MARKET WRAPS
Watch For:
Personal Income and Outlays, University of Michigan Final Consumer Survey, earnings from American Express, Chevron, Colgate-Palmolive, Exxon Mobil, Phillips 66
Today's Headlines/Must Reads
- Inflation Trends Likely to Keep Fed Rate-Hike Pause on Track
- Investors Like New York Subways. San Francisco's BART? Not So Much
- Apple Faces Potential Watch Import Ban After Federal Trade Ruling
Opening Call:
Stock futures pointed to a brighter start on Friday to wrap up a difficult week, buoyed by well-received results from https://urldefense.com/v3/__http://Amazon.com__;!!F0Stn7g!BFUZcAdp4mVLs20MCcjKIAmIi7V1Yz4sWwKjFvfNaGIqJfFdmwbdeA-iJZFE83N18WaiGjE-zTuXrU17u3pbtkldU_9fCA2w134d2MW-TT4$ .
"A combination of solid post-market tech earnings...and less weak than expected industrial profits in China are helping lift global risk sentiment with stocks in all geographies trading in the green," JPMorgan said.
China reported that industrial profits grew 11.9% year-over-year in September.
The economics calendar for Friday includes the PCE price index, the Fed's favored inflation measure, which at the core level is expected to rise by 0.3% on a monthly basis.
While the Fed next week isn't expected to change interest rates, the focus will be on the commentary it delivers about the possibility of hiking rates further in December.
"Strong economic data releases are likely to continue to generate market choppiness until investors are confident that the economy is cooling but not collapsing and the rate shock is over. We think both developments are likely in the fourth quarter," UBS Global Wealth Management said.
Premarket Movers
https://urldefense.com/v3/__http://Amazon.com__;!!F0Stn7g!BFUZcAdp4mVLs20MCcjKIAmIi7V1Yz4sWwKjFvfNaGIqJfFdmwbdeA-iJZFE83N18WaiGjE-zTuXrU17u3pbtkldU_9fCA2w134d2MW-TT4$ reported third-quarter earnings of 94 cents a share, well above analysts' consensus of 58 cents. The stock rose 5.1%.
Deckers Outdoor reported better-than-expected fiscal second-quarter earnings and revenue and raised its fiscal-year sales forecast to about $4.025 billion. The stock rose 7.6%.
Dexcom reported third-quarter earnings that handily that beat expectations, and boosted its revenue forecast for 2023. Shares rose 16%.
Enphase Energy projected that the current slowdown in solar-product sales would last through the first quarter of 2024, sending the stock down 19%.
Ford reported weaker-than-expected third-quarter earnings and withdrew its guidance for the year, citing the tentative labor agreement with the UAW union that was reached earlier this week. Its shares declined 2.7%.
Intel reported third-quarter adjusted earnings that were better than expected and issued upbeat profit guidance. The stock rose 7.8%.
Forex:
The dollar's reaction to the stronger-than-expected U.S. GDP data was "quite muted" and it could, along with other currencies, start to react more to data outside of the U.S., such as the eurozone and China, than it has in recent weeks, ING said.
There is "a building trend for the dollar to find less and less upward momentum after some strong [U.S. data] releases," ING said.
"That is consistent with the overbought condition of the greenback and the notion that we might be close to the peak in U.S. activity data optimism."
The safe-haven Swiss franc's strong performance this year could continue near term on escalating geopolitical uncertainty, Natixis said.
"The strength of the Swiss franc stems from the SNB's repeated interventions in the foreign-exchange market for much of the year and from the geopolitical uncertainties."
EUR/CHF could fall to 0.935, though over the medium term the franc could slip, lifting EUR/CHF towards 0.96 due to unfavorable rate differentials, Natixis said.
The Swiss franc's strength should lead to fewer SNB interventions in the near future.
Energy:
Oil gained more than 1% as tensions in the Middle East continued to worry investors.
The U.S. late on Thursday said it launched strikes on two bases in eastern Syria, which it believed were used by Iranian groups, adding to worries for investors of the conflict broadening beyond Israel and Gaza.
"The risk of the conflict spreading and causing oil supply disruption will likely continue contributing to risk premia for oil for the time being," BMI said.
"In our core view, we anticipate that oil prices will trade between $80 a barrel to $95 a barrel over the remainder of 2023 and in early 2024."
Metals:
Base metal prices are set to finish the week higher, despite mixed demand signals from Asia and a strong dollar acting as headwinds.
However, ING highlighted that some of the major copper producers in the Americas have downgraded their production targets for this year and next due to operational issues.
"Lower supply along with optimism around a revival in Chinese demand could support copper prices although broader economic concerns persist."
TODAY'S TOP HEADLINES
Sanofi Plans to Spin Off Consumer-Healthcare, Pharma Businesses
Sanofi said it plans to spin off its consumer-healthcare business, making it the latest major drugmaker to sharpen its focus on prescription medicines.
The French pharmaceutical company outlined the plan on Friday as part of a strategic update that also detailed plans to increase investment in its drug-development pipeline and cut costs.
Apple Faces Potential Watch Import Ban After Federal Trade Ruling
A U.S. federal trade agency on Thursday found that Apple violated the patent of a rival tech company, a ruling that could lead to an import ban for certain models of the company's smartwatch.
The case revolves around medical-technology company Masimo, which alleged in a 2021 complaint to the U.S. International Trade Commission that Apple violated its patents related to measuring blood-oxygen levels. Apple has included a sensor, called a pulse oximeter, in most new models of the Apple Watch since 2020.
Microsoft Replaces Longtime CMO as It Enters 'New Era of AI'
Microsoft has swapped out its long-serving chief marketing officer as it commits to branding itself as an AI company.
The software giant on Thursday said chief marketing officer Chris Capossela is leaving the company after 32 years, nearly 10 of which were spent in the top marketing job.
U.S. Launches Strikes on Suspected Iranian-Supported Bases in Syria
WASHINGTON-The U.S. said it launched strikes Thursday night on two bases in eastern Syria it believed were used by Iranian groups, the first U.S. offensive military response to a wave of drone and rocket attacks on troops based in Iraq and Syria, the Pentagon said.
The strikes against the Islamic Revolutionary Guard Corps and affiliated groups were authorized by President Biden, Defense Secretary Lloyd Austin said in a statement.
Western Allies Urge Caution as Israel Moves Closer to Ground Invasion
WASHINGTON-As Israel signals that it is closer to launching its anticipated ground offensive, U.S. and European officials are urging caution in an effort to minimize a prolonged urban war that could result in even more casualties and a turbulent future for Gaza, U.S. and foreign officials said.
Biden Administration Tries to Soften Blowback From Muslim Leaders in U.S.
WASHINGTON-The Biden administration is making public and private efforts to address concern from some Democrats, including Arab and Muslim leaders, over its staunch support for Israel's military campaign in Gaza.
President Biden met with Muslim-American leaders at the White House on Thursday, as his administration expressed more openness to backing a temporary pause in the conflict to get humanitarian aid into Gaza and renewed calls for a two-state solution.
Russian Authorities Charge U.S. Journalist With Evading Foreign Agent Law
Russian authorities charged a U.S. journalist for Radio Free Europe/Radio Liberty with neglecting to register herself as a "foreign agent," her employer said Thursday.
Russia's Investigative Committee, the country's main federal investigating authority, charged Alsu Kurmasheva with a part of the Russian criminal code that deals with registering as a foreign agent, her lawyer Edgar Matevosyan confirmed in a text message Thursday.
Write to paul.larkins@dowjones.com TODAY IN CANADA
Earnings [3Q Unless Stated Otherwise]:
Corus Entertainment 4Q
Fortis
Imperial Oil
Economic Calendar:
0830 Aug Payroll employment, earnings and hours, and job vacancies
Stocks to Watch:
Advantage Energy 3Q EPS C$0.17; Rev C$140.7M
Trisura Group 3Q Book Value Per Share Is Estimated at C$12.55 to C$12.59; Estimate Reported 3Q Net Income Will Include a C$0.26 Per Share After-Tax Loss From Non-Recurring Items; In Q423, Co Estimates a Negative After-Tax Impact to Net Income in the Range of C$0.23 to C$0.29 Per Share Driven by Costs of Protection, Other Run-Off Costs and Mitigated by Earned Premium on the Program
Expected Major Events for Friday
00:30/JPN: Sep Detailed Import & Export Statistics
06:45/FRA: Oct Consumer confidence survey
06:45/FRA: Sep Housing starts
08:00/ITA: Oct Consumer Confidence Survey
08:00/ITA: Oct Business Confidence Survey
08:59/JPN: Oct Monthly Economic Report
10:00/ITA: Aug Industrial turnover
12:30/US: Sep Personal Income and Outlays
14:00/US: Oct University of Michigan Survey of Consumers - final
All times in GMT. Powered by Kantar Media and Dow Jones.
Expected Earnings for Friday
AutoNation (AN) is expected to report $5.56 for 3Q.
Avantor Inc (AVTR) is expected to report for 3Q.
Barnes Group (B) is expected to report $0.40 for 3Q.
Bogota Financial Corp (BSBK) is expected to report for 3Q.
Booz Allen Hamilton Holding Corp (BAH) is expected to report $1.29 for 2Q.
CBRE Group (CBRE) is expected to report $0.61 for 3Q.
Chart Industries Inc (GTLS) is expected to report $1.14 for 3Q.
Charter Communications Inc (CHTR) is expected to report $8.22 for 3Q.
(MORE TO FOLLOW) Dow Jones Newswires
10-27-23 0610ET
