MARKET WRAPS
Watch For:
CFNAI Chicago Fed National Activity Index for October; earnings from Zoom Video Technologies, Dell Technologies, J.M. Smucker and Urban Outfitters
Opening Call:
Today's Headlines/Must Reads
- Disney Ousts Chapek, Iger Returns as CEO
- Companies Brace for Onslaught of New Activists After Change in Proxy-Voting Rules
- FTX Says Top 50 Creditors Are Owed $3.1 Billion
- Crypto Bank Silvergate Battles FTX Contagion Fears
- China Consumer Spending Slumps Under Covid, Property Restrictions
- China's Central Bank Keeps Benchmark Lending Rates Unchanged
Follow WSJ markets coverage here .
Stock futures declined on Monday as a fresh round of Covid-19 shutdowns in China rattled investors.
Asian and European stocks tracked U.S. equity futures lower after the Chinese government introduced further restrictions within the world's second biggest economy in the wake of more Covid outbreaks.
Worries about waning demand from the globe's dominant manufacturer also pushed down prices of industrial metals like copper and forced U.S. crude oil below $80 a barrel.
"Financial markets have caught a cold amid worries that mounting Covid cases in China and a fresh tightening of restrictions will send a fresh shiver through manufacturing output and push down demand for raw materials," Hargreaves Lansdown said.
Evidence of risk aversion and a scramble for perceived havens also could be seen in forex and bonds.
"The bears are on the prowl today as investors have little choice but to adjust for downside risk," SPI Asset Management said.
San Francisco Fed President Mary Daly is due to speak about inflation on Monday at 1 p.m. Eastern. The Fed will release on Wednesday at 2 p.m. the minutes of its most recent rate-setting meeting.
It's a thin week for U.S. economic data, with much of it shoehorned into Wednesday, ahead of Thanksgiving.
Stocks to Watch
Walt Disney's board of directors on Sunday night replaced Chief Executive Bob Chapek with Robert Iger, its former chairman and CEO who left the company at the end of last year. Disney shares jumped 8.1% premarket.
Carvana, a pandemic winner, is rushing to conserve cash as once-plentiful financing options dry up and business deteriorates. On Friday, Carvana laid off about 1,500 people.
Silvergate Capital shares have been cut in half this month and are now down nearly 90% over the past year, even as Silvergate has taken steps to reassure investors of its stability amid FTX's collapse.
Forex:
The dollar rose to its highest since Nov. 11 against a basket of currencies, as Covid cases rise in China and reports emerge of renewed lockdowns and mass testing exercises in some cities, boosting demand for safe-haven assets.
"The weakness in Asian currencies and rebound for the dollar has been driven by renewed fears over further Covid disruption in China over the weekend," MUFG said.
The dollar could rise further if recent optimism about a possible easing of China's Covid restrictions continues to reverse, it added.
Crypto
The rout in Bitcoin and other cryptocurrencies resumed on Monday, with further details of FTX's collapse emerging over the weekend and fears swirling around other crypto platforms.
Bitcoin was down more than 4% in the past 24 hours to waver around the $16,000 level, in a swift fall from levels of around $16,600.
Read more here .
Energy:
Crude futures were trading around their lowest levels since the end of September, as demand worries continued to weaken prices, with rising Covid-19 cases in China spurring further worries about uptake.
"Fears of a U.S. hard landing are fusing with China's uncompromising lockdown policy, which continues to downgrade demand expectations," SPI Asset Management said.
"Concerns about global demand could extend if 'flash' PMIs released across the major economies signal ongoing weakness in orders," SPI added, referring to the data releases due on Wednesday.
Read: Earthquake in Top Texas Oil Region Spurs Calls for New Fracking Rules
Metals:
Base metals and gold were weaker in European trading, as concerns continued to mount over China's potential reopening following a rise in Covid-19 cases in the country.
Marex said sentiment had weakened in Asia with China reporting its first Covid death in months on Saturday and another two more on Sunday.
TODAY'S TOP HEADLINES
Robert Iger Returns as Disney CEO as Bob Chapek Is Ousted
Walt Disney Co.'s board of directors on Sunday night replaced Chief Executive Bob Chapek with Robert Iger, the company's former chairman and CEO who left the company at the end of last year, according to a company announcement.
"The board has concluded that as Disney embarks on an increasingly complex period of industry transformation, Bob Iger is uniquely situated to lead the company through this pivotal period," said Susan Arnold, chairman of Disney's board, in a statement.
Crypto Bank Silvergate Battles FTX Contagion Fears
Earlier this month, Silvergate Capital Corp. gathered its staff to celebrate its transformation into the go-to bank for the crypto market. Then, the crypto market blew up.
The collapse of crypto exchange FTX has raised questions about how close the bank was to the empire of Sam Bankman-Fried. The price of Silvergate's stock has been cut in half this month and is now down nearly 90% over the past year.
Paramount Won't Support Appeal of Ruling That Blocked Simon & Schuster's Sale to Penguin
Paramount Global has decided not to support an appeal of a recent ruling that blocked the planned $2.18 billion sale of its Simon & Schuster book-publishing unit to rival Penguin Random House, according to people familiar with the situation.
Paramount is expected to announce a decision early this week, the people said.
Companies Brace for Onslaught of New Activists After Change in Proxy-Voting Rules
Sinking stock prices and a change in proxy-voting rules are emboldening many first-time shareholder activists to seek changes at some of the biggest names in American corporations.
Companies, always wary of activist advances, are feeling particularly vulnerable as a result of new rules imposed by U.S. regulators in September requiring the use of a so-called universal proxy card in corporate-director elections, bankers and lawyers say.
Celsius Failed to Set Up Controls to Track Customer Funds in Some Accounts, Examiner Says
Bankrupt cryptocurrency firm Celsius Network LLC failed to set up proper accounting and operational controls to ensure that customer funds in certain deposit accounts were set aside from the rest of its crypto holdings, according to an independent examiner appointed in the company's chapter 11 case.
In a report released Saturday, examiner Shoba Pillay found that since Celsius hadn't developed separate infrastructure for the so-called custody program it started offering in April, the firm had to take steps to transfer funds into the custody accounts from the rest of its holdings to address frequent shortfalls. Moreover, Celsius continued to mix deposits in so-called withhold accounts, the second type of account it created in response to regulatory pressure, with the rest of its funds, according to Ms. Pillay's report.
Carvana Faces Cash Crunch From High Debt, Rising Interest Rates
Carvana Co., the used-car dealer that was a pandemic winner, is rushing to conserve cash as once-plentiful financing options dry up and business deteriorates.
On Friday, Carvana laid off about 1,500 people, its second round in six months. Its weakening finances mean raising funds would be difficult and costly, and it could run out of cash in a year, analysts say.
Tesla Board's View That Elon Musk Is Irreplaceable Emerged in Pay Trial
WILMINGTON, Del.-The scale of concern among Tesla Inc. board members about how to keep Elon Musk's attention trained on the electric-vehicle maker loomed large during a weeklong trial over the chief executive's pay package.
A desire to motivate Mr. Musk to focus on Tesla triggered a monthslong pay negotiation that culminated in the shareholders' approval of a 2018 CEO equity grant valued at roughly $48 billion at recent stock prices.
Disney Parks' Ride Stoppages and Wait Times Grow as Ticket Prices Rise
Amie Gasabyan was riding the Indiana Jones Adventure thrill ride at Disneyland with her 9-year-old daughter Ella on a recent weekday when it lurched to a halt in a pitch-black tunnel.
Ms. Gasabyan told her daughter to stay calm and that this happens all the time. The ride started up again after about seven minutes.
GameStop's Ryan Cohen Wants to Be More Than a Meme-Stock King
Ryan Cohen is the face of an investing revolution that captivated amateur traders, punished Wall Street and favored memes over fundamentals. Many of his other bets belong to a more conservative playbook.
The 37-year-old billionaire, who made his fortune with online pet retailer Chewy Inc., gained fame during a period of market frenzy last year when he used a stake in struggling videogame retailer GameStop Inc. to push out the executive team and become chairman. His enigmatic tweets-including a picture of himself with chopsticks up his nose-helped his investment gain viral popularity as a so-called meme stock and motivated his followers to seek revenge against professional traders who had bet against the company.
Housing Industry Braces for a Downturn, but Investors Are Piling In
Investors are seizing on any sign inflation has peaked as a reason to snap up beaten-down shares. Just look at housing stocks.
Redfin Corp. shares have soared more than 50% since Nov. 9 when the real-estate brokerage's chief executive warned, "We have to assume that the sun will never come up." Shares of home builder PulteGroup Inc. have gained 11% over the same period, despite its CEO recently describing a widespread pullback in demand as interest rates climbed.
Earthquake in Top Texas Oil Region Spurs Calls for New Fracking Rules
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11-21-22 0541ET
