olympics in Beijing, citing concerns over China's human rights record.

The U.S. said on Monday that it wouldn't send government officials to the Games, which are set to begin in February, although athletes will still be able to participate. The Biden administration had faced pressure to boycott the Olympic Games for months, but those calls intensified after Chinese tennis star Peng Shuai vanished from public view in November after making a public allegation of sexual assault against a retired Chinese official.




Empire 2Q

Transat A.T. 4Q

Transcontinental 4Q

Economic Indicators:

None scheduled

Stocks to Watch:

Kinross Announces Acquisition Of Great Bear Resources; Has Agreed to Upfront Payment of $1.4B Payable at Election of Great Bear Shareholders; Upfront Payment to Be Made in Cash and Kinross Common Shares;

Also Agreed to Contingent Consideration of About $46M; Contingent Consideration Is in the Form of Value Rights Exchangeable for 0.1330 Kinross Shrs Per Great Bear Shr; Contingent Consideration Payable in Connection With Gold Production at Dixie Project;

Boards of Both Companies Have Approved Deal; Great Bear Shareholders, Security Holders to Vote on Deal at Special Meeting Expected to Be Held in 1Q

Pembina Pipeline Looks to Raise C$1B in Bond Issuance; Offering Senior Unsecured Medium-Term Notes in Two Tranches;

Offering C$500M in Fixed-Coupon 3.53% Notes Maturing in 2031; Offering C$500M in Fixed-Coupon 4.49% Notes Maturing in 2051; Pembina to Use Proceeds of Notes Sale to Pay Down Debt, Meet General Needs; Expects to Conclude Bond Offering on Dec. 10

Rogers Communications Looks to Raise C$2B via Bond Sale; Selling 5.0% Fixed-To-Fixed Rate Subordinated Notes Due 2081;

Expects Net Proceeds of About C$1.98B From Notes Sale; Aims to Use Proceeds to Buy 3500 MHz Spectrum Licences It Was Awarded Earlier This Year; Notes Being Offered Exclusively to Residents in Canadian Province; Notes Sale to Close on Dec. 17


Expected Major Events for Thursday

00:01/UK: Nov RICS Residential Market Survey

01:01/UK: Nov KPMG and REC UK Report on Jobs

06:00/JPN: Nov Preliminary Machine Tool Orders

07:00/GER: 3Q Labour cost index

07:00/GER: Oct Foreign Trade

09:30/UK: 3Q Business Finance Review

11:00/FRA: Oct OECD Composite Leading Indicators

13:00/RUS: Weekly International Reserves

13:30/US: 12/04 Unemployment Insurance Weekly Claims Report - Initial Claims

13:30/US: U.S. Weekly Export Sales

14:45/US: Consumer Comfort Index

15:00/US: Oct Monthly Wholesale Trade

15:30/US: 12/03 EIA Weekly Natural Gas Storage Report

17:00/US: World Agricultural Supply & Demand Estimates (WASDE)

21:30/US: Federal Discount Window Borrowings

21:30/US: Foreign Central Bank Holdings

23:50/JPN: Nov Corporate Goods Price Index

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


Expected Earnings for Thursday

American Outdoor Brands Inc (AOUT) is expected to report for 2Q.

BMTC Group Inc (GBT.T) is expected to report for 3Q.

Bit Digital Inc (BTBT) is expected to report for 3Q.

Broadcom Inc (AVGO) is expected to report $4.55 for 4Q.

Chewy Inc (CHWY) is expected to report for 3Q.

Ciena Corp (CIEN) is expected to report $0.73 for 4Q.

Comtech Telecommunications Corp (CMTL) is expected to report $-0.21 for 1Q.

Costco Wholesale Corp (COST) is expected to report $2.60 for 1Q.

Cronos Group Inc (CRON,CRON.T) is expected to report $-0.10 for 3Q.

Eargo Inc (EAR) is expected to report for 3Q.

Empire Co (EMLAF,EMP.A.T) is expected to report for 2Q.

FP Newspapers (FP.V) is expected to report for 3Q.

Frequency Electronics (FEIM) is expected to report for 2Q.

Helix BioPharma (HBP.T,HBPCF) is expected to report $-0.02 for 4Q.

Hooker Furnishings Corp (HOFT) is expected to report $0.38 for 3Q.

Hormel Foods Corporation (HRL) is expected to report $0.51 for 4Q.

Hovnanian Enterprises Inc (HOV) is expected to report for 4Q.

Inscape Corp (INQ.T) is expected to report for 2Q.

J.W. Mays Inc (MAYS) is expected to report for 1Q.

KLX Energy Services Holdings Inc (KLXE) is expected to report for 3Q.

KalVista Pharmaceuticals Inc (KALV) is expected to report $-0.92 for 2Q.

Kaspien Holdings Inc (KSPN) is expected to report for 3Q.

Lakeland Industries (LAKE) is expected to report $0.34 for 3Q.

Lee Enterprises Inc (LEE) is expected to report for 4Q.

Leslie's Inc (LESL) is expected to report for 4Q.

Li-Cycle Holdings Corp (LICY) is expected to report for 4Q.

Liquidity Services (LQDT) is expected to report for 4Q.

Lululemon Athletica Inc (LULU) is expected to report $1.37 for 3Q.

Mesa Air Group Inc (MESA) is expected to report $-0.16 for 4Q.

Oracle Corp (ORCL) is expected to report $0.83 for 2Q.

SandRidge Mississippian Trust I (SDTTU) is expected to report for 3Q.

SeaChange International Inc (SEAC) is expected to report $-0.07 for 3Q.

Sigmatron International Inc (SGMA) is expected to report for 2Q.

Sprinklr Inc (CXM) is expected to report for 3Q.

Transat AT (TRZ.T) is expected to report $-3.04 for 4Q.

Transcontinental Inc - Class A (TCL.A.T,TCL.B.T,TCLAF) is expected to report $0.69 for 4Q.

Vail Resorts (MTN) is expected to report $-3.57 for 1Q.

Vince Holding Corp (VNCE) is expected to report for 3Q.

Waterloo Brewing Ltd (WBR.T) is expected to report for 3Q.

Powered by Kantar Media and Dow Jones.



AeroVironment Cut to Hold From Buy by Canaccord Genuity

American States Water Cut to Underweight From Equal-Weight by Barclays

Avid Bioservices Cut to Sector Weight From Overweight by Keybanc

Becton Dickinson Cut to Neutral From Overweight by Piper Sandler

Core & Main Cut to Neutral From Buy by Citigroup

Elastic Raised to Overweight From Neutral by JP Morgan

Essential Utilities Raised to Overweight From Equal-Weight by Barclays

Evercore Cut to Equal-Weight From Overweight by Morgan Stanley

Goodyear Tire Raised to Buy From Hold by Deutsche Bank

Honeywell Intl Cut to Neutral From Buy by B of A Securities

ITT Inc Raised to Buy From Neutral by B of A Securities

Kraft Heinz Cut to Neutral From Buy by Guggenheim

MFA Financial Raised to Outperform From Market Perform by Raymond James

Prometheus Biosciences Raised to Outperform From Perform by Oppenheimer

Pulmonx Raised to Overweight From Neutral by Piper Sandler

Stitch Fix Cut to In-Line From Outperform by Evercore ISI Group

Stitch Fix Cut to Sector Weight From Overweight by Keybanc

SVB Financial Raised to Overweight From Equal-Weight by Wells Fargo

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


(END) Dow Jones Newswires

December 09, 2021 06:15 ET (11:15 GMT)

Copyright (c) 2021 Dow Jones & Company, Inc.