MARKET WRAPS

Watch For:

Conference Board's Employment Trends Index for January; earnings from Tyson Foods, Activision Blizzard, Take-Two Interactive Software, Pinterest.

Today's Headlines/Must Reads

- China Rebukes U.S. for Taking Down Its Balloon

- Upbeat Economic Data Keep Investors on Edge About Fed

- Banks Borrow Unsecured Cash at Record Clip

- U.S. Weighs Sanctions for Chinese Firms Over Iran Surveillance Buildup

- Chevron Explores Algerian Gas Plans Amid Russian Sanctions

- Newmont Proposes $17 Billion Takeover of Australia's Newcrest Mining

- Public Storage Bids for Rival in Unsolicited $11 Billion Offer

- Carlyle to Name Banking Veteran Harvey Schwartz as CEO

Follow WSJ markets coverage here .

Opening Call:

Stock futures pointed to further losses for Wall Street on Monday, after the unexpectedly strong jobs report renewed worries about how high the Federal Reserve will have to take interest rates.

"On the one hand, a resilient labor market could buttress households' willingness and ability to continue consuming and therefore support corporate earnings and equities over the near term," BCA Research said.

But longer-term implications are more dire--if a second wave of inflation is triggered, the Fed would have to act more forcefully, perhaps leading to a deep recession, BCA Research said.

Traders also were reacting to the political rift between the U.S. and China after Joe Biden ordered a balloon to be shot down. China has said the balloon was to monitor the weather, not for spying, and had been blown off course.

The Hang Seng dropped 2% on Monday, with China's Shanghai Composite also lower.

Stocks to Watch

Dell will join the ranks of technology companies slashing jobs as the computer maker will shed 6,650 positions, according to a Bloomberg report on Monday, which cited a company spokesman after seeing a memo.

Jeff Clarke, co-chief operating officer, told employees that the current conditions will "continue to erode with an uncertain future."

The job cuts amount to 5% of its workforce, the report said.

Other Movers

Comera Life Sciences said its stockholders, including some board members, can sell up to 7.2 million shares of common stock in the company from time to time. Its stock rose 5% in after-hours trading.

Jiuzi told the SEC it doesn't intend to proceed with the resale of ordinary shares registered in its statement from Dec. 30, 2021. Its stock jumped 26% in after-hours trading.

Newmont made a $17 billion, all-stock offer to buy Australia's Newcrest Mining. Newmont shares fell 6% premarket.

RH on Friday said it has restated per-share earnings results spanning the last three quarters after identifying errors in its original calculations. Its shares fell 3% in after-hours trading.

Forex:

The dollar continues to gain after Friday's much stronger-than-expected jobs data, reaching its highest in nearly four weeks against a basket of currencies as the U.S. economy looks more resilient and more rate rises look likely, MUFG said.

"Market participants have moved to price in a higher probability of the Fed delivering at least two more 25bps hikes before pausing their hiking cycle," MUFG said.

U.S. rate markets have scaled back expectations for rate cuts beginning later this year, and thus the dollar has reversed most of its losses sustained since the start of the year, MUFG said.

However, MUFG said the currency's strength may not be sustained.

"We do not expect the dollar's recent rebound to be the start of a more sustained upward trend. The underlying trend for job growth is still slowing but not fast enough to make the Fed comfortable over upside risks to inflation from the tight labour market."

In the week ahead, market participants will be watching to see how Fed officials react to the better data releases, MUFG said.

Bonds:

Bond markets are off to a strong start in 2023, running with the downward inflation trend in the U.S., J.P.Morgan Asset Management said.

"As a result, bond demand has picked up and government bond yields have rallied."

This has benefited JPM AM's preference for adding U.S. duration at the beginning of the year, it said, adding that, in the near term, inflation, wage and economic growth data may keep government bond yields range bound.

"Ultimately, we prefer to remain structurally long U.S. duration as we continue to see a 60% chance of the market pricing in a recession later this year."

Energy:

Oil prices were higher in Europe after an EU ban on Russian refined products and a G-7 price cap on those products came into force on Sunday.

The caps prevent shipping and insurance firms from trading Russian refined products unless they are below a cap of $100 a barrel for gasoline, diesel and jet fuel and $45 a barrel for naphtha and fuel oil. The measures have been well-flagged and Europe has built up strong stockpiles in recent weeks, limiting the measures' hit on prices.

"EU buyers have had time to prepare for the ban," ING said.

Read Russia Sanctions Challenge Tight U.S. Diesel Market

Read Oil Industry's Windfall Fails to Excite Wall Street

Metals:

Base metals prices were mixed, while gold was higher, with the dollar still rising after the strong jobs report, hitting risk commodities.

"Any macro disappointment could lead to a short-term price correction before seeing a sustained rise in prices," ANZ said, in reference to industrial metals. It said gold is likely to face headwinds for similar reasons.

TODAY'S TOP HEADLINES

Disney, Pepsi, Uber Set to Report During Lackluster Earnings Season

PepsiCo Inc., Uber Technologies Inc. and Walt Disney Co. are among the companies slated to report earnings in the coming week, during an earnings season marked by cooling demand and throttled profits.

Investors will also hear from the food makers Kellogg Co. and Tyson Foods Inc., the healthcare companies CVS Health Corp. and AbbVie Inc., as well as the private-equity firms KKR & Co. and Apollo Global Management Inc. Other companies reporting earnings include PayPal Holdings Inc., S&P Global Inc. and Chipotle Mexican Grill Inc.

Chevron Explores Algerian Gas Plans Amid Russian Sanctions

Oil giant Chevron Corp. is looking to seal an energy exploration deal with Algeria, as the North African country steps up efforts to replace sanctioned Russian supplies in nearby Europe, according to people familiar with the matter.

Over the past decade, U.S. companies have pulled back from operations in oil-and-gas-rich Middle Eastern and African countries they viewed as politically risky to focus on booming shale production at home.

Newmont Proposes $17 Billion Takeover of Australia's Newcrest Mining

ADELAIDE, Australia-Newmont Corp. has made a roughly $17 billion offer to acquire Australia's Newcrest Mining Ltd., aiming to seal one of the biggest deals for a global gold miner as the industry struggles to make large new discoveries of the precious metal.

Newmont, based in Colorado and one of the world's largest producers of gold, submitted a conditional and nonbinding indicative proposal to acquire Newcrest, Australia's largest listed gold producer. Newmont said it would offer 0.380 of its own shares for each Newcrest share held.

Public Storage Bids for Rival in Unsolicited $11 Billion Offer

Public Storage has made an $11 billion unsolicited offer for Life Storage Inc., ramping up an effort to buy its smaller rival after an earlier bid was rejected.

Public Storage said it sent a letter to Life Storage's management on Sunday detailing its all-stock proposal, worth about $129 a share, confirming an earlier report by The Wall Street Journal. Life Storage shares closed Friday at $110.58.

Carlyle to Name Banking Veteran Harvey Schwartz as CEO

Carlyle Group Inc. plans to name investment-banking veteran Harvey Schwartz its new chief executive, according to people familiar with the matter, as the private-equity firm's founders seek a fresh start after a botched succession plan.

Carlyle is expected to unveil on Monday the appointment of Mr. Schwartz, who most recently served as co-president of Goldman Sachs Group Inc., the people said. He spent more than two decades at the bank, building and leading various businesses.

Judge Releases Decision Approving Meta's Virtual-Reality Deal

WASHINGTON-A judge has made public his decision that allowed Meta Platforms Inc. to acquire a virtual-reality startup, providing new details on why he ruled against the Federal Trade Commission in its high-profile antitrust case against the Facebook parent company.

The ruling, which was initially sealed and was released late Friday, rejected the FTC's arguments for why Meta's acquisition of Within Unlimited was anticompetitive. But the judge sided with the FTC on some legal and factual arguments, bolstering the agency's ability to bring similar cases in the future, some antitrust lawyers said.

Paramount Reveals Plan to Remake Showtime in the Image of 'Yellowstone'

Showtime is producing a wave of spinoffs and expansions for "Billions" and "Dexter," two of its sturdiest hits, the network says. The premium cable brand is reshaping its TV slate with the same mold that turned "Yellowstone" into a sprawling franchise for parent company Paramount Global.

Showtime says it's planning up to four series connected to "Billions," the network's long-running high-finance drama, starting with a spinoff set in Miami, plus other iterations being developed under the titles "Millions" and "Trillions."

Oil Industry's Windfall Fails to Excite Wall Street

Oil companies delivered the market's best shareholder returns last year, but Wall Street is still wary.

The biggest Western oil companies, Exxon Mobil Corp., Chevron Corp. and Shell PLC, together cleared a record of more than $132 billion in annual profit in 2022 and handed investors $78 billion via share buybacks and dividends, about 50% more than the last time oil topped $100 a barrel in 2014.

For Elon Musk, Two Cases About His Tweets, and Two Victories

Twice Elon Musk has faced a jury over remarks he has made on Twitter. And twice a jury has vindicated him.

The latest victory came Friday when a federal jury ruled in his favor in a securities-fraud lawsuit in which investors alleged they felt misled into losing money after his 2018 tweets claimed to have "funding secured" to take Tesla Inc. private. Shares rose on the news, then fell in the days after as it became clear he didn't have such a deal for the car maker finalized.

Southwest Airlines to Reduce Minimum Requirements for Aspiring Pilots

Southwest Airlines Co. is reducing the number of hours prospective pilots must have spent flying jets and other turbine-powered aircraft, as the carrier looks to increase hiring.

Southwest had required applicants to have spent at least 1,000 hours flying such aircraft. It will now consider pilots with less of that type of experience, and said it would list 500 hours of "turbine time" as a preferred qualification. The change is set to go into effect Feb. 7, according to a message the airline sent to pilots this week.

Upbeat Economic Data Keep Investors on Edge About Fed

The U.S. labor market remains incredibly strong. Investors can't decide if that is a good or bad thing.

At first glance, Friday's jobs report seemed to have very little for money managers to dislike. The U.S. economy added a whopping 517,000 jobs in January, while the unemployment rate fell to its lowest level since 1969, according to Labor Department data.

Banks Borrow Unsecured Cash at Record Clip While Deposits Flee

Banks were chasing away deposits during the depths of the pandemic. Now, some are paying higher rates to shore up cash.

Borrowing in the federal-funds market hit $120 billion on Jan. 27, the highest one-day total in Federal Reserve data going back to 2016. Activity in fed funds-used by banks and government-backed lenders to exchange cash reserves parked at the Fed-surged throughout the past year when the central bank raised interest rates at the fastest pace in decades.

U.S. Weighs Sanctions for Chinese Companies Over Iran Surveillance Buildup

The U.S. is considering new sanctions on Chinese surveillance companies over sales to Iran's security forces, officials familiar with the deliberations said, as Iranian authorities increasingly rely on the technology to crack down on protests.

U.S. authorities are in advanced discussions on the sanctions, according to the officials, and have zeroed in on Tiandy Technologies Co., a surveillance-equipment maker based in the eastern Chinese city of Tianjin whose products have been sold to units of Iran's Islamic Revolutionary Guard Corps, a hard-line paramilitary group.

Russia Sanctions Challenge Tight U.S. Diesel Market

U.S. fuel markets held steady in December after Western sanctions on Russian crude reshuffled global oil shipments. New restrictions that take effect Sunday could prove more complicated.

The measures, which target most of Russia's refined petroleum products, threaten to take supplies off the market as the country looks for new trading partners. Any confusion could buoy prices for diesel and other fuels that have remained stubbornly high since the Kremlin launched its invasion of Ukraine last year.

Stock Funds Rose 7.8% in January

That's more like it.

Stock funds posted a positive January as the market advanced, a respite for investors who endured a brutal, inflation-racked 2022 for both stocks and bonds. Though most people's 401(k) statements are still too ugly to read (at least as far as recent performance) it is a hopeful start to the new year.

States Are Flush With Cash, Which Could Soften a Possible Recession

State governments are entering 2023 with record-high reserves, which could help the overall economy weather a recession this year.

The rapid economic recovery from the pandemic combined with an influx of federal stimulus money has filled public coffers, allowing governments to squirrel funds away for emergencies.

The Retreat of the Amateur Investors

Amateur trader Omar Ghias says he amassed roughly $1.5 million as stocks surged during the early part of the pandemic, gripped by a speculative fervor that cascaded across all markets.

As his gains swelled, so did his spending on everything from sports betting and bars to luxury cars. He says he also borrowed heavily to amplify his positions.

What CEOs Are Saying: 2023 'Is the Year of Efficiency'

Here is what some of the world's corporate leaders said this week about business and consumer spending, the supply chain and other topics.

January's Hiring Boom Caught Economists by Surprise. Why Forecasts Often Miss the Mark.

January's surge in hiring caught economists off guard.

The Labor Department reported Friday that employers added 517,000 jobs to payrolls in January, after accounting for seasonal movement, driven by increases in most industries, including restaurants and healthcare.

China Rebukes U.S. for Taking Down Its Balloon

BEIJING-China's vice foreign minister lodged strong criticism of the U.S. decision to shoot down a suspected surveillance balloon over the weekend, calling it an indiscriminate use of force that would further damage U.S.-China relations.

Vice Foreign Minister Xie Feng delivered the rebuke to the U.S. Embassy in Beijing on Sunday, according to a statement published Monday by the Chinese Foreign Ministry. The statement reiterated China's position that the balloon was an unmanned civilian aircraft that had drifted off course.

Billionaire Charles Koch-Backed Group Will Push GOP to Move Past Donald Trump

WASHINGTON-A group funded by billionaire Charles Koch will work to support a Republican presidential nominee other than Donald Trump, concluding in a strategy memo that "we need to turn the page on the past."

The organization, Americans for Prosperity, has stayed out of the last two presidential cycles but has concluded it needs to engage now as Mr. Trump mounts his third consecutive White House run. The memo released Sunday doesn't mention the former president by name but is unambiguous in its purpose.

Classified-Documents Probe Highlights Biden Family's Deep Ties to Penn

The discovery of classified documents from Joe Biden's vice presidency at a foreign-relations think tank might have surprised many in the country. The fact that the think tank was run by the University of Pennsylvania and bore the president's name shouldn't have.

For decades, the Ivy League school and the Biden family, across generations, have fostered close relations to their mutual benefit. Those benefits extend beyond the Penn Biden Center for Diplomacy and Global Engagement, where the documents were discovered in November.

Biden Prepares for State of the Union Speech as China Tensions, Job Gains Take Center Stage

WASHINGTON-President Biden will give the State of the Union address before a newly divided Congress on Tuesday, hoping to build off positive economic signs but facing fresh tensions with China and the lingering war in Ukraine.

Following the speech, Mr. Biden will travel on Wednesday to Wisconsin, a 2024 presidential battleground, and tout union jobs during a visit to Madison. On Thursday he is scheduled to visit Florida-the home of two potential 2024 GOP rivals, former President Donald Trump and Gov. Ron DeSantis-to highlight plans to strengthen Social Security and Medicare and reduce healthcare costs, the White House said. On Friday he will discuss his economic agenda with the nation's governors and meet with Brazilian President Luiz Inácio Lula da Silva.

Hong Kong Opposition in Court as Landmark National-Security Trial Opens

HONG KONG-Sixteen pro-democracy figures went on trial Monday in a landmark case in Hong Kong's crackdown on political dissent, drawing global scrutiny as the city's government launches a marketing blitz to restore the financial hub's allure to global business and tourists.

The arrests of the 16 in January 2021, part of a larger roundup that snared dozens of the city's most prominent politicians and activists and effectively snuffed out legislative opposition in the city, drew condemnation and sanctions from Washington and its allies. Most of the 47 people charged in the case have been held in prison for more than two years.

Moscow, Tehran Advance Plans for Iranian-Designed Drone Facility in Russia

Moscow and Tehran are moving ahead with plans to build a new factory in Russia that could make at least 6,000 Iranian-designed drones for the war in Ukraine, the latest sign of deepening cooperation between the two nations, said officials from a country aligned with the U.S.

As part of their emerging military alliance, the officials said, a high-level Iranian delegation flew to Russia in early January to visit the planned site for the factory and hammer out details to get the project up-and-running. The two countries are aiming to build a faster drone that could pose new challenges for Ukrainian air defenses, the officials said.

Ukraine Warns Russia Is Planning Major Offensive as Kyiv Shakes Up Military Leadership

DNIPRO, Ukraine-Ukraine warned that Russia was completing preparations for a major new offensive this month as Kyiv signaled a reshuffle in its military leadership amid a corruption scandal that has rocked the Defense Ministry.

Serhiy Haidai, the governor of the Luhansk region in eastern Ukraine, said Russia was continuing to bolster its offensive capacity and bring in troops to front line positions while decreasing its rate of fire in certain areas to save ammunition for the coming advance.

More Russian Migrants Enter U.S. as Exceptions for Asylum Seekers Expand

More Russian migrants are traveling through Mexico to seek asylum in the U.S., driven in part by an expanding U.S. government effort to allow more asylum seekers to cross the border legally.

About 12,500 Russians entered the U.S. through ports of entry with Mexico between October, the start of the government's budget year, and December. Most are expected to ask for asylum once they settle in the U.S., often citing government crackdowns since the start of the war in Ukraine and the mobilization announced in September to draft more troops.

Write to paul.larkins@dowjones.com TODAY IN CANADA

Earnings:

Coveo Solutions 3Q

Finning Intl 4Q

PrairieSky Royalty 4Q

TFI Intl 4Q

TMX 4Q

Economic Calendar (ET):

1000 Jan Ivey Purchasing Managers Index

Stocks to Watch:

BBTV Holdings Signs $16M Term Loan Agreement WIth MEP Capital Holdings; $10M of Term Loan Committed, About $6M Conditional on 1H Performance Target; BBTV to Use Loan for Working Cap, Pay out CAD Overdraft Facility With Chartered Bank

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Draganfly Signs Strategic Agreement With Remote Sensing Instruments to Make Drones for Indian Market

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International Petroleum to Acquire Cor4 Oil in Canada for $62 Million; Acquisition Includes Total Proved Plus Probable Reserves of 15.9M Barrels of Oil Equivalent as of Dec. 31, 2022; Assets to Be Acquired Have Forecast Average Net Production of Around 4,000 Barrels of Oil Equivalent a Day for 2023; Acquisition Is Expected to Complete by the End of 1Q 2023

Expected Major Events for Monday

02:00/JPN: Jan Imported Vehicle Sales

07:00/GER: Dec Manufacturing orders

07:00/GER: Dec Manufacturing turnover

09:00/UK: Jan UK monthly car registrations figures

09:30/UK: Jan S&P Global / CIPS UK Construction PMI

15:00/CAN: Jan Ivey Purchasing Managers Index

15:00/US: Jan Employment Trends Index

23:30/JPN: Dec Household Spending

23:50/JPN: Jan International Reserves / Foreign Currency

23:50/JPN: Jan Provisional Trade Statistics for 1st 20 days of Month

All times in GMT. Powered by Onclusive and Dow Jones.

Expected Earnings for Monday

Activision Blizzard (ATVI) is expected to report $0.90 for 4Q.

Affiliated Managers Group Inc (AMG) is expected to report $5.60 for 4Q.

Alico (ALCO) is expected to report for 1Q.

Arrowhead Pharmaceuticals Inc (ARWR) is expected to report $-0.15 for 1Q.

Art's Way Manufacturing (ARTW) is expected to report for 4Q.

BellRing Brands Inc (BRBR) is expected to report for 1Q.

CF Bankshares Inc (CFBK) is expected to report for 4Q.

CNA Financial Corp (CNA) is expected to report $0.95 for 4Q.

Cerence Inc (CRNC) is expected to report for 1Q.

Coffee Holding Co (JVA) is expected to report for 4Q.

Cummins Inc (CMI) is expected to report $4.76 for 4Q.

Daseke Inc (DSKE) is expected to report $0.07 for 4Q.

Enact Holdings Inc (ACT) is expected to report for 4Q.

Energizer Holdings Inc (ENR) is expected to report $0.76 for 1Q.

Enterprise Group (E.T) is expected to report for 4Q.

Farmers & Merchants Bancorp Inc (FMAO) is expected to report for 4Q.

Fastenal Co (FAST) is expected to report.

Flexsteel Industries Inc (FLXS) is expected to report $0.03 for 2Q.

Genworth Financial Inc (GNW) is expected to report $0.22 for 4Q.

Gladstone Capital Corp (GLAD) is expected to report $0.24 for 1Q.

Graham Corp (GHM) is expected to report $0.16 for 3Q.

Idexx Laboratories Inc (IDXX) is expected to report $1.94 for 4Q.

Loews Corp (L) is expected to report for 4Q.

Mesa Labs (MLAB) is expected to report $0.03 for 3Q.

MexcoEnergy (MXC) is expected to report for 3Q.

NAPCO Security Technologies Inc (NSSC) is expected to report $0.14 for 2Q.

NOV Inc (NOV) is expected to report for 4Q.

Neurocrine Biosciences Inc (NBIX) is expected to report $1.08 for 4Q.

Nicholas Financial (NICK) is expected to report for 3Q.

ON Semiconductor Corp (ON) is expected to report $1.23 for 4Q.

PetMed Express (PETS) is expected to report $0.20 for 3Q.

Pinterest Inc (PINS) is expected to report for 4Q.

Power Integrations (POWI) is expected to report $0.36 for 4Q.

Security Federal Corp (SFDL) is expected to report for 4Q.

Skyline Champion Corp (SKY) is expected to report $0.98 for 3Q.

Skyworks Solutions Inc (SWKS) is expected to report $2.05 for 1Q.

Sonnet BioTherapeutics Holdings Inc (SONN) is expected to report for 1Q.

Timken Co (TKR) is expected to report for 4Q.

Tyson Foods (TSN) is expected to report $1.50 for 1Q.

United States Lime & Minerals Inc (USLM) is expected to report for 4Q.

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ANALYST RATINGS ACTIONS

Align Technology Raised to Neutral From Sell by Goldman Sachs

Aptiv Cut to Peer Perform From Outperform by Wolfe Research

Bill.com Holdings Cut to Market Perform From Outperform by BMO Capital

Bill.com Holdings Cut to Neutral From Buy by BTIG

Bill.com Holdings Cut to Neutral From Outperform by SMBC Nikko

Boeing Cut to Sector Perform From Outperform by RBC Capital

Boyd Gaming Raised to Buy From Hold by CBRE

Camden Property Trust Cut to Neutral From Overweight by Piper Sandler

Cardinal Health Raised to Outperform From Neutral by Baird

CH Robinson Worldwide Cut to Hold From Buy by Stifel

Cognizant Tech Solutions Cut to Neutral From Outperform by Baird

ConocoPhillips Cut to Equal-Weight From Overweight by Capital One

Cyteir Therapeutics Cut to Underweight From Equal-Weight by Morgan Stanley

Erasca Raised to Overweight From Equal-Weight by Morgan Stanley

Esperion Therapeutics Raised to Equal-Weight From Underweight by Morgan Stanley

First Foundation Cut to Neutral From Overweight by Piper Sandler

Focus Financial Partners Cut to Market Perform From Outperform by BMO Capital

Generac Cut to Neutral From Buy by Guggenheim

HB Fuller Raised to Buy From Neutral by Citigroup

Hexcel Cut to Neutral From Buy by B of A Securities

Hilton Grand Vacations Cut to Hold From Buy by Jefferies

Immuneering Cut to Underweight From Equal-Weight by Morgan Stanley

International Paper Raised to Neutral From Sell by UBS

MACOM Technology Cut to Market Perform From Outperform by Northland Capital Markets

Meta Platforms Cut to Reduce From Hold by HSBC

Minerals Technologies Cut to Neutral From Buy by Sidoti & Co.

Neurocrine Raised to Overweight From Equal-Weight by Morgan Stanley

Nordstrom Raised to Hold From Reduce by Gordon Haskett

Sallie Mae Cut to Equal-Weight From Overweight by Wells Fargo

Spirit Aerosystems Cut to Sector Perform From Outperform by RBC Capital

Stanley Black & Decker Cut to Neutral From Buy by Longbow Research

Stanley Black & Decker Raised to Neutral From Sell by Citigroup

Synaptics Cut to Perform From Outperform by Oppenheimer

Travel + Leisure Cut to Hold From Buy by Jefferies

Upstart Holdings Cut to Hold From Buy by Loop Capital

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

(END) Dow Jones Newswires

February 06, 2023 06:02 ET (11:02 GMT)

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