MARKET WRAPS
Watch For:
CPI for August
Opening Call:
Stock futures inched higher ahead of fresh inflation data that could be key in determining the speed and pace of interest-rate increases for the rest of the year.
The Dow industrials and the S&P 500 are both up more than 3% for the past five sessions.
Tuesday brings another test for markets with the release of consumer-price inflation data. That should help investors gauge the path ahead for interest rates before the next Federal Reserve meeting.
"We will repeat what we have said many times--by yearend core inflation will be in a better place and in an even better place as we get toward the middle of next year," RBC Capital Markets said.
"On balance our central thesis on inflation is do not be surprised if inflation surprises to the downside in the months to come."
The numbers aren't expected to do much to change expectations that the Fed will hike rates by 75 basis points later in the month, but could change the market's view on how high the Fed will eventually take rates.
Read Barrons.com: Soft Landing More Likely Than Recession, Say JPMorgan Strategists. What That Means for Stocks
Forex:
The dollar edged lower against a basket of currencies as Ukraine recapturing territory from Russia reduces flows into safe-haven assets.
MUFG Bank said the currency could extend losses if today's inflation data undershoot expectations.
It said the dollar declined after July's weaker-than-expected CPI print but the Federal Reserve has since downplayed the importance of the figures.
"A second consecutive weaker CPI report would though cast more doubt on market expectations for the Fed to deliver a third consecutive 75 basis points hike at the September 21 meeting."
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GBP/USD hit a two-week high after data showed the U.K. unemployment rate fell to its lowest level since 1974 and wage growth accelerated, likely increasing pressure on the BOE to deliver another 50bp -rate rise at its next meeting, Capital Economics said.
The unemployment rate fell to 3.6% in the May-July period from 3.8% in the previous quarter while average earnings, excluding bonuses, rose 5.2%. Analysts polled by the WSJ expected a jobless rate of 3.9% and wage growth of 5.1%.
Energy:
Oil prices held minor gains in Europe as supply concerns balanced with demand worries.
While oil has largely remained on a lower trajectory, investors still expect supply concerns to dominate later in the year pushing prices higher.
UBS has lowered its end-of-year Brent forecast to $110 a barrel, from $125 a barrel but expects an end to U.S. strategic reserve oil sales and EU efforts to halt Russian purchases will push prices higher in the coming months.
UBS expects Brent to hit $125 a barrel in March 2023.
Metals:
Metals prices were mixed early in the European session with traders looking ahead to the U.S. inflation data to provide more indications as to the state of the economy.
Gold has been "able to defend that $1,700 support level on a number of occasions in recent days, suggesting that dip-buyers are trying to take advantage of downbeat prices," City Index said.
If there's a "weaker-than-expected print on CPI, then this would further support the 'peak inflation' narrative" and consequently City Index said it would "expect the metal to rise a bit more meaningfully on the back of that."
ANZ said base metals may be supported by the onset of China's construction season, which in turn could boost the beleaguered Chinese property market.
It added that more Chinese cities have announced credit support and subsidies for home buyers.
TODAY'S TOP HEADLINES
AppLovin Walks Away from Unity Software Takeover Bid
AppLovin Corp. has scrapped plans to acquire Unity Software Inc. after the company opposed its $17.5 billion offer.
The mobile technology company said Monday that it wouldn't submit another proposal to combine with Unity Software, in a deal that would have combined two large providers of tools for mobile developers.
Twitter Shareholders Are Poised to Approve Elon Musk Takeover Deal
Twitter Inc.'s shareholders are poised to approve the $44 billion takeover that Elon Musk is now trying to exit, according to people familiar with the matter, putting the deal's fate in a Delaware judge's hands as the social-media company tries to force the billionaire to follow through with the purchase in court.
Early votes show investors approving the deal by a wide margin, the people said, though there is always a chance that the results could change as shareholders can alter their votes through a meeting scheduled for Tuesday at 1 p.m. Eastern time.
Oracle Sales Top Expectations as Cloud Businesses Thrive
Oracle Corp. sales topped expectations in the latest quarter, as its cloud businesses and integration of Cerner Corp. lifted results despite concerns about a slowdown among technology companies in response to economic uncertainty.
The business-software giant said a stronger dollar compared with foreign currencies had a significant impact on its fiscal first-quarter results.
Rent the Runway to Reduce Workforce as More Customers Pause Their Subscriptions
Rent the Runway Inc. said it would reduce its corporate workforce by 24%, primarily through layoffs, as the fashion-rental service adjusts to a slowdown in consumer spending and shifts from shopping habits adopted earlier in the pandemic.
The New York company on Monday didn't specify the total number of jobs affected. It had 958 full-time employees and 138 part-time employees as of Jan. 31, according to securities filings.
Peloton Chairman John Foley to Exit in Management Shake-Up
Peloton Interactive Inc. said co-founder John Foley and other senior leaders are leaving the company in a management shake-up as the maker of connected exercise equipment races to turn itself around.
Peloton has struggled with deepening losses this year after a pandemic-fueled spike in demand for its at-home workouts left the company with a glut of unsold bicycles when consumers returned to gyms and outdoor activities. The company's shares have plunged more than 90% over the past year.
U.S. Gasoline Prices Are Down 13 Weeks in a Row
U.S. gasoline prices have fallen for 13 weeks in a row, the longest consecutive weekly slide in more than three years, as global demand for oil continues to fall.
The average price of regular unleaded gasoline fell to $3.70 a gallon, the lowest since early March, according to OPIS, an energy-data and analytics provider, and is approaching the average price that predated Russia's invasion of Ukraine. Average gas prices have fallen 26% from the record above $5 a gallon set in June.
Argentina Will Stick to IMF Targets to Reduce Budget Deficit
Argentina will stick to a deal with the International Monetary Fund to gradually reduce the country's budget deficit amid a surge in inflation, the country's top economic official said Monday.
Economy Minister Sergio Massa met with IMF Managing Director Kristalina Georgieva in Washington, D.C., and they said the IMF's program with Argentina would remain unchanged. Ms. Georgieva said she welcomed Mr. Massa's "strong commitment and drive to achieve the goals of the program."
U.S. Seeks to Bring Mexico on Board With Plans for Chips, Clean Energy
MEXICO CITY-U.S. officials wound up a day of high-level meetings with their Mexican counterparts optimistic that they can bring their southern trade partner on board with multibillion-dollar plans to boost regional production of semiconductors and renewable energy.
Secretary of State Antony Blinken and Secretary of Commerce Gina Raimondo led the delegation of senior U.S. officials to Mexico City Monday for the second annual economic dialogue.
Write to paul.larkins@dowjones.com TODAY IN CANADA
Earnings:
Evertz Tech 1Q
Roots 2Q
WildBrain 4Q
Economic Indicators:
None scheduled
Stocks to watch:
Excellon Resources Evaluating a Spin-Out of Silver City Project in Saxony, Germany; Excellon Drilling the Fifth Hole at Kilgore; While Assays Are Pending, Company Has Been Encouraged by the Drilling to Date
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McCain Foods Acquires Netherlands-Based Frozen-Foods Producer Scelta Products; McCain: Deal Represents Significant Investment to Fuel Growth in Frozen Vegetable Appetizer Space
Expected Major Events for Tuesday
04:01/US: 4Q Manpower U.S. Employment Outlook Survey
06:00/GER: Aug CPI
06:00/UK: Aug UK monthly unemployment figures
08:00/ITA: 2Q Labour Cost Index
08:30/UK: 2Q Mortgage Lenders and Administrators Return (MLAR) statistics
09:00/GER: Sep ZEW Indicator of Economic Sentiment
10:00/US: Aug NFIB Index of Small Business Optimism
10:00/FRA: 2Q OECD Quarterly National Accounts G20 GDP growth
12:30/US: Aug CPI
12:30/US: Aug Real Earnings
12:55/US: 09/10 Johnson Redbook Retail Sales Index
14:00/US: Sep IBD/TIPP Economic Optimism Index
18:00/US: Aug Monthly Treasury Statement of Receipts & Outlays of the U.S. Govt
20:30/US: 09/09 API Weekly Statistical Bulletin
23:01/UK: Aug Scottish Retail Sales Monitor
23:50/JPN: Jul Orders Received for Machinery
All times in GMT. Powered by Onclusive and Dow Jones.
Expected Earnings for Tuesday
Aspen Group Inc (ASPU) is expected to report $-0.11 for 1Q.
Cenntro Electric Group Ltd (CENN) is expected to report for 2Q.
Coda Octopus Group Inc (CODA) is expected to report for 3Q.
Core & Main Inc (CNM) is expected to report for 2Q.
Crossroads Impact Corp (CRSS) is expected to report for 3Q.
Evertz Technologies (ET.T,EVTZF) is expected to report $0.15 for 1Q.
Evolution Petroleum Corp (EPM) is expected to report $0.41 for 4Q.
FTI Consulting (FCN) is expected to report $2.00 for 4Q.
Great Elm Group Inc (GEG) is expected to report for 4Q.
IBEX Limited (IBEX) is expected to report for 4Q.
InnovAge Holding Corp (INNV) is expected to report for 4Q.
Kaspien Holdings Inc (KSPN) is expected to report for 2Q.
(MORE TO FOLLOW) Dow Jones Newswires
09-13-22 0530ET
