MARKET WRAPS
Watch For:
Existing Home Sales for October; Canada Industrial Product & Raw Materials Price Indexes for October; Foot Looker earnings
Opening Call:
Today's Headlines/Must Reads
- Twitter Workers Say Farewell After Musk Ultimatum
- China's New Daily Covid Cases Jump Above 24,000
- Foreign Demand for Treasurys, Other Debt Plunges
- North Korea Fires Suspected Intercontinental Ballistic Missile
Follow WSJ markets coverage here .
Stock futures managed to edge higher on Friday despite mounting worries that the Federal Reserve might raise interest rates higher than expected to subdue inflation.
Fed funds futures traders are presently anticipating that the key benchmark rate will peak somewhere between 4.75% and 5.5% next spring, according to the CME FedWatch Tool.
Wolfe Research said that James Bullard's speech [on Thursday] bolstered its view that the Fed may hike as high as 6%.
"We believe that our intermediate-term bearish base case remains fully intact!"
Friday's data calendar includes releases on existing home sales and leading economic indicators. Boston Fed President Susan Collins is due to give a speech about the labor market, at 8:40 am.
Stocks to Watch
Gap's turnaround efforts resulted in a return to a profit, as overall results for retailers remain mixed amid stubbornly high inflation. Gap's share rose 7.4% off hours.
Applied Materials reported better-than-expected earnings and topped expectations with its forecast for the coming quarter. Its shares gained 3.9% off hours.
Palo Alto Networks climbed 7% off hours after it swung to a profit as customers spent more on its platforms.
Ross Stores stock rose 17% off hours after it raised its outlook for fiscal 2022.
Williams-Sonoma said consumer demand had been inconsistent during the recent quarter and warned that high inventory levels could linger into the start of 2023. Its shares fell 7.2% off hours.
Forex:
The dollar could extend its recent consolidation but not for much longer, ING said.
Markets remain highly sensitive to Federal Reserve speakers and so far most policymakers have tried to curb speculation about an imminent pivot away from raising interest rates, ING said.
"The future market has now fully priced back in a 5% peak rate in the first half of 2023. With the dovish pivot narrative softening, we expect some re-appreciation of the dollar in the near-term, but that is a trend that could only start from next week or the one after."
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Sterling may have survived the U.K. government's much-feared fiscal statement but it's still at risk of falling, ING said.
"We continue to see downside risks for GBP/USD as the dollar may start to recover into year-end, and target sub-1.15 levels in the near term," ING said, adding that EUR/GBP could rise to 0.89 by year-end.
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Bitcoin prices edged up despite further drama around the collapse of FTX, after its new chief executive described lax financial reporting, incomplete record-keeping, and questionable management practices at the cryptocurrency exchange.
Bitcoin climbed 0.8% in the past 24 hours to more than $16,700. The biggest cryptocurrency has held above $16,000 this week after collapsing from more than $21,000 to lows of near $15,500 reached in the immediate aftermath of FTX's failure.
Other platforms in the sector remain under pressure. J.P. Morgan analysts said outflows have been most severe from Gemini, OKX, and Crypto.com.
Read more here.
Energy:
Oil held modest gains in Europe despite rising Covid-19 cases in China which have put some pressure on prices according to SPI Asset Management.
However, "given the lack of supply buffers and depleting inventories, oil prices should find some support near the current technical levels as the pushback on the China reopening narrative has likely gone too far," SPI said.
Crude oil prices are still down more than 6% for the week despite Friday's gains.
Metals:
Metals prices were little changed in early London trade with few macro drivers to steer direction.
Fitch said metal markets this year have largely been driven by macro sentiment, but currently the market is lacking key data points due in the near-term. That said, a weakening dollar is likely to give further strength to metals.
TODAY'S TOP HEADLINES
Twitter Workers Say Farewell After Musk Ultimatum
Twitter Inc. suffered a new wave of departures Thursday to its already depleted workforce after many employees rejected Elon Musk's demand that they commit to working "long hours at high intensity" in order to stay.
Many staffers spent the past day weighing their options, after waking up Wednesday to an overnight email in which Mr. Musk told them to fill out a form by Thursday, 5 p.m. ET, to indicate if they want to remain at the company and are willing to be "extremely hardcore." Employees who don't opt in will be given three months of severance, Mr. Musk said.
Amazon CEO Andy Jassy Says Layoffs Will Extend Into Next Year
Amazon.com Inc. chief executive Andy Jassy said that layoffs under way at the tech company, which will extend into next year, are the most difficult decision he has made since taking over from Jeff Bezos last year.
Mr. Jassy, in a note to employees made public, said positions are being eliminated across Amazon's devices and books businesses. The company is cutting jobs across its corporate ranks that could affect 10,000 employees, or 3% of corporate staff, The Wall Street Journal has reported.
Visa CEO Alfred Kelly to Retire
Visa Inc. said on Thursday that Alfred Kelly will step aside as chief executive, effective February, and become executive chairman of its board. Ryan McInerney, the card giant's longtime president, will become the next chief executive.
Mr. Kelly's time atop the company, which began in 2016, overlapped with a continuing shift to digital payments as more consumers pay with cards, a process that further accelerated during the pandemic. During his tenure, Visa, which is the largest card network in the U.S., also further expanded its focus on other payment flows. These include helping money move over its network without the use of cards, including for transactions that involve governments and businesses.
Gap Swings to Profit With Turnaround Under Way Amid Persistent Inflation
Gap Inc.'s turnaround efforts resulted in a return to a profit in the latest quarter as results for retailers remain mixed amid stubbornly high inflation.
The apparel retailer, whose holdings include Old Navy and Banana Republic, said its third-quarter results highlighted its progress in streamlining its brands and reducing its inventory. Like its competitors, economic uncertainty stemming from inflation has shifted consumer spending and led the company to offer more discounts.
BHP, World's Top Miner, Nears Biggest Acquisition in a Decade
ADELAIDE, Australia-BHP Group Ltd. raised its offer for OZ Minerals Ltd. to value the Australian miner at $6.34 billion, as it seeks to produce more copper and nickel needed for electric vehicles, wind turbines and solar farms.
OZ Minerals said it intends to recommend shareholders vote in favor of BHP's revised offer of 28.25 Australian dollars, the equivalent of about $18.90, a share. A completed deal would represent BHP's largest acquisition since 2011 when it bought Petrohawk Energy Corp. for more than $12 billion.
China's New Daily Covid Cases Jump Above 24,000
SINGAPORE-China's central government has laid out preparations to deal with surging Covid-19 infections, while warning local authorities against "irresponsible loosening" of pandemic-control measures.
China would continue to "rectify the practice of excessive measures such as lockdowns, while also opposing irresponsible attitudes and prevent a loosening up," said Mi Feng, spokesman for China's National Health Commission during a briefing on Thursday.
Foreign demand for U.S. Treasurys, other debt plunges to $80 billion in September
Demand from foreign investors for Treasurys and other long-term U.S. bonds dropped by more than half to $80 billion in September from a month before, according to a Barclays tally of Treasury Department data.
While foreign investors bought nearly $190 billion in longer U.S. fixed-income securities in August, they scaled back dramatically a month later (see chart), according to Treasury Department data.
Germany's biggest trade union agrees 8.5% pay rise for metal and electrical workers to combat record inflation
Germany's IG Metall trade union has reached an agreement with employers to boost pay for metals and electrical workers by 8.5% over two years, aimed at taking the sting out of decades-high inflation in the country.
The country's biggest union, which covers more than 2.2 million workers, said in a statement on Friday that employees will get a package of permanent pay rises and special inflation help that will be delivered in stages. The agreement came after five rounds of talks and warning strikes by workers.
Japan's Overall CPI Rose 3.7% in October
TOKYO--Japan's overall consumer inflation rose 3.7% from a year earlier in October, exceeding the Bank of Japan's 2% target for the seventh consecutive months, government data showed Friday.
The pace of price rises accelerated from a 3% annual increase in September.
North Korea Fires Intercontinental Ballistic Missile
SEOUL-North Korea fired an intercontinental ballistic missile off its east coast on Friday, Seoul's military said, a day after threatening to take military counteraction against bolstered defense ties among the U.S., South Korea and Japan.
The nuclear-armed country has launched a record number of missiles this year, broken its self-imposed moratorium on long-range testing and resumed testing ICBMs for the first time since 2017.
Explosives Found at Nord Stream Blast Sites, Swedish Investigators Say
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11-18-22 0556ET
