MARKET WRAPS
Watch For:
Trade for November; Canada Trade for November; Earnings from Albertsons
Today's Top Headlines/Must Reads:
- The former bond king, Bill Gross, says 10-year Treasury is 'overvalued'
- ESG Funds Underperformed in 2023. Backlash Wasn't the Problem.
- As Retailers Cite Rising Theft and Shrinkage, Analysts Want More Details
Opening Call:
Stock futures were lower early on Tuesday as a profit warning from Samsung Electronics weighed on the technology sector.
Samsung said its fourth-quarter operating profit may fall 35% as weak consumer demand for smartphones hits sales of memory chips.
Overseas Markets
In Asia, the Nikkei 225 rose 1.2% to close at its best level since March 1990. In contrast, the Hang Seng initially rose following indications Beijing may ease monetary policy by cutting banks reserve requirements, but ended down 0.2% to its lowest since October 2022 as fears about China's economy lingered.
Premarket Movers
Boeing was down 0.8% in premarket trading after United Airlines and Alaska Air said they discovered loose parts on Boeing 737 MAX 9 jets.
Match Group was rising 9.8% after the Journal reported Elliott Investment Management has built a position of roughly $1 billion in the company.
Nvidia closed Monday at an all-time high, rising 6.4% during the session. The stock was up 0.2% in premarket trading.
Unity Software said it plans to lay off about 1,800 employees, or 25% of its workforce, as the company "refocuses on its core business." Shares rose 3.6%.
Monday's Post-Close Movers
BarkBox parent company Bark said sales for its fiscal third quarter were better than the dog toy and treat company had previously forecast. Shares rose 17%.
Extreme Networks lowered its second-quarter revenue outlook. Shares fell 6.2%.
Hewlett Packard Enterprise is in advanced talks to buy Juniper Networks for about $13 billion, the Wall Street Journal reported. HPE shares fell 8.4% in after-market trading, while Juniper shares rose 21%.
Microchip Technology fell 4.2% after the company said it expected fiscal third-quarter sales to fall more than it had anticipated, citing a "weakening economic environment."
Forex:
The dollar's gains at the start of this year have been modest due to the market's conviction that the Federal Reserve will cut interest rates this year, ING said.
Increasing long dollar positions is now viewed as a "counter-trend trade."
January and February are typically good months for the dollar, but the currency is more likely to trade in a range for now. ING said the DXY dollar index could trade within a range between 101.90 and 103.10 this week, awaiting Friday's inflation data and bank earnings.
Bonds:
Weakening growth, slowing inflation and an uncertain political environment will create the perfect environment for bonds to outperform other assets in the first quarter of 2024, Saxo said.
"Bond investors are presented with the opportunity to lock in one of the highest yields in more than 10 years," it said.
"Higher yields do not only mean higher returns, but also a lower probability of bonds posting a negative return even if yields rise slightly again."
Energy:
Oil prices gained, with ING saying that if market weakness persisted, it would be difficult to see how OPEC+ would be able to make more meaningful output reductions, given the scale of their cuts already.
"What we are more likely to see is a rollover of current voluntary cuts into 2Q24 in order to erode the surplus expected next quarter."
Metals:
Base metals were weaker, while gold edged higher as market watchers awaited this week's CPI data for more economic clarity.
"Investors are awaiting the inflation print on Thursday, which we expect will bring more volatility to the base metals complex," Sucden Financial said.
Uranium
Uranium prices could rise even higher on supply tightness , rising demand and thin spot markets, Berenberg said. However, prices will likely normalize in the $70 per pound range in the long term.
TODAY'S TOP HEADLINES
PepsiCo, Grocery Giant Bicker Over Who Dumped Whom
A breakup over grocery prices got messier Monday when PepsiCo said that it, not supermarket chain Carrefour, initiated the split.
PepsiCo said that it had decided to stop supplying the chain's European stores because the two sides hadn't reached an agreement on a new contract.
United, Alaska Find Loose Parts on Some Boeing 737 MAX 9 Jets
United Airlines and Alaska Airlines have discovered loose parts on Boeing 737 MAX 9 jets that they have inspected after a near-catastrophe on a flight Friday, signaling Boeing's issues go beyond the aircraft that made an emergency landing.
The disclosures came shortly before investigators at the National Transportation Safety Board said that dangerous episode on an Alaska Airlines jet occurred because an emergency exit-sized door plug blew out at around 16,000 feet after somehow moving off a set of stops that are designed to keep it attached to the plane.
China Surges to the Top of Global Auto Exports
HONG KONG-China's overseas auto sales surged to a record last year, on track to surpass Japan as the world's biggest exporter and marking a tectonic shift for the global auto industry.
While China has become acknowledged as a world leader in electric vehicles, traditional gas-powered autos were the main driver of the increase, with demand surging especially in Russia.
Big 2024 Presidential Election Changes Are Leaving Voters Baffled
Iowa Republicans on Monday will caucus to choose a presidential candidate, but Democrats will start to vote by mail and wait weeks for results. In New Hampshire the following week, both parties will cast primary ballots, but the Democrats' votes will be purely symbolic.
And then in early February, Nevada Republicans can vote in two contests: a caucus without all the GOP candidates, and a primary where results won't count toward the nomination.
Co-Defendant in Trump Georgia Case Alleges Misconduct by Fulton County Prosecutor Fani Willis
Fulton County District Attorney Fani Willis improperly hired and paid a private attorney to aid her office in its racketeering case against former President Donald Trump and others, according to a court filing Monday by one of the defendants in the case.
A lawyer for Trump co-defendant Mike Roman stated that Willis is "in a personal, romantic relationship" with Nathan Wade, a special prosecutor in her office and a lead lawyer on the Trump case. The motion asked a judge to disqualify Willis from the case she brought against Trump and other defendants last year. Roman served as the director of Election Day operations for Trump's 2020 campaign.
Write to ina.kreutz@wsj.com
TODAY IN CANADA
Earnings:
Tilray Brands 2Q
Economic Calendar (ET):
0830 Nov Trade
0830 Nov Building permits
Stocks to Watch:
Eupraxia Pharmaceuticals Announces Filing of Preliminary MJDS Base Shelf Prospectus
Expected Major Events for Tuesday
00:01/UK: Dec BRC-KPMG Retail Sales Monitor
00:01/UK: CBI Financial Services Survey
00:01/UK: Dec Scottish Retail Sales Monitor
07:00/GER: Nov Industrial Production Index
07:45/FRA: Nov Foreign trade
07:45/FRA: Nov Balance of Payments
09:00/ITA: Nov Unemployment
11:00/US: Dec NFIB Index of Small Business Optimism
13:30/CAN: Nov International merchandise trade
13:30/US: Nov U.S. International Trade in Goods & Services
13:30/CAN: Nov Building permits
13:55/US: 01/06 Johnson Redbook Retail Sales Index
15:00/US: Jan RCM/TIPP Economic Optimism Index
21:30/US: 01/05 API Weekly Statistical Bulletin
All times in GMT. Powered by Kantar Media and Dow Jones.
Expected Earnings for Tuesday
AZZ Inc (AZZ) is expected to report $0.82 for 3Q.
Acuity Brands (AYI) is expected to report $2.71 for 1Q.
Aehr Test Systems (AEHR) is expected to report for 2Q.
Albertsons Companies Inc (ACI) is expected to report $0.54 for 3Q.
Anixa Biosciences Inc (ANIX) is expected to report for 4Q.
CalAmp (CAMP) is expected to report $-0.15 for 3Q.
Cohbar Inc (CWBR) is expected to report for 3Q.
E2open Parent Holdings Inc (ETWO) is expected to report for 3Q.
MSC Industrial Direct Co Inc (MSM) is expected to report $1.30 for 1Q.
Neogen Corp (NEOG) is expected to report $0.03 for 2Q.
Park Aerospace Corp (PKE) is expected to report for 3Q.
PriceSmart (PSMT) is expected to report $1.09 for 1Q.
SMART Global Holdings Inc (SGH) is expected to report $-0.18 for 1Q.
Saratoga Investment Corp (SAR) is expected to report $1.01 for 3Q.
TD SYNNEX Corp (SNX) is expected to report $2.11 for 4Q.
TSR Inc (TSRI) is expected to report for 2Q.
Tilray Brands Inc (TLRY) is expected to report $-0.05 for 2Q.
VOXX International Corp - Class A (VOXX) is expected to report $-0.10 for 3Q.
WD 40 (WDFC) is expected to report $1.00 for 1Q.
Powered by Kantar Media and Dow Jones.
ANALYST RATINGS ACTIONS
Advanced Micro Devices Raised to Buy From Hold by Melius Research
agilon health Cut to Peer Perform From Outperform by Wolfe Research
American Airlines Group Raised to Overweight From Equal-Weight by Morgan Stanley
Apple Hospitality REIT Cut to Neutral From Buy by B of A Securities
Ares Capital Cut to Neutral From Buy by B. Riley Securities
Arista Networks Raised to Buy From Hold by Melius Research
Array Technologies Cut to Equal-Weight From Overweight by Wells Fargo
Axalta Coating Systems Cut to Neutral From Buy by UBS
Bank OZK Cut to Neutral From Buy by UBS
BankUnited Cut to Sell From Neutral by UBS
Beacon Roofing Supply Raised to Outperform From Market Perform by William Blair
Blink Charging Raised to Buy From Hold by Needham
Blue Owl Capital Cut to Neutral From Buy by B. Riley Securities
Brown & Brown Raised to Buy From Neutral by Goldman Sachs
Brown & Brown Raised to Outperform From Sector Perform by RBC Capital
Cabot Corp Cut to Neutral From Buy by UBS
(MORE TO FOLLOW) Dow Jones Newswires
01-09-24 0608ET
