MARKET WRAPS
Watch For:
S&P CoreLogic Case-Shiller Home Px Index for September;
Conference Board--Consumer Confidence for November; Canada GDP for
September; earnings from CrowdStrike, Hewlett Packard Enterprise,
Intuit, NetApp, Workday
Opening Call:
Today's Headlines/Must Reads
- China Stocks Rebound on Reopening Hopes, Help for Property
Sector
- China Property Stocks Rise as Regulators Step Up Support
- Musk's Apple Attack Sets Stage for Public Spat With Risks for
Apple, Twitter
- Yield Curve Inversion Reaches New Extremes
Follow WSJ markets coverage here .
Stock futures nudged higher premarket, suggesting a steady start
on Wall Street, as investors bet on a further loosening of Covid
restrictions in China following nationwide protests there that hit
global markets on Monday.
Risk appetite revived somewhat on Tuesday, led by a rebound in
Asian stocks after Chinese officials held a media briefing on
Tuesday on the country's pandemic-control policies.
During the briefing, authorities said "long-term restrictions
must be rectified and avoided." The comments likely eased market
concerns and confusion over Beijing's Covid-19 strategy.
"Once again, the easing of Covid-19 measures, at least the
expectation for it, is the market focus," said KGI Asia.
It maintained its expectation for a postpandemic reopening in
China in the first half of 2023.
Also on Tuesday, China's National Health Commission said it
would ramp up Covid vaccinations for the elderly, a move that may
allow less draconian restrictions to be imposed.
Stocks to Watch
Coinbase Global: Its shares added 2% off hours as the prices of
major cryptocurrencies drifted higher. Bitcoin rose 1.8% on Tuesday
from its 5 p.m. ET level on Monday to around $16,484.
Pinduoduo: The Chinese e-commerce company was on course for a
second day of gains, after reporting a strong set of quarterly
results on Monday. Its ADRs added nearly 5% premarket, while
counterpart JD.com advanced roughly 7%. Other China tech stocks
including NetEase and Baidu also rose.
Roku: Keybanc cut its rating of the stock, according to
Benzinga. The shares fell 3.2% premarket.
United Pacific Railway, United Parcel Service: Deutsche Bank
lifted its price targets for shares of both companies, according to
Benzinga. Shares of United Pacific added 1.3% premarket and UPS
stock gained 1.6% premarket.
Wynn Resorts: The stock added about 3% premarket. Reopening
hopes had earlier helped buoy Chinese stocks listed in Hong Kong
and mainland China.
Forex:
The dollar could rise this week as a speech by Jerome Powell and
the jobs report are likely to dent any speculation about interest
rates peaking soon, ING said.
Powell is expected to sound hawkish and job data to stay strong,
which "may cause the Fed's communicated and perceived narrative to
drift away from dovish pivot expectations," ING said.
The dollar could rise in anticipation of these events and the
DXY dollar index could reach 107.00-107.50 ahead of Powell's
speech, ING said.
---
Sterling could move in response to Bank of England Governor
Andrew Bailey's testimony before the Lords Economic Affairs
Committee at 10am ET on Tuesday, ING said.
"A significant shift in Bailey's policy rhetoric two weeks
before the BOE meeting appears unlikely, but the proximity to the
meeting also means that markets tend to over-interpret Monetary
Policy Committee members' comments," ING said.
The BOE is likely to raise interest rates 50 basis points at the
Dec. 15 meeting while markets are pricing in 57bp. GBP/USD could
fall into the end of 2022 as the dollar rises and the pound suffers
from a bleak U.K. economic outlook, ING said.
Energy:
Crude oil prices made gains of close to 2% in Europe on
increased speculation that China will rollback on Covid-19
regulations following protests in the country.
That said, oil markets are likely to be driven by the OPEC+
meeting on Sunday, according to Peak Trading Research.
"OPEC+ wants higher prices and a crude oil rally would be a
bullish macro tailwind for the whole commodity complex."
Further volatility could come from EU discussions over the
Russian oil price cap, Peak said.
Read Barrons.com Don't Expect Energy Stocks to Keep Gaining.
They Can't Ignore Falling Oil Prices Forever
Thermal Coal
Expect a bumpy ride in the thermal-coal market over the year
ahead, Goldman Sachs said.
For now, the market remains tight due to supply constraints in
Australia, while Europe's ban on Russian coal could deepen the
shortfall during the northern hemisphere winter when demand is
high.
However, in 2023, increased Indonesian and Chinese coal
production and demand destruction, combined with a potential
increase in gas supply, are likely to offset benefits from
coal-plant restarts in Western Europe, Goldman Sachs said.
"Bottom-line though, we see high price volatility as likely"
over the next 12 months, and the thermal-coal price is likely to be
lower than today in a year's time.
Metals:
Base metals and gold made solid gains in London trading, boosted
by improved sentiment over spending in China.
In Asia, the market had been "risk on," with the offshore yuan
strengthening, alongside Chinese equities for white goods also
rising, Marex said.
It added that demand for white goods has been driven by
real-estate strength amid new support for developers--one of the
biggest drivers for base metals.
"All this highlights that China is definitely not bearish, and
there have been continued expectations to support the economy,"
Marex said.
Market Insight
Commonwealth Bank of Australia said commodity markets are likely
to remain volatile until there is a clearer view on how China will
handle its Covid-19 policy going forward.
"It's too soon to rule out the risk of a return to China's
strict Covid-zero policy, especially in light of the protests
across China in recent days."
But that scenario is "the worst case" for China's economy and
commodity demand, and could create longer-run challenges for
policymakers to transition away from that zero-Covid approach, CBA
said.
TODAY'S TOP HEADLINES
Elon Musk's Apple Attack Sets Stage for Public Spat With Risks
for Apple, Twitter
Twitter Inc.'s new owner Elon Musk on Monday declared war
against Apple Inc. and a cornerstone of the iPhone business empire,
setting the stage for a potentially bruising battle between the
world's richest man and the world's most valuable company.
Apple and its Chief Executive Tim Cook have the ability to hold
great sway over Twitter's potential success, as the iPhone maker is
a major advertiser and tightly controls the software on its App
Store.
Kroger, Albertsons Expected to Defend Grocery Merger at Senate
Hearing
Chief executives of the two largest U.S. supermarket chains are
set to testify Tuesday at a Senate subcommittee hearing, where they
are expected to defend their companies' proposed $20 billion merger
and address questions about how it could affect American grocers
and consumers.
Kroger Co. CEO Rodney McMullen and Albertsons Cos. CEO Vivek
Sankaran are expected to testify before the Subcommittee on
Competition Policy, Antitrust and Consumer Rights, led by Sens. Amy
Klobuchar (D., Minn.) and Mike Lee (R., Utah).
Apple Has No Easy Road Out of China
Apple Inc.'s short-term problems depend on the patience of its
most lucrative iPhone buyers. Its long-term problems will require
the patience of a much larger constituency.
Growing unrest in China has affected production of Apple's
devices there. The company warned on Nov. 6 that Covid restrictions
at an assembly plant in Zhengzhou were resulting in significantly
reduced capacity for producing its iPhone 14 Pro and Pro Max
models. The situation has only grown worse since, as the lockdowns
have helped spark more protests across the country to a level
unseen in decades.
Crypto Exchange Kraken Settles Alleged Sanctions Violations
Cryptocurrency exchange Kraken has agreed to pay more than
$362,000 to settle allegations it violated U.S. sanctions against
Iran, the U.S. Treasury Department said Monday.
Kraken violated U.S. sanctions laws by failing to prevent users
in Iran from accessing its platform, which allowed them to conduct
transactions worth more than $1.68 million between October 2015 and
June 2019, the Treasury Department's Office of Foreign Assets
Control said.
China Property Stocks Rise as Regulators Step Up Support
Chinese property developers are up in early Tuesday trade after
regulators stepped up support for the embattled sector with some
measures aimed at broadening equity-financing channels.
Country Garden Services Holdings Co. rises 16%, Country Garden
Holdings Co. jumps 8.6% and Longfor Group Holdings Ltd. advances
8.0% in morning trade.
Yield Curve Inversion Reaches New Extremes
Yields on longer-term U.S. Treasurys have fallen further below
those on short-term bonds than at any time in decades, a sign that
investors think the Federal Reserve is close to winning its
inflation battle regardless of the cost to economic activity.
A scenario in which short-term yields exceed long-term yields is
known on Wall Street as an inverted yield curve and is often seen
as a red flag that a recession is looming.
Tech Selloff Catches Up With Private Startups
Tech startups are plunging in value in private trades, mirroring
the big markdowns of their publicly listed brethren over the past
year.
Before companies go public, their shares are often traded by
employees, founders and institutions in secondary deals. The trades
allow existing holders to cash out before a startup goes public,
and buyers to make new investments or add to existing holdings.
Chinese Startups Try to Make It Big in the U.S.-but Without the
Backlash
As U.S.-China ties fray and decoupling trends rise, dozens of
Chinese startups are going against the tide, seeking ways to expand
into the U.S. and other international markets.
Many are driven in part by China's slowing economy and toughened
regulatory environment as well as the uncertainty of the zero-Covid
policy, which in recent days sparked one of the largest nationwide
protests that China has seen in decades. Others are inspired by the
enormous global success of companies like TikTok owner ByteDance
Ltd. and fast-fashion retailer Shein.
Biden Calls on Congress to Pass Legislation to Avert Rail
Shutdown
WASHINGTON-President Biden called on Congress to pass
legislation that would avert a rail shutdown by imposing a proposed
contract that members at four railroad unions had rejected.
The move would cut short a long-running labor dispute between
the country's biggest freight railroads and more than 115,000
workers that threatens to hurt the economy and disrupt the flow of
goods as soon as next week.
Supreme Court Considers Challenge to Biden Policy Curbing
Immigration Arrests
WASHINGTON-The Supreme Court on Tuesday will consider the
executive branch's power to set priorities in enforcing immigration
law, in a case that also tests the legal standing of states to
bring their policy differences with Washington to court.
Last year, Texas and Louisiana sued to invalidate enforcement
guidelines, issued by Homeland Security Secretary Alejandro
Mayorkas, that prioritize the deportation of those immigrants
illegally in the country who pose an imminent threat to national
security or public safety. That approach replaced Trump-era
policies that sought to have immigration officers remove any
noncitizen present illegally.
U.S., Iran Face Off in World Cup Amid Growing Political
Hostility
As the U.S. and Iran prepare to face off in a must-win match at
the soccer World Cup in Qatar on Tuesday, tensions off the field
have raised the stakes in what is turning out to be one of the most
politically charged games in the tournament's recent history.
Iran has already called foul after the U.S. Soccer Federation
posted a small graphic of the World Cup standings on its Instagram
account in which the emblem in the center of the Islamic Republic's
flag had been removed. The federation said the move was to show
solidarity with a monthslong human-rights movement sweeping across
Iran, but it later deleted the post. A State Department
spokesperson said that the agency wasn't involved in either
decision.
Ukraine War's Economic Ripples Sow Discord Between Washington,
Allies
WASHINGTON-Trans-Atlantic ties are starting to fray as French
President Emmanuel Macron and other European leaders chafe at new
U.S. policies they say compound economic woes fueled by the war in
Ukraine and the resulting energy crisis.
Russia's war in Ukraine has reinvigorated the North Atlantic
Treaty Organization and ignited a boom in trade and investment
between the U.S. and Europe. But after nearly a year of unity as
the U.S. and its allies confronted the fallout from Russian
President Vladimir Putin's invasion of Ukraine, European officials
are starting to express frustration at their increasing reliance on
Washington for security and economic stability.
Mike Pence Says Donald Trump Should Apologize for Dinner With
Nick Fuentes, Kanye West
WASHINGTON-Donald Trump should apologize for having dinner with
white nationalist Nick Fuentes and Kanye West, former Vice
President Mike Pence said, adding to fellow Republicans' criticism
of the meeting just as Mr. Trump is attempting to ramp up a third
presidential bid.
"President Trump was wrong to give a white nationalist, an
anti-Semite and a Holocaust denier a seat at the table, and I think
he should apologize for it," Mr. Pence said Monday in an interview
with NewsNation. "He should denounce those individuals and their
hateful rhetoric without qualification."
Write to paul.larkins@dowjones.com TODAY IN CANADA
Earnings:
Bank of Nova Scotia 4Q
Shaw Communications 4Q
Economic Indicators (ET):
0830 Sep GDP
0830 3Q Quarterly GDP
Stocks to Watch:
Organigram FY22 Rev C$145.8M Vs. C$79.2M; Expects Fiscal 2023
Rev to Be Higher on Yr Amid Solid Sales Momentum, Stronger
Forecasted Market Growth
Expected Major Events for Tuesday
00:30/JPN: Oct Detailed Import & Export Statistics
09:00/ITA: Sep Industrial turnover & orders
09:00/GER: Nov Bavaria CPI
09:00/GER: Nov Hesse CPI
09:00/GER: Nov Baden-Wuerttemberg CPI
09:00/GER: Nov Brandenburg CPI
09:30/GER: Nov North Rhine Westphalia CPI
09:30/UK: Oct Money and Credit - Lending to Individuals, Lending
to Businesses, Broad Money and Credit
09:30/UK: Oct Monetary & Financial Statistics
09:30/UK: Oct Bank of England effective interest rates
10:00/ITA: Oct PPI
10:00/GER: Nov Saxony CPI
13:00/GER: Nov Provisional CPI
13:30/CAN: Sep GDP
13:30/CAN: 3Q Quarterly GDP
13:55/US: 11/26 Johnson Redbook Retail Sales Index
14:00/US: 3Q U.S. Quarterly House Price Index
14:00/US: Sep U.S. Monthly House Price Index
14:00/US: Sep S&P CoreLogic Case-Shiller Indices
15:00/US: Nov Consumer Confidence Index
21:30/US: 11/25 API Weekly Statistical Bulletin
23:50/JPN: Oct Preliminary Industrial Production
All times in GMT. Powered by Onclusive and Dow Jones.
Expected Earnings for Tuesday
Bank of Nova Scotia (BNS,BNS.T) is expected to report $2.00 for
4Q.
California First Leasing Corp (CFNB) is expected to report for
1Q.
Cenntro Electric Group Ltd (CENN) is expected to report for
3Q.
Cerence Inc (CRNC) is expected to report for 4Q.
Citi Trends Inc (CTRN) is expected to report $0.43 for 3Q.
Compass Minerals International Inc (CMP) is expected to report
$-0.27 for 4Q.
CrowdStrike Holdings Inc (CRWD) is expected to report for
3Q.
Emcore (EMKR) is expected to report $-0.20 for 4Q.
Exco Technologies (XTC.T) is expected to report $0.29 for
4Q.
FTI Consulting (FCN) is expected to report $1.32 for 4Q.
Hewlett Packard Enterprise Co (HPE) is expected to report $0.37
for 4Q.
Hibbett Inc (HIBB) is expected to report $2.50 for 3Q.
Intuit Inc (INTU) is expected to report $-0.40 for 1Q.
NetApp Inc (NTAP) is expected to report $1.05 for 2Q.
Orvana Minerals (ORV.T,ORVMF) is expected to report for 4Q.
Qualstar Corp (QBAK) is expected to report for 3Q.
Shaw Communications Inc - Class B (SJR,SJR.A.V,SJR.B.T) is
expected to report $0.33 for 4Q.
Smart Share Global Ltd - ADR (EM) is expected to report for
3Q.
Webco Industries Inc (WEBC) is expected to report for 1Q.
Workday Inc (WDAY) is expected to report $-0.36 for 3Q.
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ANALYST RATINGS ACTIONS
Activision Blizzard Raised to Buy From Hold by Truist
Securities
Activision Blizzard Raised to Overweight From Equal-Weight by
Morgan Stanley
Activision Blizzard Raised to Overweight From Equal-Weight by
Wells Fargo
Affiliated Managers Raised to Buy From Hold by Jefferies
Amazon Is a Top Stock Pick for Next Year, Says J.P. Morgan --
Barrons.com
Applovin Cut to Equal-Weight From Overweight by Morgan
Stanley
Aptiv Cut to Equal-Weight From Overweight by Morgan Stanley
Beyond Meat Cut to Underweight From Equal-Weight by Barclays
BorgWarner Raised to Equal-Weight From Underweight by Morgan
Stanley
Cloudflare Raised to Neutral From Underweight by JP Morgan
Coherent Raised to Buy From Hold by Deutsche Bank
Diamondback Energy Cut to Underperform From Neutral by B of A
Securities
DraftKings Cut to Underweight From Neutral by JP Morgan
First Solar Cut to Neutral From Overweight by JP Morgan
Imago BioSciences Cut to Hold From Buy by Stifel
Live Nation Raised to Buy From Neutral by Citigroup
Penn National Gaming Cut to Neutral From Overweight by JP
Morgan
PerkinElmer Raised to Equal-Weight From Underweight by
Barclays
SciPlay Cut to Hold From Buy by Truist Securities
Shutterstock Cut to Market Perform From Market Outperform by JMP
Securities
TransDigm Cut to Equal-Weight From Overweight by Wells Fargo
Twilio Cut to Hold From Buy by Jefferies
Tyson Foods Cut to Underweight From Equal-Weight by Barclays
Williams-Sonoma Cut to Underweight From Equal-Weight by Morgan
Stanley
Wynn Resorts Raised to Overweight From Neutral by JP Morgan
This article is a text version of a Wall Street Journal
newsletter published earlier today.
(END) Dow Jones Newswires
November 29, 2022 06:01 ET (11:01 GMT)
Copyright (c) 2022 Dow Jones & Company, Inc.