MARKET WRAPS
Watch For:
1Q GDP Third Estimate; Weekly Jobless Claims; Jerome Powell participates in a discussion with Bank of Spain Governor at a conference on financial stability; Nike results
Today's Headlines/Must Reads
- Jerome Powell Says Bank Failures Underscore Need for Stronger Regulation, Supervision
- U.S. Companies Face EU Deforestation Rules on Coffee, Wood and More
- Chinese Balloon Used American Tech to Spy on Americans
- Travel Stocks Charge Higher Ahead of Peak Season
Follow WSJ markets coverage here .
Opening Call:
Stock futures moved tentatively higher on Thursday, ahead of further data on the economy that central bank officials said they'd be evaluating for signs on how much further interest rates have to climb.
Jerome Powell, as well as his colleagues from around the world, each reinforced their willingness to combat inflation at the European Central Bank annual forum in Sintra, Portugal. Powell largely repeated that same message in Madrid early on Thursday.
The broader backdrop is a market in which the S&P 500 has gained 14% this year. Fundstrat said the S&P 500 looks ready to get to 4,500, while small caps could outperform.
"While some view this current rally as being unusual, it rarely pays to fade rallies which many don't understand, and have been fighting. Rather, it's wise to wait until real speculative behavior gets underway, and/or a drying up in buying. Neither one has occurred at present," Fundstrat said.
Premarket Movers
BlackBerry reported first-quarter adjusted earnings of 6 cents a share, beating analysts' calls for a loss of 6 cents. Its shares rose 18.
JPMorgan Chase rose 1.5%, Bank of America gained 1.3%, and Wells Fargo was up 1% after the Federal Reserve's annual stress test showed the U.S. banking system remains strong.
Micron Technology reported a fiscal third-quarter loss that was narrower than expected by analysts and the stock was rising 3.2% in premarket trading.
Virgin Galactic rose 4.2% in premarket trading ahead of the space-tourism pioneer's first commercial space flight.
Forex:
The dollar edged higher after Jerome Powell signalled further interest-rate rises, saying most Fed policymakers expect to raise rates "two or more times" by year-end.
The core message from Sintra seems to be that low unemployment rates have allowed economies to withstand significant rate rises reasonably well, meaning inflation hasn't fallen as much as expected, ING said.
Expectations for the duration and peak rates in policy tightening cycles are being revised higher, it added.
"This is most credibly being done in the U.S., where the economy appears to be outperforming."
TD Securities expects a "choppy but lower" dollar in the second half of the year, emphasizing likely gains for Latin American and emerging-market Asian currencies as well as the euro.
"Disinflation is the main driver and sending the strongest directional H2 cue for the dollar," TD said. "The main FX theme centers on the outperformance of global carry, where EM holds the most weight."
TD still expects EUR/USD to rise to 1.13 by year-end, from 1.0913 currently, and USD/CAD to fall to 1.30, from 1.3274 currently. TD slightly raised its year-end USD/JPY forecast to 134, versus a current USD/JPY level of 144.670.
Read Swedish Krona Falls to Multi-Year Low Vs Euro After Riksbank Raises Rates by 25Bps
Energy:
Crude futures inched lower as investors took profits following Wednesday's sharp run-up, but they remained concerned about the impact of rising interest rates on oil demand.
Metals:
Base metals and gold edged lower, with the economic environment turning more bearish "via a strong dollar, softer inflation expectations, and weaker commodity currencies," Peak Trading Research said.
Peak added that much of this comes has come from hawkish central-bank rhetoric, with bond markets now pricing an 80% chance the Federal Reserve hikes rates next month.
TODAY'S TOP HEADLINES
Lordstown Motors and Fisker Successor Face Off in Bankruptcy Court
The U.S. electric-vehicle startup formerly known as Fisker Automotive told a bankruptcy judge that its 2020 lawsuit against bankrupt Lordstown Motors should be able to move forward, particularly against defendants who themselves aren't part of Lordstown's chapter 11 filing.
Fisker, now known as Karma Automotive, on Wednesday filed an objection with the U.S. Bankruptcy Court in Wilmington, Del., to fight for its right to continue with a $900 million lawsuit over the alleged theft of trade secrets.
Crayhill Seeks $1 Billion for Asset-Backed Credit Fund
Crayhill Capital Management is raising its third fund dedicated to asset-backed credit investments as volatile markets and inflation are stoking investor interest in such strategies.
The New York-based firm is seeking $1 billion for Crayhill Principal Strategies Fund III, which will make private credit investments backed by pools of real- and financial assets, according to documents prepared for the Ventura County Employees' Retirement Association. The pension manager approved a $25 million commitment to the fund at a recent board meeting.
Costco Makes It Harder to Share Membership Cards
Costco Wholesale is cracking down on card-sharing.
The largest wholesale club in the U.S. by location, which requires customers to pay for an annual membership to shop in its stores, is now asking to see photo identification along with customers' membership cards at its self-checkout registers.
Berkshire Buys More Occidental Petroleum Stock, Upping Its Stake to 25%
Berkshire Hathaway bought 2.1 million shares of Occidental Petroleum in recent days, lifting its stake in the big energy company to just over 25%, according to a filing late Wednesday.
Berkshire Hathaway (ticker: BRK.A, BRK.B) now owns 224.1 million shares of Occidental Petroleum (OXY), a position worth about $12.9 billion based on the closing price Wednesday.
Yen May Weaken Further as Interest Rates Diverge - Talking Markets
The yen may weaken more in coming months on expectations that the interest-rate gap between Japan and most other countries could widen further and hurt the Japanese currency, analysts said.
Bank of Japan Gov. Kazuo Ueda said Wednesday that the central bank isn't yet confident enough to alter its super-accommodative monetary policy and argued that Japan's underlying inflation is still below the central bank's target of 2%. On the same day, Federal Reserve Chair Jerome Powell said that the U.S. central bank is likely to keep raising rates despite leaving rates unchanged earlier this month.
Big Oil Mulls a Slippery Future
When is it game over for oil? Don't expect a clear answer from the people with the most to lose from a shift to cleaner fuels.
Within energy circles, estimates of how much oil will be needed in 2050 range anywhere from 80% less than today to business as usual. Investors have the difficult job of betting which companies are on the wrong side of the most important trend for the sector in decades.
Riksbank Lifts Policy Rate to 3.75% From 3.50%, Signals More to Come
Sweden's central bank on Thursday lifted its key policy rate to 3.75% from 3.50%, as expected, and signaled a further hike later in the year as it continues to fight stubbornly high inflation.
The Riksbank's new rate path now implies the rate will peak at around 4.05% from around 3.65% previously, and remain at that level well into 2025.
Women Interviewing for Bill Gates's Private Office Were Asked Sexually Explicit Questions
Some people who sought jobs at billionaire Bill Gates's private office described going through an extensive screening process that included being questioned by a security firm about their sexual histories, past drug use and other parts of their private lives that might indicate they were vulnerable to blackmail.
Some female job candidates were asked whether they ever had extramarital affairs, what kind of pornography they preferred or if they had nude photographs of themselves on their phones, according to the candidates and people familiar with the hiring process. While it couldn't be determined whether any men were asked such questions, none who spoke to The Wall Street Journal said they had.
Write to paul.larkins@dowjones.com TODAY IN CANADA
Earnings:
Corus Entertainment 3Q
TECSYS 4Q
Economic Calendar (ET):
0830 Apr Payroll employment, earnings and hours, and job vacancies
Expected Major Events for Thursday
00:30/JPN: May Detailed Import & Export Statistics
05:00/JPN: Jun Consumer Confidence Survey
05:30/GER: Jun North Rhine Westphalia CPI
08:00/GER: Jun Bavaria CPI
08:00/GER: Jun Brandenburg CPI
08:00/GER: Jun Hesse CPI
08:00/GER: Jun Baden-Wuerttemberg CPI
08:30/UK: May Monetary & Financial Statistics
08:30/UK: May Bank of England effective interest rates
08:30/UK: May Money and Credit - Lending to Individuals, Lending to Businesses, Broad Money and Credit
09:00/GER: Jun Saxony CPI
12:00/GER: Jun Provisional CPI
12:30/CAN: Apr Payroll employment, earnings and hours, and job vacancies
12:30/US: 1Q Revised Corporate Profits
12:30/US: 1Q 3rd estimate GDP
12:30/US: 06/24 Unemployment Insurance Weekly Claims Report - Initial Claims
12:30/US: U.S. Weekly Export Sales
13:00/RUS: Weekly International Reserves
14:00/US: May Pending Home Sales Index
14:30/US: 06/23 EIA Weekly Natural Gas Storage Report
20:30/US: Foreign Central Bank Holdings
20:30/US: Federal Discount Window Borrowings
23:30/JPN: May Labour Force Survey
23:50/JPN: May Preliminary Industrial Production
All times in GMT. Powered by Kantar Media and Dow Jones.
Expected Earnings for Thursday
ASA Gold & Precious Metals Ltd (ASA) is expected to report for 1Q.
Accolade Inc (ACCD) is expected to report for 1Q.
Acuity Brands (AYI) is expected to report $3.16 for 3Q.
Bassett Furniture Industries Inc (BSET) is expected to report $0.06 for 2Q.
(MORE TO FOLLOW) Dow Jones Newswires
06-29-23 0614ET
